State of South CarolinaState Government

2025 – 003. Period of Performance Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Number: 4286-DR-SC Pass-Through Entity: Not applicable Award Period: October 11, 2016 through April 10, 2017 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires that all costs, excluding administrative costs, be incurred during the approved budget period. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Expenditures were incurred and charged to the grant after the authorized period of performance. Cause: Office controls failed to prevent costs incurred outside the applicable period of performance from being charged to the grant. Effect: Costs charged outside the period of performance may be unallowable. Questioned Costs: Questioned costs totaled $2,231 for expenditures improperly charged to the federal award in noncompliance of period of performance requirements. Context: One of thirty-four transactions selected for testing costs for which the obligation had not been paid as of the end of period of performance was incurred after the period of performance ended, totaling $2,231. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its internal controls to ensure that expenditures charged to federal grants are incurred within the applicable period of performance. Views of responsible officials and planned corrective actions: See management’s response on page 181.

2025 – 004. Reporting Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: FFATA reporting and timing errors were identified. Cause: Date entry errors and lack of retaining submitted reports led to the compliance errors identified during testing. Effect: The Office was not in compliance with FFATA reporting requirements. Questioned Costs: None, as this finding relates to reporting requirements, rather than unallowable expenditures. Context: Twelve subawards were selected for testing and the following compliance errors were identified during the testing: • For one of the subawards tested, incorrect information was reported in the FSRS regarding the subaward obligated amount. • For six of the subawards tested, the Office could not provide documentation of the original submission date in order to test the reports for timely submission. This is a repeat finding from the fiscal year 2024 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-003 Recommendation: We recommend that the Office update their current internal controls to include continuous monitoring and reviewing of project obligations and retaining all submitted FFATA reports. Views of responsible officials and planned corrective actions: See management’s response on page 182.

2025 – 005. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listings: 12.401 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.430 states that (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with recipient’s or subrecipient’s laws, rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (g) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Personnel expenditures were charged to the federal award without documented approval as required by the Office’s internal control procedure. Cause: The Office did not document all required approvals of payroll changes for grant employees. Effect: Personnel costs could be incorrectly charged to the federal award. Questioned Costs: Questioned costs are undetermined because this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: Two out of sixty employees tested were missing one or more of the required management approvals on their State Personnel Action Form applicable to the pay received in the selected period. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its efforts to consistently adhere to its procedures, including maintaining the approved State Personnel Action Form to support the personnel charges and allocations to applicable funding sources. Views of responsible officials and planned corrective actions: See management’s response on page 182.

2025 – 006. Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Matching Federal Agencies: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: W912QG-24-2-1001 Pass-Through Entity: Not applicable Award Period: October 1, 2023 through September 30, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 75.403 outlines factors affecting allowability of cost, including that costs should not be used to meet cost sharing or matching requirements of federally-financed programs. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Costs were improperly charged to the federal award. Cause: The Office’s controls failed to ensure that all costs were allowable and properly allocated. Effect: Improper allocation of costs resulted in the federal award being overcharged. Questioned Costs: Questioned costs totaled $1,969 for expenditures improperly allocated to the federal award in noncompliance of matching requirements. Context: For one out of sixty non-payroll transactions tested, the costs were not properly allocated in accordance with the federal award matching requirements. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office review and update its procedures to ensure proper allocation of costs according to matching requirements. Views of responsible officials and planned corrective actions: See management’s response on page 183.

2025 – 007. Cash Management Federal Agencies: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: NGR 5-1-11-5 (5) requires the grantee to minimize the time elapsing between the transfer of funds from the United States Treasury and their disbursement by the State. (no more than 45 days) 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Federal funds were received and held for more than 45 days before being paid out for allowable program expenditures, resulting in federal cash on hand in excess of immediate cash needs. Cause: Drawdowns were based on estimated expenditures of total contract amounts rather than actual or near-term payment activity. Effect: The Office did not comply with the awarding federal agency cash management requirements, increasing the risk of excess federal funds or interest liability. Questioned Costs: None, as this finding relates to the timing of federal cash drawdowns and the holding of funds in excess of 45 days needs, rather than unallowable expenditures. Context: One out of thirty-nine cash disbursements tested indicated that the Office retained a material amount of federal funds in excess of 45 days after the covered period identified on the cash advancement request. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its cash management controls by aligning federal drawdowns with actual or near-term disbursement activity. Views of responsible officials and planned corrective actions: See management’s response on page 183. Auditor’s Conclusion: In response to the Office’s corrective action plan, GCAPL #20-02 references back to NGR 5-1 for applicable guidance including the 45 day requirement. Additionally, our testing methodology was performed in accordance with the OMB Compliance Supplement, which requires auditors to assess whether individual cash drawdowns align with immediate cash needs. We also did not identify documentation indicating that the federal awarding agency granted a waiver from federal cash management requirements for capital projects. Therefore, based on our review, the Office did not fully comply with federal cash management requirements.

2025 – 008. Period of Performance Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires that all costs, excluding administrative costs, be incurred during the approved budget period. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Expenditures were incurred and charged to the grant both before and after the authorized period of performance. Cause: Office controls failed to prevent costs incurred outside the applicable period of performance from being charged to the grant. Effect: Costs charged outside the period of performance may be unallowable. Questioned Costs: Questioned costs totaled $33,061 for expenditures incurred outside the authorized period of performance. Context: Two of twenty transactions selected for testing costs recorded during the first period of the grant were for costs incurred prior to the applicable period of performance, totaling $30,490. One of five transactions selected for testing costs for which the obligation had not been paid as of the end of period of performance was incurred after the period of performance ended, totaling $2,571. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen its internal controls to ensure that expenditures charged to federal grants are incurred within the applicable period of performance. Views of responsible officials and planned corrective actions: See management’s response on page 184.

2025 – 009. Matching Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.306 requires that matching contributions be allowable, properly allocated, and used in accordance with the terms and conditions of the federal award. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Office did not apply required matching contributions to federal expenditures by the applicable expenditure categories as required by the federal award. Cause: Office controls failed to ensure that matching costs were tracked and applied to federal expenditures at the expenditure-category level. Effect: Matching requirements were not met in accordance with federal regulations and award terms, and federal expenditures were not consistently supported by properly applied matching contributions. Questioned Costs: Questioned costs are undetermined because matching compliance was evaluated in total by category across multiple transactions, and the specific unsupported portion could not be reasonably isolated. Context: For all three grants that closed during the fiscal year, federal expenditures were not matched to the required amounts by expenditure category; testing identified one grant where the required match total was not met, one grant where the matching total was met, but was misapplied to multiple expenditure categories, and one grant where the required match total was not met and the requirement was misapplied to multiple expenditure categories. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Office strengthen controls to ensure matching contributions are properly tracked, documented, and applied to federal expenditures as required by the federal award. Views of responsible officials and planned corrective actions: See management’s response on page 184.

2025 – 010. Special Tests and Provisions (Provider Eligibility) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR § 455.412 (b), the State Medicaid agency must confirm that the provider's license has not expired and that there are no current limitations on the provider's license. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department’s monitoring process and provider eligibility system did not ensure that the provider's license was not expired or had imposed limitations. Cause: The Department did not revoke or subsequently update the Medicaid Management Information System and licensure and certification information for providers with expired or imposed licenses when updates were made within the enrollment process, nor did the Department complete the close out process to remove providers from the list of eligible providers. Effect: We were unable to verify that the State ensured providers met the prescribed health and safety standards and providers who were no longer qualified providers remained eligible to receive payment. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: We tested sixty eligible providers to ensure that the provider’s license was unexpired or have imposed limitations. We determined the Department did not confirm that the provider's license was not expired or limited for five providers. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure that providers do not have expired or imposed limitations on their licenses and that providers who have expired and imposed limitations on licenses have their enrollment terminated. Views of responsible officials and planned corrective actions: See management’s response on page 185.

2025 – 011. Special Tests and Provisions (Provider Eligibility) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR § 455.414, The State Medicaid agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Per 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department did not confirm that the provider's enrollment was revalidated at least every five years. Cause: Through the Department’s enrollment requests and updates process the Department did not detect to ensure that providers’ enrollments are being revalidated at least every five years. Effect: Providers who no longer meet the revalidation requirements remain eligible and receive payment. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: We tested sixty eligible providers to ensure the Department confirmed that the provider’s enrollment was revalidated at least every five years. We determined the Department did not confirm that the providers enrollment was revalidated at least every five years for one provider. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure that provider enrollment is being revalidated at least every five years in accordance with 42 CFR § 455.414. Views of responsible officials and planned corrective actions: See management’s response on page 186.

2025 – 012. Special Tests and Provisions (Provider Health and Safety Standards) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Per Section 4 of the South Carolina Department of Health and Human Services State Plan (h) the State assures that each facility shall have a standard survey which includes (for a case-mix stratified sample of residents) a survey of the quality of care furnished, as measured by indicators of medical, nursing and rehabilitative care, dietary and nutritional services, activities and social participation, and sanitation, infection control, and the physical environment, written plans of care and audit of resident’s assessments, and a review of compliance with resident’s rights not later than 15 months after the date of the previous standard survey. Additionally, Section 4 (i) states that the State assures that the Statewide average interval between standard surveys of nursing facilities does not exceed 12 months. Condition: The Department was unable to provide documentation to verify that annual health and safety surveys were performed during the fiscal year. Cause: The Department did not maintain a record of completed annual health and safety surveys. Effect: We were unable to verify that the State ensured providers met the prescribed health and safety standards. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: The Department could not provide annual health and safety surveys in accordance with the State Plan. Therefore, we were unable to perform audit procedures. Prior Year Single Audit Finding Number: 2024-006 Recommendation: We recommend that the Department ensure that provider health and safety surveys are conducted in accordance with the State Plan and documentation is adequately maintained and monitored. Views of responsible officials and planned corrective actions: See management’s response on page 186.

2025 – 013. Special Tests and Provisions (Managed Care Financial Audit) Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2405-SC-5MAP and 05-2505-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR § 438.602 (e), The State must periodically, but no less frequently than once every three years, conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO, PIHP or PAHP. Per 2 CFR § 438.602 (g), The State must post on its Web site, as required in § 438.10(c)(3), the following documents and reports: (1) The MCO, PIHP, PAHP, or PCCM entity contract; (2) The data at § 438.604(a)(5); (3) The name and title of individuals included in § 438.604(a)(6); (4) The results of any audits under paragraph (e) of this section; (5) Enrollee handbooks, provider directories, and formularies required at § 438.10(g) through (i); (6) The information on rate ranges required at § 438.4(c)(2)(iv), if applicable; (7) The reports required at §§ 438.66(e) and 438.207(d); (8) The network adequacy standards required at § 438.68(b)(1) through (2) and (e); (9) The results of secret shopper surveys required at § 438.68(f); (10) State directed payment evaluation reports required in § 438.6(c)(2)(v)(C); (11) Information on all required Application Programming Interfaces including as specified in § 431.60(d) and (f); (12) Quality related information as required in §§ 438.332(c)(1), 438.340(d), 438.362(c) and 438.364(c)(2)(i); (13) Documentation of compliance with requirements in subpart K—Parity in Mental Health and Substance Use Disorder Benefits. Per 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department has not completed or maintained a record of the completed periodic audits of the five contracted Managed Care Organizations (MCOs) within the most recent three-year period nor did they post the information on their website. Cause: The Department did not ensure that the MCOs were receiving periodic audits or that the information was posted on the Department's website. Effect: We are unable to determine the accuracy, truthfulness, and completeness of the financial data submitted by each MCO. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: The Department did not complete any periodic audits in the most recent three-year period or post the required information to the Department's website. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department ensure that MCOs are fulfilling the requirement of receiving periodic audits within the most recent three-year period as well as posting the required information to their website in accordance with 2 CFR § 438.602 (e) and (g). Views of responsible officials and planned corrective actions: See management’s response on page 187.

2025 – 014. Reporting Federal Agency: Department of Health and Human Agencies Federal Program Title: Aging Cluster Assistance Listing: 93.044, 93.045, and 93.053 Federal Grant ID Number: None Pass-Through Entity: Not applicable Award Period: July 1, 2023, through June 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient or subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies were identified in the reported amounts on SF-425 reports. Cause: Department’s review of semi-annual SF-425 reports submitted during fiscal year 2025 failed to detect discrepancies in reported amounts. Effect: Without proper supervisory review, there is an increased risk of inaccurate reporting. Questioned Costs: None, as this finding relates to reporting requirements, rather than unallowable expenditures. Context: In all seven of the SF-425 reports tested, reporting discrepancies in financial data were identified related to federal share of expenditures, and recipient share of expenditures. Additionally, in all seven of the SF-425 reports tested, they lacked sufficient support of proper review and approval prior to submission. This is a repeat finding from the fiscal year 2024 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-008 Recommendation: We recommend the Department strengthen procedures to ensure an adequate review is completed prior to report submission and records are maintained of adjustments made within the period. Views of responsible officials and planned corrective actions: See management’s response on page 189.

2025 – 015. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: M5TR-2024-HS-26-24 Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient or subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Academy failed to provide documentation to prove the existence of an internal control. Cause: There was an absence of documented evidence to support the internal control process. Effect: Without adequate controls in place, unallowable expenditures may be charged to the grant. Questioned Costs: None, as this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: For one of ten transactions tested, no documentation was available to prove the existence of an internal control. This is a repeat finding from the fiscal year 2024 Single Audit. The Departments stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-015 Recommendation: We recommend that the Academy strengthen controls to ensure that documentation is maintained to support that costs charged to the grant were properly reviewed and approved for allowability. Views of responsible officials and planned corrective actions: See management’s response on page 190.

2025 – 016. Period of Performance Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient or subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Academy failed to provide documentation to prove the existence of an internal control. Cause: There was an absence of documented evidence to support the internal control process. Effect: The costs charged outside the period of performance may not be allowable. Questioned Costs: None, as this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: For one of ten expenditures tested, the CFO was unable to provide sufficient documentation of a review and approval. This is a repeat finding from the fiscal year 2024 Single Audit. The Departments stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-016 Recommendation: We recommend that the Academy strengthen controls to ensure that documentation is maintained to support that period of performance requirements are reviewed and approved. Views of responsible officials and planned corrective actions: See management’s response on page 190.

2025 – 017. Activities Allowed or Unallowed & Allowable Costs/Costs Principles Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund Assistance Listing: 66.468 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.430(g)(1)(vi) requires charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department did not accurately calculate time and effort costs associated with the grant. Cause: The Department’s internal control did not ensure that time and effort was allocated appropriately. Effect: The Department could improperly allocate additional labor cost to the grant. Questioned Costs: $678 was the amount overcharged to program after evaluation of time and effort documentation. Context: We tested eleven individuals to ensure time and effort requirements were being properly met. We determined the Department did not properly allocate time and effort for ten of the eleven individuals tested. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommended the Department strengthen its controls to ensure that time and effort is tracked and allocated accurately. Views of responsible officials and planned corrective actions: See management’s response on page 192.

2025 – 018. Cash Management Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund Assistance Listing: 66.468 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Supporting documentation was not adequate to determine if federal reimbursement requests had a separate preparer and reviewer prior to requesting a drawdown request as required by the Department's policies and procedures. Cause: The documentation that was provided was inadequate to support that the employee who completed the drawdown request was a different individual than the employee who reviewed and approved the drawdown request prior to the reimbursement request. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: We tested ten drawdowns for set-asides to ensure there were two different signatures approving the draw. We determined the Department did not appropriately approve any of the ten drawdowns. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommended the Department strengthen its controls to ensure proper documentation of supervisory review is maintained and that there is a segregation of duties between the individual completing the drawdown request and the individual approving the drawdown request. Views of responsible officials and planned corrective actions: See management’s response on page 193.

2025 – 019. Cash Management Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund Assistance Listing: 66.468 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 40 CFR § 35.3560(e) a State may draw cash through the Automated Clearing House for the full amount of costs incurred for set-aside expenditures based on Environmental Protection Agency approved workplans. A State may draw cash in advance to ensure funds are available to meet State payroll expenses. However, cash should be drawn no sooner than necessary to meet immediate payroll disbursement needs. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department overdrew federal funds. Cause: The Department's internal control did not ensure that drawdown requests were supported by adequate supporting documentation prior to the reimbursement request. Effect: The Department may request and drawdown inappropriate federal funds. Questioned Costs: None, as this finding relates to the timing of federal cash drawdowns and the holding of funds in excess of 45 days needs, rather than unallowable expenditures. Context: We tested ten drawdowns for set-asides to ensure compliance requirements were being met. We determined the Department overdrew federal funds for one of ten drawdowns for a total of $8,252. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its controls to ensure that policies and procedures are followed to ensure expenditures are incurred prior to submitting drawdown requests. Views of responsible officials and planned corrective actions: See management’s response on page 193.

2025 – 020. Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Payroll and Indirect Costs Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR §200.404 states that a cost is reasonable when the charge is consistent with the recipient’s or subrecipient’s established written personnel policies. 2 CFR § 200.430 requires that charges to federal awards for salaries and wages must be supported by accurate time and effort records that reflect the actual work performed. The records must: be supported by a system of internal controls that provides reasonable assurance payroll costs are accurate, allowable, and properly allocated; be incorporated into the recipient’s official accounting records; reasonably reflect the employee’s total compensated activity, not exceeding 100 percent of compensated time; properly allocate payroll costs when employees work on multiple cost objectives, including federal and non-federal activities; comply with the recipient’s established accounting policies and procedures. Charges should not rely solely on budget estimates unless: the estimates reasonably approximate actual work performed; significant changes in work activity are promptly identified and recorded and periodic after-the-fact reviews and adjustments are performed to ensure final charges are accurate, allowable, and properly allocated. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department did not maintain adequate time and effort documentation to support salaries and wages charged to federal awards. Specifically, payroll charges were not consistently supported by records that accurately reflected actual work performed and/or did not properly document the allocation of time between federal and non-federal activities. Indirect costs are directly correlated to the payroll expenditures thus if the payroll expenditures are inaccurate then the indirect cost will also be inaccurate. Cause: The Department lacked sufficient internal controls and/or written procedures to ensure time and effort was allocated among payroll accurately. Effect: As a result, there is an increased risk that salaries and wages charged to federal awards were inaccurate, unallowable, or improperly allocated, which could result in questioned costs and noncompliance with federal grant requirements. Questioned Costs: $17,445 for payroll testing. The overall variance between hours worked and amounts paid represents the questioned costs for payroll. Unknown for journal entry testing. Indirect costs were allocated based on budgeted personnel amounts rather than actual time and effort recorded in the Personnel Cost Account System (PCAS) and discrepancies were identified during our testing of time and effort requirements. Context: We selected thirty-six individuals to ensure time and effort requirements were properly met. Eleven out of thirty-six employees tested were paid more from the grant funds than they actually worked during the pay period. Twenty-three out of thirty-six employees tested, were paid less from the grant funds than they worked during the pay period. We selected seven indirect cost transactions to ensure time and effort requirements were being met properly. Because the journal entries related to indirect cost were made based on the budget for the grant and not the actual time and effort contributed by the individual employees per the PCAS, we were unable to provide reasonable assurance that time and effort was calculated accurately. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department develop and/or strengthen written policies and procedures for time and effort reporting; Ensure time and effort recordings accurately reflect actual work performed and total compensated activity; Implement supervisory review of time and effort documentation; and perform periodic after-the-fact reviews and adjustments to payroll charges to ensure compliance with federal requirements. Views of responsible officials and planned corrective actions: See management’s response on page 194.

2025 – 021. Cash Management Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department provided documentation that does not show a separate preparer and reviewer signature. Cause: The Department lacked sufficient internal controls to ensure that the drawdowns had separate preparers and reviewers. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None: The finding is related to insufficient documentation due to lack of approval signatures and thus we do not question any of the drawdown amounts. Context: We tested six drawdowns to ensure there were two different signatures approving the draw. We determined the Department did not appropriately approve for all six drawdowns. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend that the Department strengthen its controls to ensure that drawdowns are reviewed appropriately. Views of responsible officials and planned corrective actions: See management’s response on page 195.

2025 – 022. Period of Performance Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs must be incurred during the approved budget period. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department charged costs to a grant after the grant period ended. Cause: The Department lacked sufficient internal controls to ensure all costs to grants occurred during the grant period. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $2,771. The six transactions that occurred outside of the Period of Performance totaled this amount. Context: We tested the one journal entry transaction that occurred during the liquidation period for a grant that ended 9/30/2024. We determined that six of the transactions involved with the journal entry occurred after the grant period ended. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend that the Department strengthen its controls to ensure that costs are incurred within the grant period. Views of responsible officials and planned corrective actions: See management’s response on page 195.

2025 – 023. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agencies: Department of Health and Human Services Federal Program Titles: Adoption Assistance Assistance Listings: 93.659 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not document approved payments in the accounting system. Cause: The documentation that was provided was inadequate to support that the subsidy payments were appropriately approved in the accounting system. Effect: The Department could allocate incorrect payments to the grant. Questioned Costs: None, as this finding relates to missing approvals, rather than a specifically identifiable unallowable amount. Context: For four of sixty individual payments tested, the Department did not properly document approval. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen internal controls to ensure that batch payments are reviewed and approved prior to submission. Views of responsible officials and planned corrective actions: See management’s response on page 196.

2025 – 024. Eligibility Federal Agencies: Department of Health and Human Services Federal Program Titles: Adoption Assistance Assistance Listings: 93.659 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 42 USC § 673(A)(4)(a)(iii) requires a payment may not be made pursuant to this section to parents or relative guardians with respect to a child if the State determines that the child is no longer receiving any support from the parents or relative guardians, as the case may be. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not ensure benefits were properly terminated. Cause: The Department's controls did not ensure that the child was still the legal responsibility of the parents. Effect: The Department could continue providing benefits to ineligible individuals. Questioned Costs: $532. We determined that the Department overpaid federal expenditures associated with this area of compliance requirements. Context: We tested sixty individuals to ensure they were eligible for adoption assistance. We determined the Department did not terminate benefits timely for one of the sixty individuals. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen internal controls to ensure that individuals are removed from the program when deemed ineligible. Views of responsible officials and planned corrective actions: See management’s response on page 196.

2025 – 025. Eligibility Federal Agencies: Department of Health and Human Services Federal Program Titles: Adoption Assistance Assistance Listings: 93.659 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department approved inappropriate eligibility criteria documentation. Cause: The Department reviewed and approved inappropriate documentation that determines program eligibility. Effect: The Department could inappropriately deem individuals eligible. Questioned Costs: None. There were no federal expenditures associated with this area of compliance. Context: We tested sixty individuals against program eligibility requirements. We determined the Department approved inappropriate eligibility determination checklists for three of sixty individuals Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen its internal control procedures to ensure individuals are deemed eligible using appropriate eligibility criteria. Views of responsible officials and planned corrective actions: See management’s response on page 197.

2025 – 026. Reporting Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRSSS & 2401SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2022 through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: The Department did not report accurate financial information to the federal reporting agency. Cause: The Department did not fully implement the corrective action associated with this finding from the prior year. Effect: The Department reported inaccurate financial information to the federal reporting agency. Questioned Costs: None. We did not question any costs, the costs were only reported incorrectly. Context: In two of the six SF-425 reports (FFR) tested, the Department failed to report the accurate amount of expenditures either through not matching cash receipts and disbursements, not drawing upon the appropriate information from the general ledger, or failing to provide the general ledger detail to substantiate reported costs. In one of the five ORR-2 reports tested, the Department failed to report the accurate amount of expenses for administrative costs (Refugee Cash Assistance (RCA) and Refugee Medical Assistance (RMA) Administration). This took place because the underlying general ledger had an error that caused RCA and RMA administrative costs to have a credit balance. The Department appeared to make an adjustment to take from overall expenditures to eliminate the credit balances, resulting in a second layer of errors. In two of the six FFATA reports submitted, the report was not submitted by the designated deadline. Prior Year Single Audit Finding Numbers: 2024-019 and 2024-020 Recommendation: We recommend the Department strengthen its internal controls to ensure all reports are accurately prepared and submitted by the appropriate deadline. Views of responsible officials and planned corrective actions: See management’s response on page 197.

2025-027. Subrecipient Monitoring Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRSSS & 2401SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2022 through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR § 200.332(c) requires that all pass-through entities evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring. 2 CFR § 200.332(e) requires that all pass-through entities monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. Condition: The Department did not maintain the subrecipient monitoring and did not comply with federal subrecipient monitoring requirements. Cause: The Department has not fully implemented the corrective action associated with this finding from the prior year. Effect: The Department is not in compliance with federal subrecipient monitoring requirements. Questioned Costs: None, as the finding relates to monitoring and not unallowable expenditures. Context: The checklists were not maintained, and the Department could not provide the completed checklist to demonstrate monitoring of any subrecipients during FY 2025. For one subrecipient, the Department did not provide documentation to demonstrate that a verification was performed to confirm the subrecipient was not excluded or disqualified. Additionally, the Department failed to evaluate subrecipients for risks, create a monitoring plan that considered those risks, or sufficiently monitor and address the audit findings of the subrecipient. Prior Year Single Audit Finding Number: 2024-021 Recommendation: We recommend the Department continue its efforts to strengthen their current policies and procedures and to ensure that the subrecipient monitoring checklist is being completed and maintained. Views of responsible officials and planned corrective actions: See management’s response on page 198.

2025 – 028. Eligibility – Refugee Cash Assistance (RCA) Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRCMA & 2401SCRCMA Pass-Through Entity: Not applicable Award Period: October 1, 2021 through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Standards for Internal Control in the Federal Government (the Green Book) as issued by the Comptroller General of the United States emphasize that "The effectiveness of a detective control activity depends on timeliness" (10.10) and when detective controls are employed "management strengthens and expedites detective control activities and may also expedite monitoring activities to enable the entity to effectively mitigate the risk to acceptable levels" (10.13). Condition: The Department did not maintain controls over eligibility for this program, forms necessary for determining eligibility were not appropriately completed, forms completed were not completed in a timely fashion. Cause: The Department did not develop a control with a 100% implementation target and is utilizing un-auditable stop-gap measures such as live documents to facilitate processing of program participant applications. Effect: The Department’s system can fail to catch errors in each applicant’s application or payments and has resulted in overcharging grants. Questioned Costs: $15,126. Payments to program participants with control findings. Context: The following discrepancies were encountered during our testing of forty-nine case files. • The Department did not have a preventive control to ensure all RCA eligibility criteria were reviewed, as the existing Quality Assurance Checklist was not designated to check all cases or be timely. • In the files of thirty-eight, the Authorization of Refugee Cash Assistance Payment (Form 1325) was not signed until after it had been approved and payments had already been issued, and for six cases, the form was either not dated or had no sign-offs at all. • We noted that applicant reviews and aid amount authorizations for the Refugee Employment Services Registration/Participation Status form and the Notification of Eligibility Determination for Refugee Resettlement Program form (Forms 1324 and 1326, respectively) were completed after applicants had already begun receiving aid, resulting in grant overcharges. • In forty-one cases, the employment service provider did not return Part II of the Form 1324, which, according to the form instructions, must be submitted prior to approval of RCA benefits. • In one case, Form 1326 did not specify the date on which participant payments would end, which is needed to evaluate compliance with the eligibility period. Prior Year Single Audit Finding Number: 2024-018 Recommendation: We recommend the Department continue its efforts to strengthen their current policies and procedures and to ensure that all RCA applicants are reviewed with the quality assurance audit checklist and that all appropriate forms are signed, dated, and reviewed in a timely manner. Views of responsible officials and planned corrective actions: See management’s response on page 198.

2025 – 029. Eligibility – Refugee Medical Assistance (RMA) Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRCMA & 2401SCRCMA Pass-Through Entity: Not applicable Award Period: October 1, 2021 through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 45 CFR § 400.100 requires that recipients of RMA payments are not full-time students in institutions of higher education, as defined by the Director, except where such enrollment is approved by the State, or its designee, as part of an individual employability plan for a refugee under § 400.79 of this part or a plan for an unaccompanied minor in accordance with § 400.112. 45 CFR § 400.100 also requires that the RMA eligibility only applies during a period of time to be determined by the Director in accordance with § 400.112. Condition: The South Carolina Department of Health and Human Services (SCDHHS), a partnering state agency contracted by the Department to perform eligibility determinations, did not remove higher education students from the RMA system or terminate benefits after the one-year eligibility period expired. Cause: SCDHHS did not collect the information noted and the Department lacked sufficient oversight of SCDHHS’s eligibility determinations and removal of ineligible participants. Effect: Overcharging federal grants can occur through either payments past their eligible period or payments to individuals who never were eligible. Questioned Costs: $1,923 based upon the total amount of ineligible payments identified in testing. It is known that these participants received additional amounts inappropriately in other months and periods but the scope of these could not be determined. Context: Out of the eleven cases selected for testing, we noted the following: • One individual was a child eligible for another federal funded cash assistance program but was assigned to RMA. • There is no current process to identify and disallow applicants enrolled in higher education. • Four program participants were given assistance beyond the twelve-month eligibility period. Prior Year Single Audit Finding Number: 2024-018 Recommendation: We recommend the Department ensure that partnering Departments are checking for the appropriate information to exclude ineligible program participants and to take participants off the program when their eligible period has ended. Views of responsible officials and planned corrective actions: See management’s response on page 199.

2025 – 030. Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agencies: Department of Health and Human Services Federal Program Titles: Refugee and Entrant Assistance-State/Replacement Designee Administered Programs Assistance Listings: 93.566 Federal Grant ID Numbers: 2201SCRCMA, 2401SCRCMA, 2201SCRSSS & 2401SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2021 through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Expenditures charged to the program were not adequately supported or were inappropriate. Cause: The Department did not maintain appropriate review and approval controls over program participant payments to RCA and RMA participants nor over invoice payments to subrecipients. Effect: The federal grants were overcharged through payments for unallowable costs or reimbursing ineligible program participants. Questioned Costs: $876,636. Payments for insufficiently reviewed invoices or to ineligible program participants Context: We identified several payments made to subrecipients that the Department did not review nor did the Department retain documentation at the appropriate level of detail to support the allowability of the costs. We noted that the Department did not have the details on RMA program participants (determined and paid via the South Carolina Department of Health and Human Services) sufficient to verify that the payments were allowable. Multiple ineligible payments were made (see finding 2025-029). Prior Year Single Audit Finding Number: 2024-017 Recommendation: We recommend that the Department ensure appropriate controls over subrecipient payments and payments to program participants. Views of responsible officials and planned corrective actions: See management’s response on page 200.

2025 – 031. Period of Performance Federal Agency: Department of Health and Human Services Federal Program Title: CCDF Cluster Assistance Listing: 93.575, 93.596, and 93.489 Federal Grant ID Number: 2201SCCCDD Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 98.60(d)(1) requires that discretionary funds (Assistance Listing 93.575) be obligated in the fiscal year in which funds are awarded or in the succeeding fiscal year. Unliquidated obligations as of the end of the succeeding fiscal year shall be liquidated within one year. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. Condition: Expenditures were incurred after the end of the grant’s period of performance. Cause: The Department’s internal controls failed to identify and prevent charging costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $11 is based on the sum of the three transactions that incurred program expenditures that were outside of the period of performance Context: Three of sixty expenditure transactions tested had incurred program expenditures at the end of the obligation period that were not obligated and expended in accordance with program requirements. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department review and update internal controls to ensure all expenditures charged to federal awards are incurred within the grant's period of performance. Views of responsible officials and planned corrective actions: See management’s response on page 200.

2025 – 032. Reporting Federal Agencies: Department of Health and Human Services Federal Program Titles: CCDF Cluster Assistance Listings: 93.575 Federal Grant ID Numbers: 2302SCCCDD & 2402SCCCDD Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. 2 CFR § 200.303(a) requires that the recipient and subrecipient must establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not report accurate financial information to the federal reporting agency. Cause: The Department's internal control failed to ensure retention of documentation. Effect: The Department could fail to appropriately report the FFATA. Questioned Costs: None. There were no federal expenditures associated with this area of compliance. Context: In our testing of the four subrecipients, it was determined that the department could not provide the FFATA submission documentation for one of them. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend that the Department strengthen its internal controls to ensure that FFATA reports are submitted and documented appropriately. Views of responsible officials and planned corrective actions: See management’s response on page 201.

2025 – 033. Reporting and Earmarking Federal Agencies: Department of Health and Human Services Federal Program Titles: CCDF Cluster Assistance Listings: 93.575 and 93.596 Federal Grant ID Numbers: 2201SCCCDD and 2201SCCCDF Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. 45 CFR § 98.50(f) requires that the Lead Agency shall: (1) Reserve the minimum amount required under paragraph (b) of section 45 CFR § 98.50 for quality activities, and the funds for administrative costs described at paragraph (d) of section 45 CFR § 98.50; and (2) From the remainder, use not less than 70 percent to fund direct services (provided by the Lead Agency). Condition: The Department did not ensure four key line-items were accurately reported on the financial report. Cause: The Department's internal controls failed to prevent inaccurate reporting of expenditures. Effect: The accuracy of the financial report could not be validated. Questioned Costs: None. We did not question any costs, the costs were only reported incorrectly. Context: In our testing of four key line-items, it was determined that the department miscategorized transactions when grouping the line-item totals on the report. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department strengthen its internal controls to ensure all reports are accurately prepared and submitted. Views of responsible officials and planned corrective actions: See management’s response on page 201.

2025 – 034. Eligibility Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Number: 5SC300329 Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 7 CFR 226.6(b)(3), any new or renewing institution applying for participation in the Program must be notified in writing of approval or disapproval by the State agency, within thirty calendar days of the State agency's receipt of a complete application. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department was unable to provide documentation to verify seven institutions were notified of approval or disapproval within thirty calendar days of the State agency's receipt of a completed application. Cause: Internal controls failed to ensure that subrecipients were notified of approval/disapproval. Effect: Without adequate controls in place, the Department will not be in compliance with eligibility requirements. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: The Department could not provide supporting documentation that seven out of sixty subrecipients tested received notification of approval/disapproval within thirty calendar days of completion of application. Prior Year Single Audit Finding Number: Not Applicable Recommendation: We recommend the Department strengthen controls to ensure that documentation exists that subrecipients were notified of approval/disapproval. Views of responsible officials and planned corrective actions: See management’s response on page 201.

2025 – 035. Reporting Federal Agency: Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Assistance Listing: 93.558 Federal Grant ID Numbers: 2201SCTANF and 2501SCTANF Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 265.7(a) requires that each state's quarterly reports, including the TANF Data Report, be complete and accurate. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Discrepancies existed between the ACF-199 (TANF Data Report) and the Department’s records. The agency did not comply with their approved corrective action plan for formal documentation of report review. Cause: The incorrect source data was utilized when completing the referenced data element on the performance report. Effect: Some of the data fields reported on the ACF-199 report are inconsistent with the supporting case records. Questioned Costs: None. There were no federal expenditures associated when testing this area of compliance. Context: Key data elements for ten families were tested from one quarterly ACF-199 report. A discrepancy was noted for one data element related to recording the number of months countable towards the federal time limit for assistance. This is a repeat finding from the fiscal year 2024 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Correction Action Implemented”. Due to this issue repeating for fiscal year 2025, this issue has not been fully corrected. Prior Year Single Audit Finding Number: 2024-024 Recommendation: We recommend that the Department strengthen its processes to ensure that federal reports are free from error prior to submission. We also recommend that the Department update and review processes to ensure proper documentation of supervisory review is maintained. Views of responsible officials and planned corrective actions: See management’s response on page 202.

2025 – 036. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listing: 14.228 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.405(a) states that a cost is allocable to a Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Costs charged to the program were not adequately allocated. Cause: The Office failed to ensure costs were properly allocated based upon the approved cost allocation plan for FY25. Effect: The potential for overcharging the grant exists when costs charged to the federal award are not properly allocated. Questioned Costs: $12,949. The Disaster Relief and Mitigation grants were overcharged by $4,316 and $8,633, respectively. Context: One of twenty-two expenditures tested had costs improperly charged to the federal award. The transaction involved allowable charges that benefited multiple grant programs and activities but were not properly allocated to match the Office’s cost allocation plan for FY25. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Office review and update its procedures to ensure all costs charged to the grant are properly allocated to applicable grants and funding sources based upon their yearly cost allocation plan. Views of responsible officials and planned corrective actions: See management’s response on page 203.

2025 – 037. Reporting Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listing: 14.228 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Department did not submit FFATA reports on time for FY25. Cause: The Department lacked sufficient internal controls and/or written procedures to ensure FFATA reports were submitted on time. Effect: The Department was not in compliance with FFATA reporting requirements. Questioned Costs: None, as it relates to timely reporting, rather than unallowable expenditures Context: Eight of the forty FFATA reports tested were submitted after the reporting deadline. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department implement procedures to ensure reports are submitted in compliance with FFATA reporting requirements. Views of responsible officials and planned corrective actions: See management’s response on page 204.

2025 – 038. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Federal Grant ID Number: None Provided Pass-Through Entity: Not applicable Award Period: March 3, 2021, through December 31, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.403 (a) costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. 2 CFR § 200.302 (b)(3) states each recipient’s and subrecipient’s financial management system must provide maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: Amounts charged to the program did not agree to the supporting invoices. Cause: The Department’s review process and internal controls did not detect discrepancies between the invoiced amounts and the amounts recorded and charged to the grant. Effect: Program expenditures were not accurately recorded in the Department’s financial records. Questioned Costs: None, as this finding relates to an underpayment. Context: One out of four transactions tested, the amount charged to the Federal program did not agree to the amount reflected on the supporting invoice. The Department recorded and reimbursed an amount that was less than the invoiced amount, resulting in an underpayment totaling $313. This is a repeat finding from the fiscal year 2024 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2024-026 Recommendation: We recommend that the Department strengthen controls to ensure the review process includes verification that amounts charged to the grant agree to the supporting invoices prior to reimbursement. Views of responsible officials and planned corrective actions: See management’s response on page 206.

2025 – 039. Reporting and Matching Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Number: B04MC47445 Pass-Through Entity: Not Applicable Award Period: October 1, 2022, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between the Federal Financial Report (FFR) and the accounting system. In addition, although the Department met their matching requirement, the Department’s calculation did not align with expenditures from the accounting system. Cause: For the recipient share of expenditures reported on the FFR, the Department reported the matching amount included on the grant award document instead of the calculated match prepared by the Budget Analyst. For indirect costs, the base expenditures were not reported with the correct applicable rate for each applicable period. Finally, the internal database the Department used to make the matching calculation contained incomplete expenditure data causing an incorrect calculation. The Department’s internal controls failed to detect that the expenditures in the internal database did not reconcile with the actual expenditures from the accounting system. Effect: The Department’s control procedures did not detect the calculation errors identified in our testing. Questioned Costs: None, as the finding relates to reporting requirements, and the Department met their matching requirement. Context: We tested the sole FFR report submitted during fiscal year 2025 and identified reporting discrepancies in financial data related to the recipient share of expenditures and indirect expenditures. In addition, we noted that the Department’s calculation of the state match differed from the recipient share of expenditures reported on the FFR and was based on inaccurate data. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its internal controls and processes to ensure that federal reports are free from error prior to submission and that matching calculations are based on accurate accounting records. Views of responsible officials and planned corrective actions: See management’s response on page 207.

2025 – 040. Earmarking and Level of Effort Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 42 USC 704(d) requires that a state may not use more than ten percent of allotted funds for administrative expenses. 42 USC 705(a)(4) requires that the state must maintain the level of funds provided solely by the state for maternal and child health programs at a level at least equal to the level provided in fiscal year 1989. 2 CFR § 200.303(a) requires that the recipient and subrecipient establish and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department was not in compliance with the ten percent administrative expenses requirement. In addition, although the Department exceeded the level of effort requirement threshold, the calculated amount was less than what was actually expended. Cause: The internal database the Department used to calculate the earmarking and level of effort requirements contained incomplete expenditure data causing incorrect calculations. The Department’s internal controls failed to detect that the expenditures in the internal database did not reconcile with the actual expenditures from the accounting system. Effect: The Department’s control procedures did not detect the calculation errors identified in our testing, which leads to an increased risk of not meeting earmarking or level of effort requirements. Questioned Costs: Questioned costs totaled $142,775 as this was the amount expended over the allotted ten percent earmarking threshold for administrative expenses. There were no questioned costs related to the level of effort requirement. Context: The Department reviews the earmarking and level of effort calculations and reports these amounts as part of the annual Maternal and Child Health Services Block Grant Application/Annual Report. We selected for testing the most recently submitted 2025 report which contain expenditure details related to fiscal year 2024 and noted discrepancies between Department support and the accounting system. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its controls to ensure that earmarking and level of effort calculations are based on accurate data from the accounting system. Views of responsible officials and planned corrective actions: See management’s response on page 208.

2025 – 041. Period of Performance Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Numbers: B04MC47445 and B04MC54575 Pass-Through Entity: Not Applicable Award Period: October 1, 2022, through September 30, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs to be incurred during the approved budget period. Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Expenditures were incurred and charged outside of the period of performance. Cause: The Department’s internal controls failed to identify and prevent charging costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $1,338. The amount is based on the sum of the five transactions that had incurred program expenditures outside of the applicable period of performance date. Context: For a total of sixty expenditure transactions tested, one transaction had costs that were incurred before the start of the period of performance date and four transactions had incurred program expenditures that were not obligated and expended in accordance with program requirements. Recommendation: We recommend the Department review and update its internal controls to ensure that all expenditures charged to federal awards are incurred within the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of responsible officials and planned corrective actions: See management’s response on page 209.

2025 – 042. Reporting Federal Agency: Department of Health and Human Services Federal Program Title: Maternal and Child Health Services Block Grant to the States Assistance Listing: 93.994 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between the Maternal and Child Health Services Block Grant Application/Annual Report and the accounting system. Cause: The internal database the Department used to compile the report contained incomplete expenditure data causing incorrect calculations. The Department’s internal controls failed to detect that the expenditures in the internal database did not reconcile with the actual expenditures from the accounting system. Effect: Although the Department still met matching and earmarking requirements, several reported amounts of 2023 expenditures were not accurately stated within the report. Questioned Costs: None, as this finding relates to reporting requirements, rather than unallowable expenditures. Context: For the sole Maternal and Child Health Services Block Grant Application/Annual Report submitted during fiscal year 2025, the Department reported inaccurate expended fiscal year 2023 data on Form 2 including amounts related to state matching and earmarking requirements. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure accurate filing of the Maternal and Child Health Services Block Grant Application/Annual Report. Views of responsible officials and planned corrective actions: See management’s response on page 209.

2025 – 043. Cash Management Federal Agency: Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements and Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health Assistance Listing: 93.268 and 93.967 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR § 205.11(a) requires a State and a Federal Program Agency must minimize the time elapsing between the transfer of funds from the United States Treasury and the State's payout of funds for Federal assistance program purposes, whether the transfer occurs before or after the payout of funds. Condition: Supporting documentation was not adequate to determine if federal reimbursements were properly reviewed and approved by a programmatic supervisor prior to requesting a drawdown as required by the Department’s policies and procedures. In addition, some draws were made in excess of allowable incurred expenditures. Cause: The Department failed to retain documentation demonstrating performance of a programmatic supervisory review and approval. In addition, Department controls failed to detect potential overcharging of the grant. Effect: The Department may drawdown funds in excess of eligible reimbursable expenditures. Questioned Costs: Total questioned costs could not be determined due to the Department’s methodology of calculating grant draws. Context: The following discrepancies were encountered during testing of cash management: • Five of seven Immunization Cooperative Agreements drawdowns and six of eight Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health drawdowns selected for testing lacked sufficient documentation to confirm whether the federal reimbursement requests had a separate and appropriate preparer and reviewer prior to requesting a drawdown. • In addition, each respective program had one tested drawdown where the requested grant reimbursement amount was greater than the eligible costs recorded in the accounting system. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its controls to ensure that drawdowns are reviewed appropriately and that drawdowns are reconciled to grant expenditures prior to the submission of the reimbursement request to prevent overdrawing the grant. Views of responsible officials and planned corrective actions: See management’s response on page 210.

2025 – 044. Special Tests and Provisions Federal Agency: Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements Assistance Listing: 93.268 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance Criteria: The Office of Management and Budget’s (OMB) 2025 Compliance Supplement states that effective control and accountability must be maintained for all vaccines under the Vaccines for Children (VFC) program. Vaccines must be adequately safeguarded and used solely for authorized purposes in accordance with guidance set forth in 42 USC 1396s. To comply with this requirement, the Department’s Vaccines for Children Operation Guide requires that all completed VFC compliance site visits be reviewed by the VFC coordinator, immunization program manager, or a designee. 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department did not perform a review and approval of a VFC compliance site visit in accordance with its policies. Cause: Due to staffing turnover, there were delays in reviewing compliance visits. Effect: In the absence of a compliance visit review, providers could have unresolved issues that could affect the quality and quantity of vaccines provided to VFC recipients. Questioned Costs: None, as this finding relates to an untimely approval of a compliance site visit, rather than unallowable expenditures. Context: For sixty providers selected for testing, one compliance site visit did not have approval completed by the VFC Coordinator, Immunization Program Manager, or a designee. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department ensure compliance visits are reviewed in accordance with Department policy. Views of responsible officials and planned corrective actions: See management’s response on page 211. Auditor’s Conclusion: The compliance site visit where we noted the untimely review was performed on June 6, 2025. Although the Department had been tracking and monitoring the site visit, it was not reviewed or approved by the VFC-Coordinator or their designee as of our audit fieldwork in early February of 2026. Based on our audit inquiries, the documentation relating to the provider’s compliance site visit was updated, which enabled the site visit to be approved a few days later. We understand there were difficulties with staffing turnover, but in instances of prolonged vacancies, there should be policies to help reduce the timing between when site visits are conducted and when they can be reviewed.

2025 – 045. Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Department of Health and Human Services Federal Program Title: Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health Assistance Listing: 93.967 Federal Grant ID Number: NE11OE000041 Pass-Through Entity: Not Applicable Award Period: December 1, 2023, through November 30, 2025 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: The Department did not maintain appropriate documentation supporting the review and approval over one journal entry. Cause: The Department failed to retain documentation demonstrating performance of a supervisory review and approval. Effect: Without a proper supervisory review, there is an increased risk that the Department could allocate unallowable costs to the grant. Questioned Costs: None, as the issue is only related to the review of the entry and not unallowable expenditures. Context: For one of seventy transactions selected for testing, supporting documentation was not adequate to demonstrate that a proper review and approval by a programmatic supervisor occurred on the journal entry form. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen controls to ensure that documentation is maintained to support that costs charged to the grant were properly reviewed and approved for allowability. Views of responsible officials and planned corrective actions: See management’s response on page 212.

2025 – 046. Suspension and Debarment Federal Agency: Department of Health and Human Services Federal Program Titles: Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health and Epidemiology and Laboratory Capacity for Infectious Disease (ELC) Assistance Listings: 93.967 and 93.323 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various. Type of Finding: Significant deficiency in internal control over compliance, other matters. Criteria: 2 CFR § 180.300 requires that when a non-federal entity enters into a covered transaction (contracts for goods and services that are expected to equal or exceed $25,000, as well as all subawards to subrecipients, irrespective of award amount) with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. The regulation lists several permitted methods for verification, including checking the System for Award Management (SAM.gov) Exclusions maintained by the United States General Services Administration. Criteria: 2 CFR § 200.303(a) requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms of conditions of the federal award. Condition: Compliance with suspension and debarment regulations could not be confirmed for one vendor contract. Cause: The Department was unable to locate the documentation demonstrating that they checked the SAM.gov Exclusions for that vendor. Effect: The Department’s compliance with federal suspension and debarment requirements was not supported by adequate documentation. Questioned Costs: None, as the finding is related to insufficient verification documentation rather than unallowable expenditures. Context: The Department verifies suspension and debarment through checking SAM.gov Exclusions. For one out of six vendors tested, the Department was unable to provide support that they checked the SAM.gov Exclusions. Suspension and debarment is performed on an agencywide basis for all grant programs. In the fiscal year 2024 Single Audit, there was a similar finding for the Epidemiology and Laboratory Capacity for Infectious Disease (Assistance Listing Number 93.323) program. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected” with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2025, the issue has not been fully corrected. Prior Year Single Audit Finding Number: 2024-032 for Epidemiology and Laboratory Capacity for Infectious Disease (ELC) (Assistance Listing Number 93.323). Recommendation: We recommend the Department consistently adhere to its procedures including maintaining the SAM.gov Exclusions check for all applicable vendors. Views of responsible officials and planned corrective actions: See management’s response on page 212.

2025 – 047. Equipment and Real Property Management Federal Agency: Department of Health and Human Services Federal Program Title: Public Health Emergency Preparedness and Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listing: 93.069 and 93.354 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR § 200.313(d)(1) requires property records include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal Award Identification Number (FAIN)), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use, and condition of the property, and any disposition data including the date of disposal and sale price of the property. Condition: The Department was not in compliance with several equipment and real property requirements. Cause: The Department’s processes did not ensure that assets transferred during the transition from the Department of Health and Environmental Control (DHEC) to the Department of Public Health (DPH) were properly associated with the applicable federal funding source or grant information within the asset management system. Effect: Incomplete property records increase the risk that equipment purchased with federal funds may not be properly tracked, monitored, or reported in accordance with federal regulations. Questioned Costs: None, as this finding relates to equipment record keeping, rather than unallowable expenditures. Context: During follow-up procedures related to equipment and real property management, the Department provided an asset history listing for review. However, the listing did not clearly identify assets purchased with federal funds. Additionally, assets transferred from DHEC to DPH in the South Carolina Enterprise Information System (SCEIS) were not associated with a federal funding source or specific grant. As a result, the Department was unable to demonstrate that equipment purchased with federal funds was being tracked in accordance with federal requirements. In addition, since assets were not listed under federal grants, we were unable to obtain a population to test whether assets bought with federal grants were accounted for in the Department’s annual physical inventory. This is a repeat finding from the fiscal year 2023 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2023, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-026 Recommendation: We recommend the Department strengthen procedures to ensure equipment purchased with federal funds is properly tracked and associated with the applicable federal funding source within the asset management system and property records should include all elements required by federal regulations. Views of responsible officials and planned corrective actions: See management’s response on page 213.

Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: FFATA reporting and timing errors were identified. Cause: Administrative turnover increased workloads which led to delays in submission and retention of the FFATA reports. Effect: The Office was not in compliance with FFATA reporting requirements. Questioned Costs: None Context: Seven subawards were selected for testing and the following compliance errors were identified during the testing: • For six of the subawards tested, the action was not reported in the FSRS by the last day of the month following the month that the subaward was made. • For two of the subawards tested, incorrect information was reported in the FSRS regarding the obligation date for the subaward. The incorrect information was not properly reviewed and approved by the Office staff prior to submission. This is a repeat finding from the fiscal year 2023 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected” with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-006 Recommendation: We recommend the Office continue its efforts to strengthen internal controls to ensure continuous monitoring and reviewing of project obligations resulting in reports that are submitted in compliance with FFATA reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 130.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI085832, B08TI083544, B08TI083966 Pass-Through Entity: Not applicable Award Period: March 15, 2021, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the 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 of conditions of the federal award. Condition: Supporting documentation was not adequate to determine if federal reimbursements had a separate preparer and reviewer prior to requesting a drawdown as required by the Department’s policies and procedures. Cause: Documentation that was provided was inadequate to support that the employee who completes the drawdown request was a different individual than the employee who reviewed and approved the drawdown prior to the reimbursement request. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None Context: For all five drawdown requests tested, supporting documentation was not adequate to demonstrate who prepared and reviewed the drawdown request. Therefore, it could not be confirmed whether the federal reimbursements had a separate preparer and reviewer prior to requesting a drawdown. This is a repeat finding from the fiscal year 2023 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-011 Recommendation: We recommend that the Department strengthen its policies and procedures to ensure proper documentation of supervisory review is maintained and that there is a segregation of duties between the individual completing the drawdown request and the individual approving the drawdown request. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 132.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI083544 Pass-Through Entity: Not applicable Award Period: March 15, 2021, through March 14, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. Condition: Expenditures were incurred and charged after the period of performance had ended. Cause: Department controls failed to prevent charging the grant for costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $1,540 Context: One of the five transactions selected for testing costs for which the obligation had not been paid as of the end of period of performance had cost incurred after the ending period of performance. This is a repeat finding from the fiscal year 2023 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-013 Recommendation: We recommend that the Department continues to review and update its internal controls to ensure that expenditures charged to their federal grants are incurred within the grant’s period of performance. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 133.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2305-SC-5MAP and 05-2405-SC-5MAP Pass-Through Entity: Not Applicable Award Period: October 1, 2022, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR § 200.303 (a), non-Federal entities 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. Per Section 4 of the South Carolina Department of Health and Human Services State Plan (h) the State assures that each facility shall have a standard survey which includes (for a case-mix stratified sample of residents) a survey of the quality of care furnished, as measured by indicators of medical, nursing and rehabilitative care, dietary and nutritional services, activities and social participation, and sanitation, infection control, and the physical environment, written plans of care and audit of resident’s assessments, and a review of compliance with resident’s rights not later than 15 months after the date of the previous standard survey. Additionally, Section 4 (i) states that the State assures that the Statewide average interval between standard surveys of nursing facilities does not exceed 12 months. Condition: The Department of Health and Human Services (Department) was unable to provide documentation to verify that annual health and safety surveys were performed during the fiscal year. Cause: The Department did not maintain a record of completed annual health and safety surveys. Effect: We were unable to verify that the State ensured providers met the prescribed health and safety standards. Questioned Costs: None Context: The Department could not provide annual health and safety surveys in accordance with the State Plan. Therefore, we were unable to perform audit procedures. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend that the Department ensure that provider health and safety surveys are conducted in accordance with the State Plan and documentation is adequately maintained. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 134.

Federal Agency: Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listings: 10.553, 10.555, 10.559, and 10.582 Federal Grant ID Number: None Pass-Through Entity: Not applicable Award Period: October 01, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: Documentation was not adequate to support compliance with oversight and monitoring responsibilities. Cause: The Department’s internal controls failed to ensure compliance with paid lunch equity requirements. Effect: Without a thorough annual review, subrecipients could receive incorrect funding. Questioned Costs: None Context: During a Department administrative review, one School Food Authority (SFA) had a negative balance as of June 30, 2022, and failed to provide sufficient documentation to support it. Department program personnel ended the paid lunch equity review without ensuring the SFA assessed the need to raise paid lunch prices for the current school year. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend the Department strengthen procedures to ensure proper documentation is maintained for the paid lunch equity requirement. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 135.

Federal Agency: Department of Health and Human Services Federal Program Title: Aging Cluster Assistance Listing: 93.044, 93.045, and 93.053 Federal Grant ID Number: None Pass-Through Entity: Not Applicable Award Period: July 1, 2023, through June 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: Discrepancies were identified in the reported amounts on SF-425 reports. Cause: The Department’s review of semi-annual SF-425 reports submitted during fiscal year 2024 failed to detect discrepancies in reported amounts. Effect: Without proper supervisory review, there is an increased risk of inaccurate reporting. Questioned Costs: None Context: In four of eight SF-425 reports tested, reporting discrepancies in financial data were identified related to federal share of expenditures, and recipient share of expenditures. Prior Year Single Audit Finding Numbers: Not applicable. Recommendation: We recommend the Department strengthen procedures to ensure an adequate review is completed prior to report submission and records are maintained of adjustments made within the period. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 136.

Federal Agency: Department of Health and Human Services Federal Program Title: Aging Cluster Assistance Listing: 93.044, 93.045, and 93.053 Federal Grant ID Number: None Pass-Through Entity: Not Applicable Award Period: July 1, 2023, through June 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: We identified noncompliance with FFATA reporting requirements. Cause: The Department’s internal controls failed to detect the lack of timely and accurate reporting, as well as the non-compliance with federal FFATA filing requirements. Effect: The Department failed to meet federal FFATA filing requirements. Questioned Costs: None Context: The Department did not submit any FFATA reports during FY24, although it had subawards of $30,000 or more. Prior Year Single Audit Finding Numbers: Not applicable. Recommendation: We recommend the Department strengthen procedures to ensure timely and accurate filing of FFATA reports. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 137.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Community Mental Health Services Assistance Listing: 93.958 Federal Grant ID Number: B09SM089607 Pass-Through Entity: Not Applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. Condition: Expenditures were incurred outside of the period of performance. Cause: Department controls failed to prevent charging the grant for costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $26,975 Context: Two of the three transactions selected for testing from costs recorded during the beginning period of the grant were for costs incurred prior to the applicable period of performance. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department review and update internal controls to ensure all expenditures charged to a federal award are incurred within the grant’s period of performance. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 138.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Community Mental Health Services Assistance Listing: 93.958 Federal Grant ID Number: B09SM085991 Pass-Through Entity: Not Applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. 42 USC 300x-9(c) requires that a state shall expend not less than ten percent of grant funds for carrying out evidence-based programs that address the needs of individuals with early serious mental illness, including psychotic disorders, regardless of the age of the individual at onset. 42 USC 300x-9(d) requires that a state shall expend at least five percent of grant funds to support evidence-based programs that address the crisis care needs of individuals with serious mental illnesses (SMI) and children with serious emotional disturbances (SED), which may include individuals experiencing mental health crises demonstrating serious mental illness or serious emotional disturbance, as applicable. Condition: The Department did not comply with federal earmarking minimum spending requirements. Cause: Department controls failed to ensure that the earmarking requirements were met prior to the grant closing. Effect: The Department was not in compliance with the federal earmarking requirements. Questioned Costs: Not applicable Context: The Department did not meet the ten percent evidence-based expenditure threshold and five percent crisis care expenditure threshold mandated by earmarking requirements. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department review its policies and procedures and update internal controls to ensure earmarking requirements are met. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 139.

Federal Agency: Department of Health and Human Services Federal Program Title: Low-Income Home Energy Assistance Program Assistance Listing: 93.568 Federal Grant ID Number: 2402SCLIEA Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the 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. Condition: FFATA report did not have documentation supporting a review by an employee other than the preparer prior to submission. Cause: The Department has a policy requiring a report reviewer; however, the policy did not require documentation of actual approval. Effect: Without a supervisory review, there is an increased risk of inaccurate reporting. Questioned Costs: None Context: For the FFATA report tested, no documentation supporting a supervisory review and approval was provided. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department strengthen policies and procedure to require documentation of a report reviewer other than the preparer, prior to submission. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 140.

Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. Condition: The Department failed to provide documentation to prove the existence of an internal control. Cause: Financial monitoring is completed virtually on an annual basis by the grants accountant and reviewed by the grants accounting manager; however, there is an absence of documented evidence to support the review process. Effect: Without adequate controls in place, the Department may not monitor the subrecipients in accordance with requirements. Questioned Costs: None Context: For three of the eight items tested, the Annual Financial Monitoring Form does not have the grants accounting manager’s approval signature. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend that the Department strengthen controls to ensure that documentation is maintained to support that the Financial Monitoring Form is reviewed and approved by the grants accounting manager. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 141.

Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2026 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. Condition: The Department failed to provide documentation to prove the existence of an internal control. Cause: Management verbally approved the report once the review was complete. Effect: Without adequate controls in place the Department could inaccurately submit a report. Questioned Costs: None Context: For both of the reports tested, management did not properly document a review of the FFATA. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend the Department update their internal controls to include continuous monitoring and reviewing of project obligations to ensure that reports are submitted in compliance with FFATA reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 141.

Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: M5TR-2024-HS-26-24 Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. Condition: The Department failed to provide documentation to prove the existence of an internal control. Cause: The Chief Financial Officer verbally approved the transaction; however, there was an absence of documented evidence to support the internal control process. Effect: Without adequate controls in place, unallowable expenditures may be charged to the grant. Questioned Costs: None Context: For the one transaction tested, no documentation was available to prove the existence of an internal control. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend that the Academy strengthen controls to ensure that documentation is maintained to support that costs charged to the grant were properly reviewed and approved for allowability. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 143.

Federal Agency: Department of Transportation Federal Program Title: Highway Safety Cluster Assistance Listing: 20.600 and 20.616 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2023, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. Condition: The Academy failed to provide documentation to prove the existence of an internal control. Cause: The Chief Financial Officer verbally approved the transaction; however, there was an absence of documented evidence to support the internal control process Effect: The costs charged outside the period of performance may not be allowable. Questioned Costs: None Context: For three of eighteen expenditures tested, the CFO was unable to provide sufficient documentation of a review and approval. Prior Year Single Audit Report Finding Number: Not applicable. Recommendation: We recommend that the Academy strengthen controls to ensure that documentation is maintained to support that period of performance requirements are reviewed and approved. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 143.

Federal Agency: Department of Health and Human Services Federal Program Title: Refugee and Entrant Assistance Assistance Listing: 93.566 Federal Grant ID Numbers: 2201SCRSSS and 2301SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2025 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 45 CFR § 75.303(a) requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 45 CFR § 75.403 outlines factors affecting allowability of costs, including adequate documentation. Condition: Expenditures charged to the program were not adequately supported. Cause: The Department lacks sufficient controls to ensure that expenditures are allowable and properly supported with documentation. Effect: The potential for overcharging the grant exists when transactions charged to federal awards are not adequately supported. Questioned Costs: $1,580,113 Context: For four transactions tested, the Department was unable to provide documentation with sufficient details to support the specific services rendered. Prior year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Department review and update its procedures to ensure all costs charged to the grant are allowable and properly allocated to the grant. Views of Responsible Officials and Corrective Actions Plan: Management agrees with the finding. See Corrective Action Plan at page 145.

Federal Agency: Department of Health and Human Services Federal Program Title: Refugee and Entrant Assistance Assistance Listing: 93.566 Federal Grant ID Numbers: 2301SCRCMA and 2401SCRCMA Pass-Through Entity: Not applicable Award Period: October 1, 2022, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.303(a) requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 45 CFR § 400.53 (a)(4) requires eligibility for refugee cash assistance be limited to those who are not full-time students in institutions of higher education, as defined by the Director. 45 CFR § 400.66 states requirements for benefit payment calculations. 45 CFR § 400.211 provides the methodology of the time-eligibility period for refugees. Condition: The Department was not in compliance with several eligibility requirements. Cause: The Department did not have adequate internal controls in place to prevent the issues identified. Effect: The Department is not in compliance with eligibility requirements. Questioned Costs: $410 Context: Sixty case files were selected for testing and the following discrepancies were identified: (1) All case files tested lacked documentation to show that the Department verified that the individuals were not full-time students at institutions of higher education. (2) Benefit payments were not properly calculated for seven cases. (3) Benefit payments were expensed outside of the twelve-month eligibility period for two cases. (4) The Department was unable to provide an existing control set in place for eligibility. Prior year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Department establish policies and procedures to ensure compliance with eligibility requirements. In addition, we recommend that the Department implement internal control procedures to ensure all elements of eligibility requirements are being met. Views of Responsible Officials and Corrective Actions Plan: Management agrees with the finding. See Corrective Action Plan at page 145.

Federal Agency: Department of Health and Human Services Federal Program Title: Refugee and Entrant Assistance Assistance Listing: 93.566 Federal Grant ID Number: 2101SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2020, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: The Department did not ensure one key line-item was accurately reported on the financial report. Cause: The Department's internal controls failed to prevent inaccurate reporting of expenditures. Effect: The accuracy of the financial report could not be validated. Questioned Costs: None Context: The reported federal share of expenditures did not agree to supporting documentation. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its internal controls to ensure all reports are accurately prepared and submitted. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 146.

Federal Agency: Department of Health and Human Services Federal Program Title: Refugee and Entrant Assistance Assistance Listing: 93.566 Federal Grant ID Number: 2301SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2022, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). 2 CFR § 200.303 requires that the 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. Condition: The Department did not submit a FFATA report for fiscal year 2024. Cause: The Department had two unique entity identifier (UEI) numbers. The FSRS wouldn’t allow the Department to submit a FFATA as it was unable to determine the appropriate UEI to assign to the report. Effect: We were unable to determine compliance with FFATA reporting requirements. Questioned Costs: None Context: The Department could not provide documentation that it submitted one of the two FFATA reports selected for testing, although it had subawards of $30,000 or more. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department take steps to ensure FFATA submissions and retention of supporting documentation to demonstrate compliance with reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 146.

Federal Agency: Department of Health and Human Services Federal Program Title: Refugee and Entrant Assistance Assistance Listing: 93.566 Federal Grant ID Numbers: 2201SCRSSS and 2301SCRSSS Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2026 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR § 200.332(e) requires that all pass-through entities monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. 45 CFR § 75.352 requires that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 45 CFR § 75.352(a)(1) (i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Condition: The Department did not comply with federal subrecipient monitoring requirements. Cause: Due to staffing turnover, the Department’s internal controls failed to ensure proper subrecipient monitoring, including the submission of subaward agreements for all subrecipients. Effect: The Department is not in compliance with federal subrecipient monitoring requirements. Questioned Costs: $1,125,412 Context: For the two subrecipients tested: • The Department did not provide the correct subaward for one. • The Department did not perform required monitoring procedures for either. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department implement procedures to ensure all subawards are properly submitted and proper retention of those documents. Additionally, the Department should establish procedures to ensure all subrecipients are appropriately monitored and that single audit reports are reviewed. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Federal Agencies: Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Assistance Listing: 93.558 Federal Grant ID Number: 2201SCTANF Pass-Through Entity: Not applicable Award Period: October 1, 2022, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.405(d) requires costs that benefit two or more projects or activities to be allocated among projects based on the proportional benefit or, if that cannot be determined feasibly, allocated on another reasonable, documented basis. Condition: Costs charged to the program were not properly allocated. Cause: Department controls failed to ensure costs were properly allocated based upon proportional benefit or on a reasonable, documented basis. Effect: The potential for overcharging the grant exists when costs charged to federal awards are not properly allocated. Questioned Costs: $491 Context: For two of ten TANF non-payroll transactions tested, the costs were not properly allocated to match proportional benefit to each allowable funding source. This is a repeat finding from the fiscal year 2023 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-032 Recommendation: We recommend that the Department strengthen its efforts to review and update its procedures to ensure that all costs charged to the grants are properly allocated to applicable grants and funding sources based upon proportional benefit. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Federal Agencies: Department of Agriculture and Department of Health and Human Services Federal Program Titles: SNAP Cluster and Temporary Assistance for Needy Families Assistance Listings: 10.551, 10.561, and 93.558 Federal Grant ID Numbers: 5SC400407 and 2201SCTANF Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.430 states that (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with a non-federal entity’s laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR § 200.303 requires that the non-federal entity 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. Condition: Personnel expenditures for one employee were charged to the federal award without documented approval as required by the Department’s internal control procedure. Cause: The Department failed to retain salary and approval documentation supporting the employee's personnel charges to the grant program. Effect: The Department could incorrectly charge the federal award for personnel costs. Questioned Costs: None Context: There were five employees tested that were paid out of TANF funds and not SNAP funds and five employees tested that were paid out of TANF and SNAP funds. One payroll transaction that was paid out of SNAP and TANF funds did not have an updated State Personnel Action Form applicable to the pay the employee received in the selected period. Therefore, we were not able to confirm that the employee's pay during the selected period was allowable, as it was not supported by adequate documentation. This is a repeat finding from the fiscal year 2023 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2023-034 Recommendation: We recommend that the Department strengthen its efforts to consistently adhere to its procedures including maintaining the approved State Personnel Action Form to support the personnel charges and allocations to applicable funding sources. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 148.

Federal Agency: Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Assistance Listing: 93.558 Federal Grant ID Numbers: 2201SCTANF and 2301SCTANF Pass-Through Entity: Not applicable Award Period: October 01, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 265.7(a) requires that each state's quarterly reports, including the TANF Data Report, be complete and accurate. 2 CFR § 200.303 requires that the 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. Condition: Discrepancies existed between the ACF-199 (TANF Data Report) and the Department’s records. Documentation was not retained to determine that the report had been reviewed prior to submission as required by the Department’s policies and procedures. Cause: The incorrect source data was utilized when completing the referenced data element on the performance report. Effect: Some of the data fields reported on the ACF-199 report are inconsistent with the supporting case records. Questioned Costs: None Context: Key data elements for twenty-five families were tested from one quarterly ACF-199 report. A discrepancy was noted for one data element related to recording the number of months countable towards the federal time limit for assistance. This is a repeat finding from the fiscal year 2023 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Correction Action Implemented”. Due to this issue repeating for fiscal year 2024, this issue has not been fully corrected. Prior Year Single Audit Finding Number: 2023-035 Recommendation: We recommend that the Department strengthen its processes to ensure that federal reports are free from error prior to submission. We also recommend that the Department update and review processes to ensure proper documentation of supervisory review is maintained. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 148.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Federal Grant ID Number: None Provided Pass-Through Entity: Not applicable Award Period: March 3, 2021, through December 31, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.405(a) states that a cost is allocable to a particular federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. Condition: Costs charged to the program were not adequately allocated. Cause: The Authority failed to ensure costs were properly allocated based upon Rural Infrastructure Authority’s cost allocation plan for FY24. Effect: The potential for overcharging the grant exists when cost charged to the federal award are not adequately supported. Questioned Costs: $183 Context: Two of forty-seven expenditures tested had costs improperly charged to the federal award. The two transactions involved allowable charges that benefited multiple grant programs and activities but were not properly allocated to match Rural Infrastructure Authority’s cost allocation plan for FY24. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Authority review and update its procedures to ensure that all costs charged to the grant are properly allocated to applicable grants and funding sources based upon their yearly cost allocation plan. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listings: 21.027 Federal Grant ID Numbers: None Provided Pass-Through Entity: Not applicable Award Period: March 3, 2021, through December 31, 2026 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.403 (a) costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. 2 CFR § 200.302 (b) (3) states the financial management system of each non-federal entity must provide records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. 2 CFR § 200.303 requires that the 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 statues, regulations, and the terms and conditions of the federal award. Condition: Costs charged to the program were not necessary and reasonable to the purpose of the program, were not adequately supported, and were improperly charged. Cause: The Department’s review process and controls failed to prevent the identified issues. Effect: Expenditures were charged to the grant that were neither essential nor reasonable for the construction of the health laboratory, including charges lacking proper documentation. Questioned Costs: $9,090 Context: For two out of seven transactions tested, the Department reimbursed nonallowable costs to their construction contractor in the amount of $8,164. For one out of seven transactions tested, the Department was not able to produce adequate supporting documentation to determine that the transactions were an allowable cost. Consequently, this led to a questioned cost totaling $33. For five out of seven transactions tested, the supporting documentation did not agree to the amount charged. Consequently, this discrepancy led to a questioned cost totaling $893 due to miscalculations. Prior Year Single Audit Report Finding Number: Not applicable. Recommendation: We recommend that the Department strengthen controls to ensure the review process consists of the following: • Documentation is obtained and maintained to support that expenditures are allowable prior to reimbursement. • There is a segregation of duties between the individual preparing the reimbursement request and the approver, both of whom must be employed by the Department. • The preparer and approver should include recalculations and document a thorough inspection of supporting documentation in their review. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Federal Agencies: Department of Agriculture and Department of Health and Human Services Federal Program Titles: WIC Special Supplemental Nutrition Program for Women, Infants, and Children, HIV Care Formula Grants, Epidemiology and Laboratory Capacity for Infectious Disease (ELC), Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises, Public Health Emergency Preparedness, Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, and HIV Prevention Activities Health Department Based Assistance Listings: 10.557, 93.917, 93.323, 93.391, 93.069, 93.354, and 93.940 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. Condition: The Department did not provide adequate support for its required quarterly reconciliations of the labor system to the payment system. Cause: The Department has not fully implemented the corrective action associated with this finding from the prior year. Effect: The Department can potentially allocate labor costs not associated with the grant program. Questioned Costs: None Context: The Department requires a quarterly reconciliation of the labor tracking system to the payment system to ensure that grants are billed for time and effort appropriately. As of the end of fiscal year 2024, the Department was still working on implementing the updated reconciliation process outlined in their corrective action plan from the prior year finding. Prior Year Single Audit Finding Number: 2023-024 for Public Health Emergency Preparedness, (Assistance Listing Number 93.069), Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response (Assistance Listing Number 93.354) and HIV Prevention Activities Health Department Based (Assistance Listing Number 93.940) only. Recommendation: We recommend the Department continue its efforts to strengthen their current policies and procedures to ensure that all charges to the grant are allowable. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 152.

Federal Agency: Department of Health and Human Services Federal Program Title: HIV Care Formula Grants Assistance Listing: 93.917 Federal Grant ID Number: 2 X08HA32379‐05‐00 Pass-Through Entity: Not applicable Award Period: September 30, 2022, through September 29, 2023 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the 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. Condition: Supporting documentation was not adequate to determine if federal reimbursements were properly reviewed and approved by a supervisor as required by the Department’s policies and procedures. Cause: Documentation that was provided was inadequate to support that the employee who completed the drawdown request was a different individual than the employee who reviewed and approved the drawdown. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None Context: For one out of fourteen drawdown requests tested, supporting documentation was not adequate to demonstrate that a proper review and approval by a supervisor occurred. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department follow its policies and procedures to ensure proper documentation of supervisory review is maintained supporting a supervisory review was performed and that there is a segregation of duties between the individual completing the drawdown request and the individual approving the drawdown request. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 153.

Federal Agency: Department of Agriculture Federal Program Title: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Assistance Listing: 10.557 Federal Grant ID Number: 5SC700706 and 5SC700715 Pass-Through Entity: Not Applicable Award Period: October 1, 2022, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. Condition: Expenditures, which did not meet the applicable requirements, were charged prior to and after the program’s period of performance. Cause: Department controls failed to prevent charging the grant for costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $1,856 Context: Two of the forty transactions selected for testing from costs recorded during the beginning period of the grant were for costs incurred prior to the applicable period of performance. Additionally, two of the forty transactions selected for testing from costs recorded during the ending period of the grant were for costs incurred after the applicable period of performance. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department strengthen internal controls to ensure all expenditures charged to federal awards are incurred within the grant’s period of performance. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 153.

Federal Agency: Department of Health and Human Services Federal Program Titles: Epidemiology and Laboratory Capacity for Infectious Disease (ELC), Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, and HIV Prevention Activities Health Department Based Assistance Listings: 93.323, 93.354, and 93.940 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: The Department did not submit timely FFATA reports in accordance with FFATA reporting requirements. Cause: Department controls failed to ensure timely report submission. Effect: The Department was not in compliance with FFATA reporting requirements. Questioned Costs: None Context: FFATA reports for five Epidemiology and Laboratory Capacity for Infectious Disease (ELC) subawards selected for testing were not submitted timely. Additionally, this is a repeat finding from the fiscal year 2023 Single Audit for the Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, and HIV Prevention Activities Health Department Based programs. Although we noted partial corrective action had taken place from the prior year, we encountered two untimely FFATA submissions and two FFATA reports not submitted while performing follow-up procedures in fiscal year 2024. Prior Year Single Audit Finding Number: 2023-028 for Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response (Assistance Listing Number 93.354) and HIV Prevention Activities Health Department Based (Assistance Listing Number 93.940) only. Recommendation: We recommend the Department continue its efforts to strengthen internal controls to ensure continuous monitoring and reviewing of project obligations results in reports that are submitted in compliance with FFATA reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 155.

Federal Agency: Department of Health and Human Services Federal Program Titles: Epidemiology and Laboratory Capacity for Infectious Disease (ELC) and Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Assistance Listing: 93.323 and 93.391 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: August 1, 2019, through July 31, 2027 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the non-federal entity 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. Condition: Discrepancies existed between the federal financial reports and the accounting system. Additionally, Department did not document a supervisory review and approval for all submitted reports. Cause: The Department misclassified unliquidated obligations as expenditures. Also, the Department could not locate the documentation of the supervisory review. Effect: The accuracy of the reported federal share of expenditures could not be fully validated. Additionally, without a supervisory review, there is an increased risk of inaccurate reporting. Questioned Costs: None Context: For all five ELC reports selected for testing, the Department reported expenditures incurred after the reporting period end date. Additionally, for one of the ELC reports and for the sole STLT report tested, the Department failed to maintain evidence of review and approval. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department strengthen procedures to ensure that federal reports are submitted in accordance with reporting requirements and that records are maintained to support that a segregation of duties exists between report preparers and reviewers. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

Federal Agency: Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Disease (ELC) Assistance Listing: 93.323 Federal Grant ID Number: 6 NU50CK000542-05-08 Pass-Through Entity: Not applicable Award Period: August 1, 2019, through July 31, 2027 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 180.300 requires that when a non-federal entity enters into a covered transaction (contracts for goods and services that are expected to equal or exceed $25,000, as well as all subawards to subrecipients, irrespective of award amount) with an entity of a lower tier, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. The regulation lists several permitted methods for verification, including the collection of a certification from the entity. Condition: Compliance with suspension and debarment regulations could not be confirmed for one vendor contract. Cause: The Department could not locate the vendor’s signed contract agreement containing the suspension and debarment certification clause. Effect: The Department's compliance with federal suspension and debarment requirements was not supported by appropriate documentation. Questioned Costs: None Context: The Department verifies suspension and debarment through a certification clause embedded in the vendor contract. For one of eight vendors tested, the Department was unable to locate a signed vendor contract agreement with the required clause. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department consistently adhere to its procedures including maintaining the signed contract agreement containing the suspension and debarment terms and conditions for all applicable vendors. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

Federal Agency: Department of Education Federal Program Title: Title I Grants to Local Education Agencies Assistance Listing: 84.010 Federal Grant ID Number: S010A220040 Pass-Through Entity: Not applicable Award Period: July 1, 2022, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: The Department's review of subrecipient maintenance of effort (MOE) failed to detect incorrect calculations. Cause: MOE is reviewed by program personnel during subrecipient monitoring which is every four years rather than every year. Effect: Without a thorough annual review, subrecipients could receive incorrect funding without meeting MOE requirements. Questioned Costs: None Context: For three out of twelve subrecipients tested, the incorrect fiscal years were used in the MOE calculations. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure an adequate annual review of its subrecipients' MOE calculations. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 119.

Federal Agency: Department of Education Federal Program Title: Title I Grants to Local Education Agencies Assistance Listing: 84.010 Federal Grant ID Number: S010A220040 Pass-Through Entity: Not applicable Award Period: July 1, 2022, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: A FFATA reporting discrepancy was identified. Cause: Due to a clerical error, the subaward was entered incorrectly. Effect: The Department was not in compliance with FFATA reporting requirements. Questioned Costs: None Context: One of eight subawards tested from the FFATA report did not agree to supporting documentation. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure an adequate review is completed prior to report submission. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 120.

Federal Agency: Department of Education Federal Program Titles: Title I Grants to Local Education Agencies and Supporting Effective Instruction State Grants Assistance Listings: 84.010 and 84.367 Federal Grant ID Numbers: S010A220040 and S367A220038 Pass-Through Entity: Not applicable Award Period: July 1, 2022, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: Documentation was not adequate to support compliance with oversight and monitoring responsibilities. Cause: The Department failed to retain documentation demonstrating performance of a supervisory review and approval. Effect: We were unable to determine compliance with the stated requirement. Questioned Costs: None Context: For one of two charter schools tested with charter management organization relationships, supervisor review and approval of compliance with oversight and monitoring was not documented. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure proper documentation is maintained for each special test and provision. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 120.

Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund Assistance Listing: 84.425 Federal Grant ID Number: S425D210019 Pass-Through Entity: Not applicable Award Period: January 05, 2021, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: The Office of Management and Budget (OMB) compliance supplement requires, in part, that Elementary and Secondary School Emergency Relief (ESSER) grantees submit an annual performance report (OMB No. 1810-0749 for ESSER) with data on actual expenditures, planned expenditures, subrecipients, and uses of funds, including mandatory reservations and verifying key line items. Condition: The Annual Performance Report did not agree to supporting documentation. Cause: Due to a clerical error, data in the Annual Performance Report was incorrect. Effect: The Department was not in compliance with the annual performance reporting requirements. Questioned Costs: None Context: For one of ten school districts tested, the ESSER II allocation amount on the Annual Performance Report did not agree to supporting documentation. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure all calculations are correct prior to submitting the Annual Performance Report. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 121.

Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: FFATA reporting and timing errors were identified. Cause: Administrative turnover increased workloads which led to delays in submission and retention of the FFATA reports. Effect: The Office was not in compliance with FFATA reporting requirements. Questioned Costs: None Context: Seven subawards were selected for testing and the following compliance errors were identified during the testing:  The FSRS could not be accessed for two of the subawards in order to test reporting compliance for the subawards.  For one of the subawards tested, the action was not reported in the FSRS by the last day of the month following the month that the subaward was made. This is a repeat finding from the fiscal year 2022 Single Audit. The Office stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2023, this issue has not been fully corrected. Prior Year Single Audit Report Finding Number: 2022-006 Recommendation: We recommend the Office continue its efforts to strengthen internal controls to ensure continuous monitoring and reviewing of project obligations resulting in reports that are submitted in compliance with FFATA reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 122.

Federal Agency: Department of Education Federal Program Title: Rehabilitation Services Vocational Rehabilitation Grants to States Assistance Listing: 84.126 Federal Grant ID Number: H126A220060 Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: The Department did not record fourth quarter indirect cost adjustments within the correct fiscal year. Cause: Due to turnover of key personnel at the end of the fiscal year, the Department’s ability to calculate and create the journal entries was constrained. Effect: As of June 30, 2023, the Schedule of Expenditures of Federal Awards was overstated by $378,960 because the Department failed to redistribute costs to other funding sources for the fourth quarter. Questioned Costs: $378,960 Context: The Department utilizes a cost allocation plan and at the end of each quarter a journal entry is created to adjust directly recorded administrative costs within the indirect cost pool to the various federal programs based upon the approved cost allocation plan bases. Administrative costs that were charged to the grant program should have been redistributed to other federal grant programs by the end of the fiscal year based on the fourth quarter cost allocation plan calculations. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department review and update its policies and procedures to ensure that indirect cost entries are recorded within the correct fiscal year. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 124.

Federal Agency: Department of Education Federal Program Title: Rehabilitation Services Vocational Rehabilitation Grants to States Assistance Listing: 84.126 Federal Grant ID Number: H126A210060 Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. 2 CFR § 200.344(b) requires that all financial obligations incurred under the federal award be liquidated no later than 120 calendar days after the end date of the period of performance. Condition: Expenditures were incurred and liquidated after the grant’s period of performance. Cause: The Department’s internal controls failed to prevent expenditures from being charged outside the grant’s period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $251 Context: For four of twenty transactions tested, program expenditures were not incurred and liquidated in accordance with program regulations. The Department detected the errors, but correcting journal entries were not made until the subsequent fiscal year. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Department review and update internal controls to ensure that expenditures are incurred and liquidated within the grant’s period of performance. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 125.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI083544, B08TI084670, and B08TI085832 Pass-Through Entity: Not applicable Award Period: March 15, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.405(a) states that a cost is allocable to a particular federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. 2 CFR § 200.303 requires that the 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. Condition: Costs charged to the program were not adequately supported. Cause: Department controls failed to ensure costs were properly allocated or that proper supporting documentation was retained. Effect: The potential for overcharging the grant exists when costs charged to federal awards are not adequately supported, including documentation of the proportional benefit to the grant award. Questioned Costs: Unknown Context: Three of sixty expenditure transactions tested had costs improperly charged to the federal award. One transaction had insufficient documentation to support the expenditure was related to the federal award. The other two transactions involved allowable charges that benefited multiple grant programs and activities but were not properly allocated to match proportional benefit to each allowable funding source. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department review and update its procedures to ensure that all costs charged to the grant are allowable and properly allocated to applicable grants and funding sources based on benefit. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 126.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI084670 and B08TI085832 Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.430 states that (a) costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with a non-federal entity’s laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR § 200.303 requires that the 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. Condition: The Department did not have adequate controls in place to ensure timesheets were properly completed and reviewed by a supervisor, maintained by the agency, and that the time and effort documentation agreed to salary allocations in the accounting system. Cause: Department controls failed to prevent the identified issues. Effect: The Department is not in compliance with applicable allowable activities/cost requirements. Questioned Costs: Unknown Context: For fourteen out of sixty payroll transactions, time and effort documentation was either missing or did not agree to the funding percentages per the accounting system. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department implement policies and procedures to ensure time and effort reports are properly completed, reviewed, and maintained. We also recommend the Department ensure the accounting system accurately reports actual time worked. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 127.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2020, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the 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. Condition: Supporting documentation was not adequate to determine if federal reimbursements were properly reviewed and approved by a supervisor prior to requesting a drawdown as required by the Department’s policies and procedures. Cause: Documentation that was provided was inadequate to support that the employee who completed the drawdown request was a different individual than the employee who reviewed and approved the drawdown prior to the reimbursement request. Effect: The Department may request improper drawdowns due to a lack of segregation of duties. Questioned Costs: None Context: For six out of eight drawdown requests tested, supporting documentation was not adequate to demonstrate that a proper review and approval by a supervisor occurred prior to the federal reimbursement request. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department follow its policies and procedures to ensure proper documentation of supervisory review is maintained supporting a supervisory was performed and that there is a segregation of duties between the individual completing the drawdown request and the individual approving the drawdown request. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 127.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI083475 Pass-Through Entity: Not applicable Award Period: October 1, 2020, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the 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. Condition: The Department failed to retain documentation demonstrating proper internal controls over level of effort and earmarking requirements. Cause: The Department failed to retain documentation demonstrating performance and approval of the monthly Internal Update Budget workbooks. Effect: The Department may not meet level of effort or earmarking requirements without proper reviews. Questioned Costs: None Context: For one grant that closed during the audit period, the Department was unable to provide documentation of tracking and monitoring requirements using monthly Internal Update Budget workbooks as required by the Department’s procedures. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department review and update policies and procedures to ensure proper documentation is maintained to support amounts as well as the review of level of effort and earmarking requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 128.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI085832 and B08TI083475 Pass-Through Entity: Not applicable Award Period: October 1, 2020, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs be incurred during the approved budget period. Condition: Expenditures were incurred and charged outside of the period of performance. Cause: Department controls failed to prevent charging the grant for costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Questioned Costs: $1,090 Context: One of five transactions selected for testing from costs recorded during the first period of the grant was for a cost incurred prior to the applicable period of performance. One of eight transactions selected for testing costs for which the obligation had not been paid as of the end of performance had costs incurred after the ending period of performance. One of nine transactions selected for testing journal entries that occurred during the fiscal year incurred charges after the period of performance end date. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department review and update its internal controls to ensure that all expenditures charged to Federal awards are incurred within the grant’s period of performance. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 128.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: B08TI083475 Pass-Through Entity: Not applicable Award Period: October 1, 2020, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR § 200.303 requires that the 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. Condition: We tested the sole SF-425 report submitted during fiscal year 2023 and noted the Department did not document a supervisory review and approval. Cause: The Department does not have a policy requiring a reviewer separate from the preparer. Effect: Without a supervisory review, there is an increased risk of inaccurate reporting. Questioned Costs: None Context: The report was not reviewed by an employee other than the report preparer prior to submission. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department strengthen policies and procedures to require a report reviewer other than the preparer. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 129.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition : We identified noncompliance with FFATA reporting requirements. Cause: Due to staffing turnover, the FSRS could not be accessed to provide the FFATA reports that were submitted during fiscal year 2023. Effect: We were unable to determine compliance with FFATA reporting requirements. Questioned Costs: None Context: The Department could not provide documentation that it had submitted FFATA reports although it had subawards of $30,000 or more. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department take steps to assure access to FFATA submissions and retention of supporting documentation to demonstrate compliance with reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 129.

Federal Agency: Department of Health and Human Services Federal Program Title: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing: 93.959 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2020, through September 30, 2025 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.352 requires that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 45 CFR § 75.352(a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. 2 CFR § 200.303 requires that the 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. Condition: The Department was not in compliance with several subrecipient monitoring requirements. Cause: The Department’s internal controls failed to ensure adequate communication to the subrecipients through the annual subaward process as required by federal regulations. Additionally, the Department’s internal controls failed to include a review and approval process to ensure proper subrecipient monitoring occurred. The Department’s subrecipient monitoring policy states that miscellaneous subrecipients receiving $50,000 or greater are randomly selected for an annual review. However, after inquiry with the Department, no miscellaneous subrecipients had an annual review in FY2023. Effect: The Department is not in compliance with federal subrecipient monitoring requirements. Questioned Costs: None Context: The following discrepancies were encountered during testing of eight subrecipients selected for testing: • All forty-four subawards provided by the Department did not contain all of the information required by 45 CFR § 75.352(a). • For seven of the eight subrecipients tested, the Department did not have adequate documentation showing a proper review and approval of subrecipient monitoring reports. • One of the eight subrecipients selected for testing was not monitored as required by the Department’s policy. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department update its subrecipient agreements to incorporate all required information to ensure adequate communication to subrecipients and to ensure compliance with federal requirements. Additionally, the Department should update and implement policies to ensure all subrecipients are being appropriately monitored and subrecipient monitoring reports are properly reviewed and approved. We recommend that the Department follow its policies and procedures to ensure that miscellaneous subrecipients receiving $50,000 or greater have an annual review. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 130.

Federal Agency: Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Federal Grant ID Number: None Provided Pass-Through Entity: Not applicable Award Period: March 3, 2021, through December 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: The Department’s review of key line-item amounts on quarterly Project and Expenditure Reports did not ensure the accuracy of reported amounts. Cause: The Department did not ensure State agencies utilized the same procedures when calculating and reporting key line-item amounts. Effect: Treasury will not be able to accurately track key line item amounts. Questioned Costs: None Context: For the following quarterly reports, we noted: July – September 2022:  Current period expenditure amount was understated by $750.97 thousand.  Cumulative expenditure amount was understated by $215.19 thousand. April – June 2023:  Current period expenditure amount was understated by $3.16 million.  Cumulative expenditure amount was understated by $3.18 million. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure review responsibilities include requiring all State agencies to report expenditures posted to the accounting system as of the tenth day of the month following the period covered by each quarterly report. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 131.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster and Children’s Health Insurance Program Assistance Listing: 93.775, 93.777, 93.778, and 93.767 Federal Grant ID Number: 05-2105-SC-5001, 05-1005-SC-5MAP, and 05-2305-SC-5021 Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. 42 CFR § 435.916(a)(1) requires the Department renew MAGI-based determinations of eligibility once every twelve months and no more frequently than once every twelve months. 42 CFR § 435.916(b) requires the Department renew non-MAGI-based determinations of eligibility at least once every twelve months.. Condition: The Department’s monitoring process and eligibility systems do not ensure recipients’ eligibility determinations are renewed annually as required by 42 CFR § 435.916(a)(1) and 42 CFR § 435.916(b). Cause: The Department did not comply with the annual review requirement due to a backlog in eligibility determination processing. Effect: Without an annual review, the Department could provide Medicaid and CHIP benefits to ineligible recipients because all recipients are not being recertified as required by 42 CFR § 435.916(a)(1) and 42 CFR § 435.916(b). Questioned Costs: None Context: The Department did not complete annual reviews during the Public Health Emergency (PHE) (beginning January 27, 2020) based on guidance from Centers for Medicare & Medicaid Services (CMS). However, we determined that eight Medicaid and seven CHIP recipients did not have an annual renewal completed during the twelve months prior to the PHE being instituted. Prior Year Single Audit Report Finding Number: 2022-004 Recommendation: We recommend the Department ensure staffing is adequate to confirm only eligible recipients receive benefits by completing periodic eligibility determination renewals. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 132.

Federal Agency: Department of Health and Human Services Federal Program Title: Children’s Health Insurance Program Assistance Listing: 93.767 Federal Grant ID Number: 05-2305-SC-5021 Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. 42 CFR § 435.926(b)(1) requires enrolled recipients under age nineteen or under a younger age specified by the Department in its State plan are eligible for CHIP benefits. Section 2.1(d) of the State plan sets the eligibility age for CHIP benefits at under age 19. Condition: The Department’s monitoring process and eligibility systems did not ensure recipients nineteen or older who are deemed ineligible no longer receive CHIP benefits. Cause: The Department did not complete the close out process to remove the recipients from the list of eligible beneficiaries. Effect: The Department could be providing CHIP benefits to ineligible recipients. Questioned Costs: $6,396 Context: The Department provided a closure notice to one recipient detailing that the recipient will no longer be eligible for CHIP benefits. The recipient continued to receive benefits due to the Department not completing the close out process. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department ensure staffing is adequate to ensure that only eligible recipients receive benefits by completion of the eligibility determination close out processes. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 133.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster and Children’s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, and 93.767 Federal Grant ID Number: 05-2105-SC-5001, 05-1005-SC-5MAP, and 05-2305-SC-5021 Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. 42 CFR § 438.8(k)(1) requires the Department, through its contracts, must require each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), or Prepaid Ambulatory Health Plan (PAHP) to submit a report to the Department that includes the information required by 42 CFR § 438.8(k)(1)(i) through 42 CFR § 438.8(k)(1)(xiii) each year. Condition: The Department’s review of reporting templates did not ensure the thirteen required elements were included in reports submitted by MCOs. Cause: The Department stated that it would not be cost effective for the MCOs to include a comparison between audited financial information and other financial information in reports submitted to the Department as required by 42 CFR §438.8 (k)(1)(xi). Effect: MCOs could potentially misstate financial information reported to the Department. Questioned Costs: None Context: We noted that a comparison of other financial information and audited basic financial statements was not included in all five MCO reports tested. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department strengthen report review procedures to ensure the MCO’s provide a comparison between other financial information and audited basic financial statements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 133.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listings: 93.775, 93.777, and 93.778 Federal Grant ID Number: 05-2105-SC-5001 and 05-1005-SC-5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. 42 CFR § 455.502(c) requires that the Department complies with reporting requirements describing the effectiveness of the Medicaid Recovery Audit Contractor (RAC) programs as specified by Centers for Medicare & Medicaid Services (CMS). Condition: The Department’s review of quarterly CMS-64 reports did not ensure the federal share of overpayments recovered by the Medicaid RAC were included on each report. Cause: Due to a coding error in the accounting system the Department was not aware of overpayments recovered by the Medicaid RAC that needed to be reported on each CMS-64 report. Effect: CMS is unable to monitor and evaluate the performance of the State’s Medicaid RAC program. Questioned Costs: None Context: The Department’s RAC program recoveries are not being reported to CMS. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures by correcting the coding error in the accounting system to ensure that the federal share of overpayments recovered by the Medicaid RAC are reported on the quarterly CMS-64 report submitted by the Department. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 134.

Federal Agency: Department of Health and Human Services Federal Program Title: Public Health Emergency Preparedness Assistance Listing: 93.069 Federal Grant ID Number: NU90TP922053 Pass-Through Entity: Not applicable Award Period: July 1, 2022, through June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. 2 CFR § 200.403 requires expenditures be necessary and reasonable for the performance of the Federal award and be allocable. Condition: Costs were improperly charged to the federal award. Cause: The Department failed to ensure that all costs charged to the grant were allowable. Effect: An amount of $295 was improperly allocated and recorded to the grant program. Questioned Costs: $295 Context: One of sixty non-payroll disbursements included two purchases that were incorrectly charged to the grant due to an allocation error. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its current policies and procedures to ensure that all charges to the grant are allowable. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 135.

Federal Agency: Department of Health and Human Services Federal Program Titles: Public Health Emergency Preparedness, Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, and HIV Prevention Activities Health Department Based Assistance Listings: 93.069, 93.354, and 93.940 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: July 1, 2022, through June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: An individual with programmatic knowledge did not review and approve certain costs as allowable to the grant. Cause: The Department did not have adequate internal controls in place to ensure that costs were properly reviewed and approved for allowability before being charged to the grant. Effect: Without adequate controls in place, unallowable expenditures may be charged to the grant. Questioned Costs: Unknown Context: Two of sixty transactions tested for Public Health Emergency Preparedness, two of sixty transactions tested for Public Health Emergency Response, and two of sixty transactions tested for HIV Prevention Activities Health Department Based, had invoiced expenditures that were not approved by programmatic staff prior to payment. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department strengthen controls to ensure that documentation is maintained to support that costs charged to the grant were reviewed and approved for allowability. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 135.

Federal Agency: Department of Health and Human Services Federal Program Titles: Public Health Emergency Preparedness, Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, and HIV Prevention Activities Health Department Based Assistance Listings: 93.069, 93.354, and 93.940 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: July 1, 2022, through June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: The Department failed to provide adequate support for the required quarterly reconciliations of the labor system to the payment system. Cause: Documentation of the reconciliations was not retained by program staff. Effect: One grant was charged for labor not associated with the grant program. Questioned Costs: $115,479 Context: The Department requires a quarterly reconciliation of the labor tracking system to the payment system to ensure that grants are billed for time and effort appropriately. The Department was not able to produce adequate support for the completion of this quarterly reconciliation for the three grants. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its procedures to ensure performance of the quarterly labor reconciliation process. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 136.

Federal Agency: Department of Health and Human Services Federal Program Title: Public Health Emergency Preparedness Assistance Listing No: 93.069 Federal Grant ID Number: NU90TP922053 Pass-Through Entity: Not applicable Award Period: July 1, 2022, through June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.313(e) states when original or replacement equipment acquired under a Federal award is no longer needed for the original project or program, the non- Federal entity must request disposition instructions from the Federal awarding agency. Condition: Federal regulations require that recipients request disposition instructions from the Federal awarding agency prior to disposal. Cause: The Department was not in compliance with federal regulations and applicable property and equipment requirements. Effect: The Department failed to prevent the retirement of an asset without guidance from the Federal awarding agency. Questioned Costs: Unknown Context: For the only asset disposal tested, the Department failed to comply with the requirements for proper disposal. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen its processes to ensure assets are disposed of in compliance with federal guidelines. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 136.

Federal Agency: Department of Health and Human Services Federal Program Title: Public Health Emergency Preparedness and Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listing: 93.069 and 93.354 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. 2 CFR § 200.313(d)(1) requires property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Condition: The Department was not in compliance with several equipment and real property requirements. Cause: The Department's processes failed to prevent the issues identified. Effect: The Department was not in compliance with federal regulations and applicable property and equipment requirements. Questioned Costs: None Context: The following discrepancies were encountered during the testing of equipment:  Nine of sixteen tested equipment purchases were not tracked according to Department procedures.  Three of ten purchased equipment tested were not included on the Department’s annual physical inventory of property. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend the Department strengthen procedures to ensure that accurate property records are maintained. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 137.

Federal Agency: Department of Health and Human Services Federal Program Title: HIV Prevention Activities Health Department Based Assistance Listing: 93.940 Federal Grant ID Number: NU62PS92641 Pass-Through Entity: Not applicable Award Period: July 1, 2022, through June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 180.300 requires that when a non-federal entity enters into a covered transaction (contracts for goods and services that are expected to equal or exceed $25,000, as well as all subawards to subrecipients, irrespective of award amount) with an entity at a lower tier, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. The regulation lists several permitted methods for verification, including the collection of a certification from subrecipients. Condition: Compliance with suspension and debarment regulations could not be confirmed for one vendor contract. Cause: The Department could not locate the vendor's signed contract agreement containing the suspension and debarment certification clause. Effect: The Department's compliance with federal suspension and debarment requirements was not supported by appropriate documentation. Questioned Costs: None Context: The Department verifies suspension and debarment through a certification clause embedded in the vendor contract. For one of eight vendors tested, the Department was unable to locate a signed vendor contract agreement with the required clause. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department consistently adhere to its procedures including maintaining the signed contract agreement containing the suspension and debarment terms and conditions for all applicable vendors. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 137.

Federal Agency: Department of Health and Human Services Federal Program Titles: Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response and HIV Prevention Activities Health Department Based Assistance Listings: 93.354 and 93.940 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: We identified noncompliance with FFATA reporting requirements. Cause: Due to staffing turnover, the FSRS could not be accessed to provide the FFATA reports that were submitted during fiscal year 2023. Effect: We were unable to determine compliance with FFATA reporting requirements. Questioned Costs: None Context: The Department could not provide documentation that they had submitted FFATA reports for subawards of $30,000 or more. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend that the Department take steps to ensure access to FFATA submissions and retention of supporting documentation to demonstrate compliance with reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 138.

Federal Agency: Department of Health and Human Services Federal Program Titles: Public Health Emergency Preparedness and HIV Prevention Activities Health Department Based Assistance Listings: 93.069 and 93.940 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.303 requires effective internal controls be established and maintained to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between the federal financial reports and the accounting system. Cause: The Department misclassified unliquidated obligations as expenditures. Effect: The accuracy of the reported federal share of expenditures could not be fully validated. Questioned Costs: None Context: For the two annual reports submitted for Public Health Preparedness and HIV Prevention Activities Health Department Based, the Department reported expenditures incurred after the reporting period end date. Prior Year Single Audit Finding Number: Not applicable. Recommendation: We recommend that the Department review its procedures to ensure that federal reports are submitted in accordance with the reporting requirements. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 138.

Federal Agency: Department of Health and Human Services Federal Program Titles: Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response Assistance Listings: 93.354 Federal Grant ID Number: NU90TP922116 Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.403(h) requires costs to be incurred during the approved budget period. Condition: Expenditures were charged to the program after the end of the period of performance. Cause: The Department's internal controls failed to prevent expenditures from being charged to the grant after close of the period of performance. Effect: Costs charged outside of the period of performance may not be allowable. Questioned Costs: None Context: During our testing of the final report for Public Health Emergency Response, we noted expenditures were recorded in the accounting system after grant closure. Prior Year Single Audit Finding Number: Not applicable Recommendation: We recommend that the Department review its internal controls to ensure all expenditures charged to a federal award are incurred within the grant’s period of performance. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 139.

Federal Agency: Department of Health and Human Services Federal Program Title: Foster Care Title IV-E Assistance Listing: 93.658 Federal Grant ID Numbers: 2101SCFOST, 2201SCFOST, and 2303SCFOST Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 42 USC § 672 describes the general eligibility requirements for foster care maintenance payments. 42 USC § 671(a)(20) outlines requirements for criminal background checks of foster care providers, including those for child care institutions. 45 CFR § 75.361 states record retention requirements of the non-federal entity pertinent to the federal award. Condition: Eligibility and allowable costs/cost principles related discrepancies were encountered for some payments. Cause: Department controls failed to ensure eligibility requirements were being met by retaining records for the required amount of time, and that all costs charged to the grant were allowable. Effect: The Department did not comply with eligibility and allowable costs/cost principles requirements. Questioned Costs: $7,560 Context: Sixty payments were selected for testing eligibility compliance. The following discrepancies were identified: (1) For ten payments tested, the related case files lacked some or all of the documents needed to verify that all the required criminal background checks had been completed prior to the dates covered by the payment. These include Federal Bureau of Investigation fingerprint background checks, South Carolina Law Enforcement Division checks, and the South Carolina Central Registry of Child Abuse and Neglect checks. (2) For five payments tested, adoption subsidies were being improperly charged to the federal award. Prior year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Department strengthen their current policies and procedures to ensure compliance with eligibility and allowable costs/cost principles requirements. In addition, we recommend that the Department implement procedures to ensure all required foster home records are properly retained. Views of Responsible Officials and Corrective Actions Plan: Management agrees with the finding. See Corrective Action Plan at page 140.

Federal Agency: Department of Health and Human Services Federal Program Titles: Foster Care Title IV-E and Temporary Assistance for Needy Families Assistance Listings: 93.658 and 93.558 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: October 1, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 75.403 outlines factors affecting allowability of costs, including adequate documentation. 45 CFR § 75.405(d) requires costs that benefit two or more projects or activities to be allocated among projects based on the proportional benefit or, if that cannot be determined feasibly, allocated on another reasonable, documented basis. Condition: Costs charged to the program were not adequately supported. Cause: Documentation and system issues caused the discrepancies noted. Effect: The potential for overcharging the grant exists when costs charged to federal awards are not adequately supported, including documentation of the proportional benefit to the grant award. Questioned Costs: Unknown Context: For eight of sixty Foster Care and three of sixty TANF non-payroll transactions tested, the costs included allowable charges that benefited multiple programs and activities but were not properly allocated to match proportional benefit to each allowable funding source. For the Foster Care program, this is a repeat finding from the fiscal year 2022 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was “Fully Corrected with Previously Reported Corrective Action Implemented”. Due to this issue repeating for fiscal year 2023, not all issues have been fully corrected. Prior year Single Audit Report Finding Number: 2020-032 for Foster Care (Assistance Listing Number 93.658) only. Recommendation: We recommend that the Department review and update its procedures to ensure all costs charged to the grant are allowable and properly allocated to applicable grants and funding sources based on benefit. Views of Responsible Officials and Corrective Actions Plan: Management agrees with the finding. See Corrective Action Plan at page 141.

Federal Agency: Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Assistance Listing: 93.558 Federal Grant ID Numbers: 2201SCTANF and 2301SCTANF Pass-Through Entity: Not applicable Award Period: October 01, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: We identified noncompliance with FFATA reporting requirements. Cause: The Department has two unique entity identifier (UEI) numbers. The FSRS wouldn’t allow the Department to submit a FFATA as it was unable to determine the appropriate UEI to assign to the report. Effect: The Department was not in compliance with FFATA reporting requirements. Questioned Costs: None Context: The Department did not submit FFATA reports, although it had subawards of $30,000 or more. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Department contact its federal awarding agency (Department of Health and Human Services) to resolve the issue of having two UEIs and confirm which UEI should be utilized to submit FFATA reports. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 142.

Federal Agencies: Department of Agriculture and Department of Health and Human Services Federal Program Titles: SNAP Cluster and Temporary Assistance for Needy Families Assistance Listings: 10.551, 10.561, and 93.558 Federal Grant ID Numbers: 5SC400407 and 2201SCTANF Pass-Through Entity: Not applicable Award Period: October 01, 2021, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR § 200.303 requires that the 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. Condition: Personnel expenditures for two employees were charged to the federal award without documented approval as required by the Department’s internal control procedure. Cause: The Department failed to retain salary and approval documentation supporting the two employee's personnel charges to the grant program. Effect: The Department could incorrectly charge the federal award for personnel costs. Questioned Costs: None Context: There were 60 employees tested that were only paid out of TANF funds and 60 employees tested that were paid out of TANF and SNAP funds. The following discrepancies were identified: 1) One payroll transaction that was only paid out of TANF funds was missing an approval by an appointed manager on their State Personnel Action Form that documents their salary and the percentage of their salary covered by the grant program. 2) One payroll transaction that was paid out of SNAP and TANF funds did not have an updated State Personnel Action Form applicable to the pay the employee received in the selected period. Therefore, we were not able to confirm that the employee's pay during the selected period was allowable, as it was not supported by adequate documentation. Prior Year Single Audit Report Finding Number: Not applicable Recommendation: We recommend the Department consistently adhere to its internal controls including maintaining the approved State Personnel Action Form to support the personnel charges and allocations to applicable funding sources. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 142.

Federal Agency: Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Assistance Listing: 93.558 Federal Grant ID Numbers: 2201SCTANF and 2301SCTANF Pass-Through Entity: Not applicable Award Period: October 01, 2021, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR § 265.7(a) requires that each state's quarterly reports, including the TANF Data Report, be complete and accurate. 2 CFR § 200.303 requires that the 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. Condition: Discrepancies existed between the ACF-199 (TANF Data Report) and the Department’s records. Documentation was not retained to determine that the report had been reviewed prior to submission as required by the Department’s policies and procedures. Cause: The incorrect source data was utilized when completing the referenced data element on the performance report. Effect: Some of the data fields reported on the ACF-199 report are inconsistent with the supporting case records. Questioned Costs: None Context: Key data elements for twenty-five families were tested from one quarterly ACF- 199 report. Two discrepancies were noted for one data element related to recording the number of months countable towards the federal time limit for assistance. Prior year Single Audit Report Finding Number: Not applicable Recommendation: We recommend that the Department strengthen its processes to ensure that federal reports are free from error prior to submission. We also recommend that the Department update and review processes to ensure proper documentation of supervisory review is maintained. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 143.

Finding 2022-001: Unemployment Insurance Benefit Payments (Material Weakness in Internal Controls) Condition: In March 2020, the President signed the CARES Act that authorized additional funding under the Unemployment Insurance (UI) program. This was followed by additional federal and state funding programs that increased grants available and modified eligibility requirements to support changes in employment status caused by the COVID-19 pandemic. Certain benefits under these programs extended into fiscal year 2022. There was a priority on distributing funds under self-attestation strategy with limited income verification to expedite disbursement of funds and support individuals in greatest need. As a result of this, many states saw a significant increase in fraudulent claims to historical highs. The U.S. Department of Labor and the Agency have partnered to investigate the extent and methods used to perpetrate fraud. For the Agency, eligibility determinations made by the management followed existing policies and procedures for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the policies and procedures in place were not the usual policies and procedures and so they were not adequate to completely prevent fraudulent claims. The Agency’s detective controls did identify abnormal claim activity; however, it was after the claims had already been paid. During our testing of a sample of 60 benefit payments we identified 3 payments that were fraudulent, total value of payments tested was $16,776 and total amount of fraud was $835. The extrapolated fraud amount over the total benefit payments of $179.4 million would be $9 million. Criteria: Per 2 CFR §200 Appendix XI, state responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state unemployment insurance tax structure; (3) collecting state unemployment insurance contributions from employers (commonly called “unemployment taxes”); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program’s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law and that state law and operations substantially comply with federal law. Effect: A lack of adequate internal controls over eligibility determinations may increase the likelihood of fraudulent claims being submitted and incorrectly paid. Known Questioned Costs: During our testing of a sample of 60 benefit payments we identified 3 payments that were fraudulent, the total value of payments tested was $16,776 and total amount of known fraud was $835. Likely Questioned Costs: Based upon the extrapolated fraud amount over the total benefit payment of $179.4 thousand the total amount of fraud would likely be $10 million. Cause: The Agency experienced unprecedented claims volume starting in fiscal 2021 and continuing into fiscal year 2022 with increased funding and additional program requirements with a priority for efficient distribution from both the U.S. Department of Labor and state officials. Recommendation: We recommend that the Agency continue to review, monitor, and enhance eligibility procedures to detect and/or prevent fraudulent claimants from receiving benefits. The Agency should work to enhance and update its assessment of risks related to the eligibility process and implement internal controls to help mitigate future fraudulent claims.

Item 2022-002: Report Submission to the Federal Audit Clearinghouse (Other Matter Required to be Reported Under the Uniform Guidance) (Material Weakness) Condition: The Agency did not prepare and submit its Data Collection Form and Reporting Package for the year ended June 30, 2022 to the Federal Audit Clearinghouse by the due date of March 31, 2023. Criteria: Per §200.512 of the Uniform Guidance, Report Submission, the audit shall be completed and the Data Collection Form and Reporting Package shall be electronically transmitted within the earlier of thirty (30) days after receipt of the auditor’s reports, or nine (9) months after the end of the audit period. If the due date falls on a Saturday, Sunday, or federal holiday, the Data Collection Form and Reporting Package are due the next business day. The Uniform Guidance does not permit the recipient to extend the due date. Cause: Management did not submit their Data Collection Form and Reporting Package by the due date due to an OIG review of the June 30, 2022 year end. Management delayed their reporting due to the completion of the OIG review and key accounting/finance personnel turnover. Effect: The Agency’s Data Collection Form and Reporting Package for the year ended June 30, 2022 was not prepared and submitted to the Federal Audit Clearinghouse by the due date. Recommendation: We recommend that management during times of unexpected increase activity ensure that all appropriate controls are in place to allow timely completion of audit procedures as well as submission of Data Collection Form and Reporting Package to the Federal Audit Clearinghouse.

Item 2022-003: Reporting (Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor (“National Office”) by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th day of the month following the close of the quarter. The ETA 2208A Report is required to be submitted on a quarterly basis to the National Office by the 45th day of the month following the close of the quarter. The ETA 2112 Report is required to be submitted on a monthly basis to the National Office by the first day of the second month following the close of the month of reference. The ETA 9052 Report is required to be submitted on a monthly basis to the National Office by the 30th day of the month following the month of reference. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor’s timelines. The reports were delayed due to program and system resources focused on claims processing as well as personnel shortages. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: Unemployment Insurance – One (1) ETA 191 quarterly report; Unemployment Insurance – Two (2) ETA 2208A quarterly reports; Unemployment Insurance – One (1) ETA 2112 monthly report; Unemployment Insurance – One (1) ETA 9052 monthly report. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster and Children?s Health Insurance Program (CHIP) Assistance Listings: 93.775, 93.777, 93.778, and 93.767 Federal Grant ID Numbers: 05-2105SC5MAP, 05-2205SC5MAP, 05-2105SC5ADM, 05-2205SC5ADM, 05-2105SC5021, and 05-2205SC5021 Pass-Through Entity: Not applicable Award Period: October 01, 2020, through September 30, 2023 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, that the agency must promptly determine eligibility between regular renewals of eligibility. In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulation and policies apply to both programs. Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 42 Medicaid recipients and 58 CHIP recipients. Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to a backlog in case processing. Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements. Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual. Prior Year Single Audit Finding Number: 2021-004 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 102.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster and Children?s Health Insurance Program (CHIP) Assistance Listings: 93.775, 93.777, 93.778, and 93.767 Federal Grant ID Numbers: 05-2205SC5MAP, 05-2205SC5ADM, 05-2105SC5021, and 05-2205SC5021 Pass-Through Entity: Not applicable Award Period: October 01, 2020, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 435.914 (a), the agency must include in each applicant?s case record facts to support the agency?s decision on his or her application. In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), that a State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulations apply to both programs. Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipient eligibility status. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for 3 Medicaid recipients and 3 CHIP recipients. Cause: According to Department personnel, some documentation was not scanned into the electronic case files and maintained in accordance with its State plan. Effect: The Department could not support eligibility determinations in accordance with its State plan. Recommendation: We recommend the Department strengthen controls over eligibility determinations to ensure documentation is maintained and reviewed in accordance with its State plan and federal regulations. Prior Year Single Audit Finding Number: 2021-005 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 103.

Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: FFATA reporting and timing errors were identified. Questioned Costs: None Context: Fourteen subawards were selected for testing and the following compliance errors were identified during the testing: ? The reported subaward obligation/action date did not agree to the subaward agreement date for one of the subawards tested. ? For seven of the subawards tested, the action was not reported in the FSRS by the last day of the month following the month that the subaward was made. ? The FSRS could not be accessed for four of the subawards in order to test reporting compliance for that subaward. Cause: Data entry errors and administrative delays led to the compliance errors identified in the testing. Effect: The Office was not in compliance with FFATA reporting requirements. Recommendation: We recommend the Office update their current internal control to include continuous monitoring and reviewing of project obligations to ensure that reports are submitted in compliance with FFATA reporting requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 105.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control Criteria: 2 CFR ? 200.303 states that the 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. Condition: Personnel expenditures for three employees were charged to the federal award without documented approval as required by the Office?s internal control procedure. Questioned Costs: None Context: Three of forty payroll transactions tested did not have a corresponding approved State Personnel Action form that documented each employee?s salary and the percentage of their salary covered by the grant program. Cause: Management did not document approval of payroll changes for grant employees to avoid errors in payroll processing. Effect: The Office could incorrectly charge the federal award for personnel costs. Recommendation: We recommend the Office consistently adhere to its internal controls including maintaining the approved State Personnel Action form to support the personnel charges and allocations to applicable funding sources. Prior Year Single Audit Finding Number: Not applicable. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 106.

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing: 14.228 Federal Grant ID Numbers: B20DW450001, B21DC450001, B20DC450001, B19DC450001, and B18DC450001 Pass-Through Entity: Not applicable Award Period: July 24, 2018, through September 1, 2028 Type of Finding: Significant deficiency in internal control over compliance Criteria: Per 2 CFR ? 200.303, the 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Supervisory personnel did not review certain reports prior to submission. Questioned Costs: None Context: We tested the Department?s Consolidated Annual Performance and Evaluation Report (CAPER), which includes the annual Section 3 report, and five Federal Funding Accountability and Transparency Act (FFATA) reports submitted by the Department. None of the FFATA reports were reviewed by supervisory personnel prior to submission. Cause: Department controls failed to ensure that supervisory personnel reviewed the reports prior to submission. Effect: Without supervisory review, there is an increased risk of inaccurate reporting. Recommendation: We recommend that Department personnel consistently follow policies in place to ensure reports are properly reviewed by supervisory personnel prior to submission. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 108.

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing: 14.228 Federal Grant ID Number: B-18-DP-06-0002 Pass-Through Entity: Not applicable Award Period: August 20, 2020, through November 19, 2032 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: We determined expenditure transactions were incorrectly classified in the general ledger. Questioned Costs: None Context: For two of twenty-two transactions tested, the Office classified subrecipient payments as contractual services. Cause: Office controls failed to ensure transactions were recorded properly in the general ledger. Effect: Subrecipient expenditures of $51,853 were omitted from the Office?s Schedule of Federal Awards (SEFA). Recommendation: We recommend that the Office ensure staff preparing and entering transactions into the accounting system have a good working knowledge of account codes as defined by the South Carolina Comptroller General?s Office (CG). In addition, supervisory personnel should closely review transactions to ensure proper classification in the general ledger. Further, the Office should seek guidance from the CG if questions regarding coding of transactions arises. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 109.

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing: 14.228 Federal Grant ID Numbers: P-19-SC-45-0DD2 and P-18-SC-45-MIT1 Pass-Through Entity: Not applicable Award Period: December 14, 2020, through August 19, 2032 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: We identified noncompliance with FFATA reporting requirements. Questioned Costs: None Context: The Office did not submit FFATA reports although it had subawards of $30,000 or more. Cause: Office personnel were unaware of FFATA reporting requirements. Effect: The Office was not in compliance with FFATA reporting requirements. Recommendation: We recommend that the Office implement procedures to ensure reports are submitted in compliance with FFATA reporting requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements Assistance Listing: 93.268 Federal Grant ID Numbers: 5 NH23IP922601-03-00, 1 N23IP922601-01-00, and 6 NH23IP922601-02-00 Pass-Through Entity: Not applicable Award Period: October 01, 2019, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: The Office of Management and Budget?s (OMB) 2022 Compliance Supplement states that effective control and accountability must be maintained for all vaccines under the Vaccines for Children (VFC) program. Vaccines must be adequately safeguarded and used solely for authorized purposes in accordance with guidance set forth in 42 USC 1396s. To comply with this requirement, the Department?s Vaccines for Children Operation Guide requires that all completed VFC compliance site visits be reviewed by the VFC coordinator, immunization program manager, or a designee. Condition: The Department did not consistently perform reviews of compliance visits of vaccine providers in accordance with its policy. Questioned Costs: None Context: We tested 37 compliance visits of providers to ensure the Department complied with applicable Special Tests and Provisions requirements. We determined the Department had not reviewed four of the compliance visits as of the end of our fieldwork. Cause: Due to the prioritization of annual VFC and other vaccine program enrollments, the Department was unable to review the site visits for these providers. Effect: In the absence of a compliance visit review, providers could have unresolved issues that could affect the quality and quantity of vaccines provided to VFC recipients. Recommendation: We recommend the Department ensure compliance visits are reviewed in accordance with Department policy. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 112.

Federal Agency: Department of Health and Human Services and Department of Agriculture Federal Program Titles: Adoption Assistance and Child and Adult Care Food Program Assistance Listings: 93.659 and 10.558 Federal Grant ID Numbers: 2001SCADPT, 2101SCADPT, and 5SC300329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 200.303 requires that the non-federal entity establish and maintain effective internal controls over the federal award that provide 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. Condition: Supporting documentation was not adequate to determine if federal reimbursements were properly reviewed and approved by a supervisor prior to requesting a drawdown as required by the Department?s policies and procedures. Questioned Costs: None Context: For two of five Adoption Assistance drawdowns and one of the five Child and Adult Care Food Program drawdowns selected for testing, supporting documentation was not adequate to demonstrate proper review and approval by a supervisor prior to the federal reimbursement request. Cause: The Department failed to retain documentation demonstrating performance of a supervisory review and approval. Effect: The Department may request improper drawdowns due to a lack of proper approval. Recommendation: We recommend that the Department follow their policies and procedures to ensure that proper documentation is maintained to support the review and approval of a drawdown of funds. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 113.

Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Numbers: 5SC300329 and 5SC308329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 200.332(d) requires that all pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Additionally, 7 CFR ? 226.6(m)(6) outlines the frequency and number of required institution reviews. Condition: The Department did not perform its subrecipient monitoring reviews in accordance with its policies and procedures and federal regulations. Questioned Costs: None Context: For fourteen of the sixty subrecipients tested, subrecipient monitoring reviews were not conducted within the three-year timeframe as set out in federal regulations. Cause: Due to staffing turnover, the Department did not comply with federal subrecipient monitoring requirements. Effect: The Department is not in compliance with federal requirements related to subrecipient monitoring requirements. Recommendation: We recommend that the Department follow its established policies and procedures for the program to ensure compliance with federal subrecipient monitoring requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 114.

Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Numbers: 5SC300329 and 5SC308329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 7 CFR ? 226.6(b)(3) requires that any new or renewing institution applying for participation in the Program be notified in writing of approval or disapproval by the State agency within 30 calendar days of the State agency's receipt of a completed application. Whenever possible, State agencies should provide assistance to institutions that have submitted an incomplete application. Any disapproved applicant institution or family day care home must be notified of the reasons for its disapproval and its right to appeal under paragraph (k) or (l), respectively, of this section. Condition: Documentation was not adequate to verify that applicants were notified in writing of approval or disapproval by the Department within 30 days of receiving a completed application. Questioned Costs: None Context: For eleven of sixty institutions tested, we could not verify if the Department sent an approval or disapproval notification within 30 days of receiving the completed applications. Cause: The Department?s internal controls failed to ensure timely notifications to applicants according to federal regulations. Effect: We could not confirm compliance with federal regulations requiring written notifications of application approval or disapproval within 30 days of receiving a completed application. Recommendation: We recommend that the Department review its internal controls to ensure timely notifications of application approvals and disapprovals. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Numbers: 5SC300329 and 5SC308329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 180.300 requires that when a non-federal entity enters into a covered transaction (contracts for goods and services that are expected to equal or exceed $25,000, as well as all subawards to subrecipients, irrespective of award amount) with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. The regulation lists several permitted methods for verification, including the collection of a certification from subrecipients. Condition: Compliance with suspension and debarment regulations could not be confirmed for one subrecipient. Questioned Costs: None Context: The Department verifies suspension and debarment through a certification clause embedded in the subrecipient contract. For one of sixty subrecipients tested, the Department was unable to locate the subrecipient's signed contract agreement. Cause: The Department could not locate the subrecipient's signed contract agreement containing the suspension and debarment certification clause. Effect: The Department's compliance with federal suspension and debarment requirements could not be confirmed. Recommendation: We recommend that the Department review and update its internal controls to ensure a signed contract agreement containing suspension and debarment terms and conditions is on file for all subrecipients. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT and 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR ? 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the Federal award is being managed in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between federal financial reports and the Department?s supporting records. Questioned Costs: None Context: For both CB-496 reports selected for testing, discrepancies were noted between supporting documentation and the report. For the quarter ending September 30, 2021, some activity was improperly reported as prior quarter adjustments. Additionally, for the quarter ending June 30, 2022, a prior quarter amount was improperly reported as current quarter claims. Cause: The Department did not fully implement the corrective action associated with this finding from the prior year. Effect: The accuracy of the CB-496 reports could not be fully validated. Recommendation: We recommend that the Department continue to review its internal controls to ensure that federal reports are free from error and clearly supported prior to submission. Prior Year Single Audit Finding Number: 2021-014 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 116.

Federal Agency: Department of Health and Human Services Federal Program Title: Child Care and Development Fund (CCDF) Cluster Assistance Listings: 93.575 and 93.596 Federal Grant ID Number: 2001SCCCDD Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR ? 98.60(d)(1) requires that discretionary funds (Assistance Listing 93.575) be obligated by the end of the succeeding fiscal year after the award and expended by the end of the third fiscal year after the award. Condition: Expenditures were incurred after the end of the grant?s period of performance. Questioned Costs: $246,284 Context: For seven of forty expenditure transactions tested, program expenditures were not obligated and expended in accordance with program requirements. Cause: The Department?s internal controls failed to identify and prevent charging costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Recommendation: We recommend that the Department review and update internal controls to ensure all expenditures charged to federal awards are incurred within the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Federal Agency: Department of Health and Human Services Federal Program Titles: Adoption Assistance and Child Care and Development Fund (CCDF) Cluster Assistance Listings: 93.659, 93.575, and 93.596 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR ? 95.509(a) requires that a state promptly submit an amended public assistance cost allocation plan for approval if the procedures shown in the existing cost allocation plan become outdated. Additionally, 2 CFR ? 200.303 requires that the entity establish and maintain effective internal controls over the federal award that provide 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. Condition: Indirect cost allocations were not appropriately supported. Questioned Costs: Unknown Context: For one quarter tested, a substantial change was noted to one of the six allocation plan bases tested. The change was inconsistent with the public assistance cost allocation plan. Additionally, the journal entry for one quarter tested was incorrect due to a clerical error. Cause: For one of the six bases tested, the Department started using a new method to allocate costs; however, approval was not received before implementing the basis change. Additionally, a clerical error resulted in an incorrect allocation percentage for one of two tested quarterly journal entries. Effect: Indirect costs were not claimed in accordance with the approved cost allocation plan. Recommendation: We recommend that the Department regularly review their public assistance cost allocation plan and submit amendments for approval as necessary. Additionally, we recommend consolidating the support documentation for bases with multiple percentages. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Finding 2022-001: Unemployment Insurance Benefit Payments (Material Weakness in Internal Controls) Condition: In March 2020, the President signed the CARES Act that authorized additional funding under the Unemployment Insurance (UI) program. This was followed by additional federal and state funding programs that increased grants available and modified eligibility requirements to support changes in employment status caused by the COVID-19 pandemic. Certain benefits under these programs extended into fiscal year 2022. There was a priority on distributing funds under self-attestation strategy with limited income verification to expedite disbursement of funds and support individuals in greatest need. As a result of this, many states saw a significant increase in fraudulent claims to historical highs. The U.S. Department of Labor and the Agency have partnered to investigate the extent and methods used to perpetrate fraud. For the Agency, eligibility determinations made by the management followed existing policies and procedures for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the policies and procedures in place were not the usual policies and procedures and so they were not adequate to completely prevent fraudulent claims. The Agency’s detective controls did identify abnormal claim activity; however, it was after the claims had already been paid. During our testing of a sample of 60 benefit payments we identified 3 payments that were fraudulent, total value of payments tested was $16,776 and total amount of fraud was $835. The extrapolated fraud amount over the total benefit payments of $179.4 million would be $9 million. Criteria: Per 2 CFR §200 Appendix XI, state responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state unemployment insurance tax structure; (3) collecting state unemployment insurance contributions from employers (commonly called “unemployment taxes”); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program’s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law and that state law and operations substantially comply with federal law. Effect: A lack of adequate internal controls over eligibility determinations may increase the likelihood of fraudulent claims being submitted and incorrectly paid. Known Questioned Costs: During our testing of a sample of 60 benefit payments we identified 3 payments that were fraudulent, the total value of payments tested was $16,776 and total amount of known fraud was $835. Likely Questioned Costs: Based upon the extrapolated fraud amount over the total benefit payment of $179.4 thousand the total amount of fraud would likely be $10 million. Cause: The Agency experienced unprecedented claims volume starting in fiscal 2021 and continuing into fiscal year 2022 with increased funding and additional program requirements with a priority for efficient distribution from both the U.S. Department of Labor and state officials. Recommendation: We recommend that the Agency continue to review, monitor, and enhance eligibility procedures to detect and/or prevent fraudulent claimants from receiving benefits. The Agency should work to enhance and update its assessment of risks related to the eligibility process and implement internal controls to help mitigate future fraudulent claims.

Item 2022-002: Report Submission to the Federal Audit Clearinghouse (Other Matter Required to be Reported Under the Uniform Guidance) (Material Weakness) Condition: The Agency did not prepare and submit its Data Collection Form and Reporting Package for the year ended June 30, 2022 to the Federal Audit Clearinghouse by the due date of March 31, 2023. Criteria: Per §200.512 of the Uniform Guidance, Report Submission, the audit shall be completed and the Data Collection Form and Reporting Package shall be electronically transmitted within the earlier of thirty (30) days after receipt of the auditor’s reports, or nine (9) months after the end of the audit period. If the due date falls on a Saturday, Sunday, or federal holiday, the Data Collection Form and Reporting Package are due the next business day. The Uniform Guidance does not permit the recipient to extend the due date. Cause: Management did not submit their Data Collection Form and Reporting Package by the due date due to an OIG review of the June 30, 2022 year end. Management delayed their reporting due to the completion of the OIG review and key accounting/finance personnel turnover. Effect: The Agency’s Data Collection Form and Reporting Package for the year ended June 30, 2022 was not prepared and submitted to the Federal Audit Clearinghouse by the due date. Recommendation: We recommend that management during times of unexpected increase activity ensure that all appropriate controls are in place to allow timely completion of audit procedures as well as submission of Data Collection Form and Reporting Package to the Federal Audit Clearinghouse.

Item 2022-003: Reporting (Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor (“National Office”) by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th day of the month following the close of the quarter. The ETA 2208A Report is required to be submitted on a quarterly basis to the National Office by the 45th day of the month following the close of the quarter. The ETA 2112 Report is required to be submitted on a monthly basis to the National Office by the first day of the second month following the close of the month of reference. The ETA 9052 Report is required to be submitted on a monthly basis to the National Office by the 30th day of the month following the month of reference. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor’s timelines. The reports were delayed due to program and system resources focused on claims processing as well as personnel shortages. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: Unemployment Insurance – One (1) ETA 191 quarterly report; Unemployment Insurance – Two (2) ETA 2208A quarterly reports; Unemployment Insurance – One (1) ETA 2112 monthly report; Unemployment Insurance – One (1) ETA 9052 monthly report. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster and Children?s Health Insurance Program (CHIP) Assistance Listings: 93.775, 93.777, 93.778, and 93.767 Federal Grant ID Numbers: 05-2105SC5MAP, 05-2205SC5MAP, 05-2105SC5ADM, 05-2205SC5ADM, 05-2105SC5021, and 05-2205SC5021 Pass-Through Entity: Not applicable Award Period: October 01, 2020, through September 30, 2023 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, that the agency must promptly determine eligibility between regular renewals of eligibility. In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulation and policies apply to both programs. Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 42 Medicaid recipients and 58 CHIP recipients. Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to a backlog in case processing. Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements. Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual. Prior Year Single Audit Finding Number: 2021-004 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 102.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster and Children?s Health Insurance Program (CHIP) Assistance Listings: 93.775, 93.777, 93.778, and 93.767 Federal Grant ID Numbers: 05-2205SC5MAP, 05-2205SC5ADM, 05-2105SC5021, and 05-2205SC5021 Pass-Through Entity: Not applicable Award Period: October 01, 2020, through September 30, 2023 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 435.914 (a), the agency must include in each applicant?s case record facts to support the agency?s decision on his or her application. In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), that a State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulations apply to both programs. Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipient eligibility status. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for 3 Medicaid recipients and 3 CHIP recipients. Cause: According to Department personnel, some documentation was not scanned into the electronic case files and maintained in accordance with its State plan. Effect: The Department could not support eligibility determinations in accordance with its State plan. Recommendation: We recommend the Department strengthen controls over eligibility determinations to ensure documentation is maintained and reviewed in accordance with its State plan and federal regulations. Prior Year Single Audit Finding Number: 2021-005 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 103.

Federal Agency: Department of Homeland Security Federal Program Title: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing: 97.036 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: FFATA reporting and timing errors were identified. Questioned Costs: None Context: Fourteen subawards were selected for testing and the following compliance errors were identified during the testing: ? The reported subaward obligation/action date did not agree to the subaward agreement date for one of the subawards tested. ? For seven of the subawards tested, the action was not reported in the FSRS by the last day of the month following the month that the subaward was made. ? The FSRS could not be accessed for four of the subawards in order to test reporting compliance for that subaward. Cause: Data entry errors and administrative delays led to the compliance errors identified in the testing. Effect: The Office was not in compliance with FFATA reporting requirements. Recommendation: We recommend the Office update their current internal control to include continuous monitoring and reviewing of project obligations to ensure that reports are submitted in compliance with FFATA reporting requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 105.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control Criteria: 2 CFR ? 200.303 states that the 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. Condition: Personnel expenditures for three employees were charged to the federal award without documented approval as required by the Office?s internal control procedure. Questioned Costs: None Context: Three of forty payroll transactions tested did not have a corresponding approved State Personnel Action form that documented each employee?s salary and the percentage of their salary covered by the grant program. Cause: Management did not document approval of payroll changes for grant employees to avoid errors in payroll processing. Effect: The Office could incorrectly charge the federal award for personnel costs. Recommendation: We recommend the Office consistently adhere to its internal controls including maintaining the approved State Personnel Action form to support the personnel charges and allocations to applicable funding sources. Prior Year Single Audit Finding Number: Not applicable. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 106.

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing: 14.228 Federal Grant ID Numbers: B20DW450001, B21DC450001, B20DC450001, B19DC450001, and B18DC450001 Pass-Through Entity: Not applicable Award Period: July 24, 2018, through September 1, 2028 Type of Finding: Significant deficiency in internal control over compliance Criteria: Per 2 CFR ? 200.303, the 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Supervisory personnel did not review certain reports prior to submission. Questioned Costs: None Context: We tested the Department?s Consolidated Annual Performance and Evaluation Report (CAPER), which includes the annual Section 3 report, and five Federal Funding Accountability and Transparency Act (FFATA) reports submitted by the Department. None of the FFATA reports were reviewed by supervisory personnel prior to submission. Cause: Department controls failed to ensure that supervisory personnel reviewed the reports prior to submission. Effect: Without supervisory review, there is an increased risk of inaccurate reporting. Recommendation: We recommend that Department personnel consistently follow policies in place to ensure reports are properly reviewed by supervisory personnel prior to submission. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 108.

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing: 14.228 Federal Grant ID Number: B-18-DP-06-0002 Pass-Through Entity: Not applicable Award Period: August 20, 2020, through November 19, 2032 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: We determined expenditure transactions were incorrectly classified in the general ledger. Questioned Costs: None Context: For two of twenty-two transactions tested, the Office classified subrecipient payments as contractual services. Cause: Office controls failed to ensure transactions were recorded properly in the general ledger. Effect: Subrecipient expenditures of $51,853 were omitted from the Office?s Schedule of Federal Awards (SEFA). Recommendation: We recommend that the Office ensure staff preparing and entering transactions into the accounting system have a good working knowledge of account codes as defined by the South Carolina Comptroller General?s Office (CG). In addition, supervisory personnel should closely review transactions to ensure proper classification in the general ledger. Further, the Office should seek guidance from the CG if questions regarding coding of transactions arises. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 109.

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grant Assistance Listing: 14.228 Federal Grant ID Numbers: P-19-SC-45-0DD2 and P-18-SC-45-MIT1 Pass-Through Entity: Not applicable Award Period: December 14, 2020, through August 19, 2032 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A requires that recipients of grants or cooperative agreements report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: We identified noncompliance with FFATA reporting requirements. Questioned Costs: None Context: The Office did not submit FFATA reports although it had subawards of $30,000 or more. Cause: Office personnel were unaware of FFATA reporting requirements. Effect: The Office was not in compliance with FFATA reporting requirements. Recommendation: We recommend that the Office implement procedures to ensure reports are submitted in compliance with FFATA reporting requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements Assistance Listing: 93.268 Federal Grant ID Numbers: 5 NH23IP922601-03-00, 1 N23IP922601-01-00, and 6 NH23IP922601-02-00 Pass-Through Entity: Not applicable Award Period: October 01, 2019, through September 30, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: The Office of Management and Budget?s (OMB) 2022 Compliance Supplement states that effective control and accountability must be maintained for all vaccines under the Vaccines for Children (VFC) program. Vaccines must be adequately safeguarded and used solely for authorized purposes in accordance with guidance set forth in 42 USC 1396s. To comply with this requirement, the Department?s Vaccines for Children Operation Guide requires that all completed VFC compliance site visits be reviewed by the VFC coordinator, immunization program manager, or a designee. Condition: The Department did not consistently perform reviews of compliance visits of vaccine providers in accordance with its policy. Questioned Costs: None Context: We tested 37 compliance visits of providers to ensure the Department complied with applicable Special Tests and Provisions requirements. We determined the Department had not reviewed four of the compliance visits as of the end of our fieldwork. Cause: Due to the prioritization of annual VFC and other vaccine program enrollments, the Department was unable to review the site visits for these providers. Effect: In the absence of a compliance visit review, providers could have unresolved issues that could affect the quality and quantity of vaccines provided to VFC recipients. Recommendation: We recommend the Department ensure compliance visits are reviewed in accordance with Department policy. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 112.

Federal Agency: Department of Health and Human Services and Department of Agriculture Federal Program Titles: Adoption Assistance and Child and Adult Care Food Program Assistance Listings: 93.659 and 10.558 Federal Grant ID Numbers: 2001SCADPT, 2101SCADPT, and 5SC300329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 200.303 requires that the non-federal entity establish and maintain effective internal controls over the federal award that provide 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. Condition: Supporting documentation was not adequate to determine if federal reimbursements were properly reviewed and approved by a supervisor prior to requesting a drawdown as required by the Department?s policies and procedures. Questioned Costs: None Context: For two of five Adoption Assistance drawdowns and one of the five Child and Adult Care Food Program drawdowns selected for testing, supporting documentation was not adequate to demonstrate proper review and approval by a supervisor prior to the federal reimbursement request. Cause: The Department failed to retain documentation demonstrating performance of a supervisory review and approval. Effect: The Department may request improper drawdowns due to a lack of proper approval. Recommendation: We recommend that the Department follow their policies and procedures to ensure that proper documentation is maintained to support the review and approval of a drawdown of funds. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 113.

Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Numbers: 5SC300329 and 5SC308329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 200.332(d) requires that all pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Additionally, 7 CFR ? 226.6(m)(6) outlines the frequency and number of required institution reviews. Condition: The Department did not perform its subrecipient monitoring reviews in accordance with its policies and procedures and federal regulations. Questioned Costs: None Context: For fourteen of the sixty subrecipients tested, subrecipient monitoring reviews were not conducted within the three-year timeframe as set out in federal regulations. Cause: Due to staffing turnover, the Department did not comply with federal subrecipient monitoring requirements. Effect: The Department is not in compliance with federal requirements related to subrecipient monitoring requirements. Recommendation: We recommend that the Department follow its established policies and procedures for the program to ensure compliance with federal subrecipient monitoring requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 114.

Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Numbers: 5SC300329 and 5SC308329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 7 CFR ? 226.6(b)(3) requires that any new or renewing institution applying for participation in the Program be notified in writing of approval or disapproval by the State agency within 30 calendar days of the State agency's receipt of a completed application. Whenever possible, State agencies should provide assistance to institutions that have submitted an incomplete application. Any disapproved applicant institution or family day care home must be notified of the reasons for its disapproval and its right to appeal under paragraph (k) or (l), respectively, of this section. Condition: Documentation was not adequate to verify that applicants were notified in writing of approval or disapproval by the Department within 30 days of receiving a completed application. Questioned Costs: None Context: For eleven of sixty institutions tested, we could not verify if the Department sent an approval or disapproval notification within 30 days of receiving the completed applications. Cause: The Department?s internal controls failed to ensure timely notifications to applicants according to federal regulations. Effect: We could not confirm compliance with federal regulations requiring written notifications of application approval or disapproval within 30 days of receiving a completed application. Recommendation: We recommend that the Department review its internal controls to ensure timely notifications of application approvals and disapprovals. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of Agriculture Federal Program Title: Child and Adult Care Food Program Assistance Listing: 10.558 Federal Grant ID Numbers: 5SC300329 and 5SC308329 Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR ? 180.300 requires that when a non-federal entity enters into a covered transaction (contracts for goods and services that are expected to equal or exceed $25,000, as well as all subawards to subrecipients, irrespective of award amount) with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. The regulation lists several permitted methods for verification, including the collection of a certification from subrecipients. Condition: Compliance with suspension and debarment regulations could not be confirmed for one subrecipient. Questioned Costs: None Context: The Department verifies suspension and debarment through a certification clause embedded in the subrecipient contract. For one of sixty subrecipients tested, the Department was unable to locate the subrecipient's signed contract agreement. Cause: The Department could not locate the subrecipient's signed contract agreement containing the suspension and debarment certification clause. Effect: The Department's compliance with federal suspension and debarment requirements could not be confirmed. Recommendation: We recommend that the Department review and update its internal controls to ensure a signed contract agreement containing suspension and debarment terms and conditions is on file for all subrecipients. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT and 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR ? 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the Federal award is being managed in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between federal financial reports and the Department?s supporting records. Questioned Costs: None Context: For both CB-496 reports selected for testing, discrepancies were noted between supporting documentation and the report. For the quarter ending September 30, 2021, some activity was improperly reported as prior quarter adjustments. Additionally, for the quarter ending June 30, 2022, a prior quarter amount was improperly reported as current quarter claims. Cause: The Department did not fully implement the corrective action associated with this finding from the prior year. Effect: The accuracy of the CB-496 reports could not be fully validated. Recommendation: We recommend that the Department continue to review its internal controls to ensure that federal reports are free from error and clearly supported prior to submission. Prior Year Single Audit Finding Number: 2021-014 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 116.

Federal Agency: Department of Health and Human Services Federal Program Title: Child Care and Development Fund (CCDF) Cluster Assistance Listings: 93.575 and 93.596 Federal Grant ID Number: 2001SCCCDD Pass-Through Entity: Not applicable Award Period: October 1, 2019, through September 30, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR ? 98.60(d)(1) requires that discretionary funds (Assistance Listing 93.575) be obligated by the end of the succeeding fiscal year after the award and expended by the end of the third fiscal year after the award. Condition: Expenditures were incurred after the end of the grant?s period of performance. Questioned Costs: $246,284 Context: For seven of forty expenditure transactions tested, program expenditures were not obligated and expended in accordance with program requirements. Cause: The Department?s internal controls failed to identify and prevent charging costs incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Recommendation: We recommend that the Department review and update internal controls to ensure all expenditures charged to federal awards are incurred within the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Federal Agency: Department of Health and Human Services Federal Program Titles: Adoption Assistance and Child Care and Development Fund (CCDF) Cluster Assistance Listings: 93.659, 93.575, and 93.596 Federal Grant ID Numbers: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR ? 95.509(a) requires that a state promptly submit an amended public assistance cost allocation plan for approval if the procedures shown in the existing cost allocation plan become outdated. Additionally, 2 CFR ? 200.303 requires that the entity establish and maintain effective internal controls over the federal award that provide 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. Condition: Indirect cost allocations were not appropriately supported. Questioned Costs: Unknown Context: For one quarter tested, a substantial change was noted to one of the six allocation plan bases tested. The change was inconsistent with the public assistance cost allocation plan. Additionally, the journal entry for one quarter tested was incorrect due to a clerical error. Cause: For one of the six bases tested, the Department started using a new method to allocate costs; however, approval was not received before implementing the basis change. Additionally, a clerical error resulted in an incorrect allocation percentage for one of two tested quarterly journal entries. Effect: Indirect costs were not claimed in accordance with the approved cost allocation plan. Recommendation: We recommend that the Department regularly review their public assistance cost allocation plan and submit amendments for approval as necessary. Additionally, we recommend consolidating the support documentation for bases with multiple percentages. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Item 2021-001: Reporting (Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor's timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to program and system resources focused on claims processing as well as the difficulty experienced due to the requirement of staff to shelter at home beginning April 2020 under the South Carolina Governor's Executive Order and restricted access to records located in the office. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: Unemployment Insurance - Three (3) ETA 191 quarterly reports of the four (4) reports tested. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Condition: In March 2020, the President signed the CARES Act that authorized additional funding under the Unemployment Insurance (UI) program. This was followed by additional federal and state funding programs that increased grants available and modified eligibility requirements to support changes in employment status caused by the COVID-19 pandemic. Certain benefits under these programs extended into fiscal year 2022. Subsequent to June 30, 2020, supplemental assistance provided by the CARES Act and other federal legislation supported elevated sustained benefit payments through June 2021 in excess of $3.6 billion. South Carolina ended its participation in the supplementary federal programs in June 2021 and has seen benefit payments drop significantly returning to pre-pandemic levels by October 2021. There was a priority on distributing funds under self-attestation strategy with limited income verification to expedite disbursement of funds and support individuals in greatest need. As a result of this, many states saw a significant increase in fraudulent claims to historical highs. The U.S. Department of Labor and the Agency have partnered to investigate the extent and methods used to perpetrate fraud. For the Agency, eligibility determinations made by the management followed existing policies and procedures for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the policies and procedures in place were not the usual policies and procedures and so they were not adequate to completely prevent fraudulent claims. The Agency’s detective controls did identify abnormal claim activity; however, it was after the claims had already been paid. During our testing of a sample of 360 benefit payments we identified 23 payments that were fraudulent, total value of payments tested was $109,375 and total amount of fraud was $7,230. The extrapolated fraud amount over the total benefit payment of $3.757 billion would be $252.9 million. Criteria: Per 2 CFR §200 Appendix XI, state responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state unemployment insurance tax structure; (3) collecting state unemployment insurance contributions from employers (commonly called “unemployment taxes”); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program’s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law and that state law and operations substantially comply with federal law. Effect: A lack of adequate internal controls over eligibility determinations may increase the likelihood of fraudulent claims being submitted and incorrectly paid. Known Questioned Costs: During our testing of a sample of 360 benefit payments we identified 23 payments that were fraudulent, the total value of payments tested was $109,375 and total amount of known fraud was $7,230. Likely Questioned Costs: Based upon the extrapolated fraud amount over the total benefit payment of $3.757 billion the total amount of fraud would likely be $252.9 million. Cause: The Agency experienced unprecedented claims volume during fiscal 2021 with increased funding and additional program requirements with a priority for efficient distribution from both the U.S. Department of Labor and state officials. Recommendation: We recommend that the Agency continue to review, monitor, and enhance eligibility procedures to detect and/or prevent fraudulent claimants from receiving benefits. The Agency should work to enhance and update its assessment of risks related to the eligibility process and implement internal controls to help mitigate future fraudulent claims.

Federal Agency: Department of Justice Federal Program Title: Crime Victim Assistance Assistance Listing: 16.575 Federal Grant ID Number: 2017-VA-GX-4040 Pass-Through Entity: Not applicable Award Period: October 1, 2016 through September 30, 2020 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: A reporting discrepancy was identified on a federal financial report filed by the Office. Questioned Costs: None Context: On one of five SF-425 reports selected for testing, reported recipient share of expenditures did not agree to applicable Office supporting documentation. The Office submitted an amended report to correct the discrepancy identified during the audit. Cause: A portion of recipient share activity was mistakenly excluded from the report and the discrepancy was not detected during the Office?s review and approval process. Effect: Recipient share of expenditures was misstated on a federal financial report. Recommendation: We recommend that the Office strengthen its internal controls and processes to ensure that federal reports are free from error prior to submission. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 96.

Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor (“National Office”) by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: • The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor’s timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to program and system resources focused on claims processing. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: • Unemployment Insurance – Three (3) ETA 191 quarterly reports of four (4) reports tested Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Justice Federal Program Title: Crime Victim Assistance Assistance Listing: 16.575 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.332 (d) describes pass-through entity requirements for reviewing single audit reports of subrecipients, including requirements for follow-up and management decisions on applicable audit findings. 28 CFR 94.106 (b) specifies the pass-through entity frequency requirements for on-site monitoring of subrecipients. Condition: The Office was not in compliance with several subrecipient monitoring requirements. Questioned Costs: None Context: The following discrepancies were encountered during testing of twelve subrecipients selected for testing: Two subrecipient single audit reports were not obtained for review in accordance with federal monitoring requirements. Three subrecipients had single audit findings where documentation was not adequate to demonstrate appropriate follow-up or management decision on the findings. Nine subrecipients did not receive site visits within the timeframe set out in the monitoring plan. Cause: The global pandemic?s impact on staffing and equipment contributed to the Office?s inability to fully comply with certain monitoring requirements. Effect: The Office was not in compliance with certain federal subrecipient monitoring requirements. Recommendation: We recommend that the Office review and strengthen subrecipient monitoring controls and procedures to ensure compliance with all federal subrecipient monitoring requirements. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 96.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP) Assistance Listing No.: 93.775, 93.777, 93.778; 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2018 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, that the agency must promptly determine eligibility between regular renewals of eligibility. In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulation and policies apply to both programs. Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 37 Medicaid recipients and 43 CHIP recipients. Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to a backlog in case processing. Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements. Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual. Prior Year Single Audit Finding Number: 2020-006 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 98.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP) Assistance Listing No.: 93.775, 93.777, 93.778; 93.767 Federal Grant ID Number: 05-2005SC5MAP; 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2018 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 435.914 (a), the agency must include in each applicant?s case record facts to support the agency?s decision on his or her application. In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), that a State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulations apply to both programs. Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for ten Medicaid recipients and five CHIP recipients. Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to worker error. Effect: The Department could not support eligibility determinations in accordance with its State plan. Recommendation: We recommend the Department continue its efforts to maintain documentation to support eligibility determinations in accordance with its State plan and federal regulations. Prior Year Single Audit Finding Number: 2020-004 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 100.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing No.: 93.775, 93.777, 93.778 Federal Grant ID Number: 05-2005SC5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 433.10 (c) (1), under Section 1905 (a) (5) of the Act, the federal share of state expenditures for family planning services is 90 percent. In addition, per the Centers for Medicare & Medicaid Services (CMS) State Medicaid Director Letter 14-003, family planning related services are matched at the states? regular federal medical assistance percentage. Also, per 42 CFR 433.10 (c) (5) (i), under section 1933(d) of the Act, the federal share of state expenditures for Medicare Part B premiums described in section 1905(p)(3)(A)(ii) of the Act on behalf of Qualifying Individuals described in section 1902(a)(10)(E)(iv) of the Act, is 100 percent, to the extent that the assistance does not exceed the state's allocation under paragraph (c)(5)(ii) of this section. To the extent that the assistance exceeds that allocation, the federal share is 0 percent. Condition: The Department did not comply with the federal matching requirement for family planning services, family planning related services, or Part B assistance premium payments. Questioned Costs: None Context: We tested 60 individual claims to ensure the Department complied with matching requirements. We determined the Department did not use the proper Federal Medical Assistance Percentage (FMAP) for all (two) of the family planning related services selected for testing as well as one of the Part B assistance premium payments selected for testing. Cause: Department personnel stated that an improper modifier was used causing sexually transmitted infection testing and treatment services to map to the incorrect internal fund code and FMAP. Also, Department personnel stated, regarding the Part B assistance premium payment, that an incorrect functional area was assigned to the report?s translation table, resulting in the incorrect FMAP being used. Staff realized the error and corrected the translation table to the correct functional area. However, staff failed to follow through to ensure the entry was posted correctly or to process a journal entry in the accounting system to correct the posting. Effect: The Department?s controls did not consistently detect errors identified which could lead to improper payments. Recommendation: We recommend the Department correct the errors in MMIS and strengthen its controls to ensure errors are corrected when identified. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 102.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 438.602 (e), the state must periodically, but no less frequently than once every 3 years, conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). In addition, per 42 CFR 438.602 (g), the state must post on its Web site, as required in 438.10(c)(3), the following documents and reports: (1) The MCO, PIHP, PAHP, or Primary Care Case Management (PCCM) entity contract. (2) The data at 438.604(a)(5). (3) The name and title of individuals included in 438.604(a)(6). (4) The results of any audits under paragraph (e) of this section. Condition: The Department did not conduct, or contract, for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO. Questioned Costs: None Context: We selected all (5) MCOs to ensure the Department complied with Managed Care Financial Audit requirements, but the Department could not provide us with the required periodic audit reports. Cause: Department personnel stated the periodic audits have not been conducted because they, along with the Department?s contracted third-party actuary, analyze the encounter and financial data of the MCO on a quarterly and annual basis at the aggregate level. Effect: The Department did not comply with the Special Tests and Provisions-Managed Care Financial Audit requirement. Recommendation: We recommend the Department ensure required periodic audits are performed. The required reports and documents should then be posted to the Department?s publicly accessible website. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 103.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing No.: 93.775, 93.777, 93.778 Federal Grant ID Number: 05-2005SC5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: The NCCI Policy Manual for Medicaid Services and the Medicaid NCCI Technical Guidance Manual require states to implement the required six NCCI methodologies and NCCI program requirements. Condition: The Department could not provide support that it complied with the implementation of the required six NCCI methodologies and the NCCI program requirements in accordance with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Questioned Costs: None Context: We were unable to process test claims to determine if the Department complied with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Cause: The Department contracts with a third party to implement the required six NCCI methodologies and program requirements. The Department's only monitoring tool over the responsibilities performed by the third party is to review cost savings reports provided by them; the Department does not monitor or perform a test of claims throughout the year. The Department did not provide access to necessary systems or documentation to allow us to test claims to determine compliance. Effect: In the absence of internal controls over the implementation of the Medicaid NCCI methodologies, the Department is unable to ensure that only proper payments of procedures are reimbursed. Recommendation: We recommend the Department implement controls to ensure its third-party contractor has implemented the required six NCCI methodologies and NCCI program requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 104.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 438.8(k)(1), the state, through its contracts, must require each MCO, PIHP, or PAHP to submit a report to the state that includes at least the following information for each MLR reporting year: (iii) Fraud prevention activities as defined in paragraph (e)(4) of this section. Condition: The Department did not ensure reports submitted by managed care organizations (MCO) included all MLR report elements as required by federal regulations. Questioned Costs: None Context: The Department contracts with 5 MCOs. We tested all reports submitted by the MCOs to ensure they contained the required 13 elements and determined the reports did not contain any line item or note regarding fraud prevention activities. Cause: Department personnel stated fraud prevention activities were excluded from the MLR reports due to the private market not yet incorporating fraud prevention activities in the MLR calculation. Effect: The Department did not comply with the Special Tests and Provisions-Medical Loss Ratio requirement. Recommendation: We recommend the Department ensure MLR reports submitted by MCOs comply with federal regulations. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 105.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: State of South Carolina Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant Deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: Non-allowable costs were charged to the grant. Questioned Costs: $6,272 Context: Federal regulations state that non-federal entities may only use payments from the Fund to cover previously unbudgeted costs of necessary expenditures incurred as a result of the COVID-19 public health emergency. One of 71 non-payroll disbursements tested was for the costs of carpet cleaning services. These costs were neither previously unbudgeted nor necessary due to the public health emergency. Cause: The Office's internal controls failed to prevent non allowable activities and costs from being charged to the grant. Effect: The Office was not in compliance with certain federal regulations and applicable allowable costs/activities requirements. Recommendation: We recommend the Office strengthen its internal controls and processes to ensure that all charges to the grant are allowable. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 106.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Material Weakness in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: Fraud was committed by a school district employee. Each school district in the State was a beneficiary of the program and had expenditures funded by the South Carolina Department of Education (the Department). Questioned Costs: $548,391 Context: The procurement office of a beneficiary school district discovered misuse of funds by a school employee who steered the district to contract with companies he created and controlled for the purchase of equipment. The equipment was sold to the school district at a substantial markup. The now former school district employee pled guilty on January 27, 2022, to defrauding the school district. The questioned costs related to the fraud include $130,000 overcharged for cameras, $60,000 related to invoicing for sales tax and $358,391 retained by the former employee failing to pay the camera vendor for the items delivered to the school district. Cause: Department controls failed to prevent the identified misappropriation of funds. Effect: $548,391 of Coronavirus Relief Funds were misappropriated. Recommendation: We recommend the Department strengthen controls to ensure that all costs charged to the grant are allowable. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 107.

Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund ? COVID-19 Assistance Listing No.: 84.425D Federal Grant ID Number: S425D210019 Pass-Through Entity: None Award Period: January 5, 2021 through September 30, 2022 Type of Finding: Significant Deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 170 Appendix A, the action should be reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the obligation was made. Condition: The report was filed after the due date. Questioned Costs: None Context: The action was reported in FSRS on April 14, 2021, but was due no later than the last day of the month following the month in which the obligation was made (February 28, 2021). Cause: Department controls failed to ensure timely report submission. Effect: Noncompliance was noted with FSRS requirements. Recommendation: We recommend the Department strengthen controls to ensure the FFATA report is submitted in FSRS in a timely manner. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 108.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT, 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 45 CFR 75.361 outlines record retention requirements of the non-federal entity pertinent to the federal award. 45 CFR 1356.40(b)(1) requires the adoption assistance agreement be signed and in effect at the time of or prior to the final decree of adoption. 42 U.S.C. 673(c) explains the children with special needs criteria. 42 U.S.C. 675(8)(b) expands eligibility requirements for children over the age of eighteen. Condition: Eligibility related discrepancies were encountered for some subsidy payments. Questioned Costs: $3,321 Context: Sixty payments charged to the program were selected for testing eligibility compliance. Seven of the payments tested contained eligibility discrepancies as follows: Documentation properly supported that the case was ineligible for program subsidy payments (two). Documentation contained information that was not consistent with meeting eligibility requirements (three). Documentation was insufficient to determine eligibility (two). Additionally, three other subsidy payments tested were for children no longer eligible for payment. Cause: Department controls failed to ensure eligibility was properly determined or applied, benefits were terminated timely, and records were appropriately retained. The ongoing global pandemic also limited the Department?s ability to implement corrective action. Effect: The Department did not comply with and/or could not demonstrate compliance with eligibility and allowable costs/cost principles requirements. Recommendation: We recommend that the Department continue to implement corrective action for eligibility file controls. Prior Year Single Audit Report Finding Number: 2020-027 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 109.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT, 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between federal financial reports and the Department?s supporting records. Questioned Costs: None Context: Two CB-496 reports were selected for testing. Discrepancies were noted between supporting documentation and the reports. In Part 1, Section B of both reports, some activity was improperly reported as prior quarter adjustments. Errors were also identified in the Adoption Savings Calculation used in determining the amounts reported in Part 4 of the report. Cause: The Department had not completely implemented the corrective action associated with this finding from the prior year. Effect: The accuracy of the CB-496 reports could not be fully validated. Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission. Prior Year Single Audit Report Finding Number: 2020-028 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 110.

Federal Agency: Department of Agriculture Federal Program Title: Pandemic EBT Food Benefits ? COVID-19 Assistance Listing: 10.542 Federal Grant ID Number: None Pass-Through Entity: Not applicable Award Period: March 16, 2020 through June 11, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.510(b) specifies the reporting requirements for the schedule of expenditures of federal awards (SEFA). Condition: The total awards expended for the program could not be determined or identified on the Department?s SEFA. Questioned Costs: None Context: The expenditure activity of the new program was not tracked in the Department?s accounting system in a manner consistent with other grant programs and therefore was not included on the Department?s SEFA. Cause: Department controls failed to ensure consistent tracking of the program?s expenditure activity in its accounting system and reporting controls did not detect and correct the resulting reporting error on the SEFA submitted for audit. Effect: An audit adjustment was required to correct the Department?s SEFA and some federal reports of the program required revision. Recommendation: We recommend that the Department implement procedures to ensure that all new grant program activity is consistently accounted for in the Department?s accounting system and that SEFA reporting does not exclude any expenditures required by federal reporting requirements. Prior Year Single Audit Report Finding Number: None Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing: 21.019 Federal Grant ID Number: None Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Non-allowable costs were identified in charges to the grant. Questioned Costs: $4,691 Context: Three of the sixty-six expenditure transactions selected for inspection were recorded to the grant twice through two separate accounting transactions. Cause: The Department identified allowable charges and recorded those charges to the grant through adjusting journal entries. The same transaction was mistakenly included in two separate journal entries and the duplication was not detected and corrected through the review and approval of the Department?s journal entries. Effect: The grant could be overcharged for some specific costs. Recommendation: We recommend that the Department review the supporting documentation for the amounts charged to the grant to determine if the grant was overcharged and determine any necessary appropriate resolution for the closed grant program. Prior Year Single Audit Report Finding Number: None Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of Homeland Security Federal Program Title: Hazard Mitigation Grant Program Assistance Listing: 97.039 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A specifies the reporting and timing requirements for Federal Funding Accountability and Transparency Act (FFATA) reporting. Condition: FFATA reporting and timing discrepancies were identified. Questioned Costs: None Context: Seven subawards were selected for testing and the following compliance discrepancies were identified during the testing: The reported subaward obligation/action date did not agree to the subaward agreement date for five subawards tested. The reported subaward Data Universal Numbering System (DUNS) number did not agree to the DUNS number on the subaward for one subaward tested. For the subawards tested, the action was not reported in the Federal Subaward Reporting System (FSRS) by the last day of the month following the month that the subaward was made. The Office was not able to access FSRS for one of the subawards selected in order to test reporting compliance for that subaward. Cause: Data entry errors and administrative delays led to the compliance errors identified in the testing. Effect: Some information was not reported timely or accurately in accordance with the federal requirements. Recommendation: We recommend that the Office strengthen its internal controls over FFATA reporting to ensure that all reporting is timely and accurate in accordance with the federal requirements. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 113.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: National Guard Regulation (NGR) 5-1, Chapter 11-5 requires advance payments be disbursed by the state within forty-five days. Condition: Advanced funds were not expended within the required timeframe to minimize the time elapsing between drawdown and disbursement. Questioned Costs: None Context: From forty drawdown transactions selected for testing, nineteen grants were identified as having unspent advance funds after forty-five days from the date the funds were advanced. Cause: The timeframe for determining and returning excess advance funding exceeded forty-five days. Effect: Advance funding was not spent or returned within forty-five days of receipt as required by federal regulation. Recommendation: We recommend that the Office continue the implementation of corrective action to strengthen its internal controls over advance payments in order to demonstrate compliance with the federal requirements. Prior Year Single Audit Report Finding Number: 2020-19 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 114.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: W912QG-20-2-1001, W912QG-21-2-1001 Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.403(h) requires costs be incurred during the approved budget period. NGR 5-1, Chapter 11-2 requires the obligation of funds within the federal fiscal year or period of federal availability. Per NGR 5-1, Chapter 11-10, if unliquidated claims and undisbursed obligations remain ninety days after the close of the federal fiscal year, the recipient shall provide a detailed listing of uncleared obligations no later than December 31. Condition: Expenditures, which did not meet the applicable requirements, were charged prior to and after the program?s period of performance. Questioned Costs: $521 Context: Forty expenditure transactions were selected for testing from costs recorded during the first period of the program grants. One of the forty transactions tested was for a cost incurred prior to the applicable period of performance. In addition, nine transactions were selected for testing from costs recorded to program grants beyond ninety days after the close of the federal fiscal year. One of the nine transactions tested was not included on the detailed listing of unliquidated claims and undisbursed obligations. Cause: Office controls failed to prevent charging the grant for a cost incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Recommendation: We recommend that the Office continue the implementation of corrective action to strengthen its internal controls to ensure documented compliance with all federal period of performance requirements. Prior Year Single Audit Report Finding Number: 2020-20 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Material weakness in internal control over compliance, other matters Criteria: Per Federal Register Notice Volume 86, Number 10, payments from the Coronavirus Relief Fund (CRF) are not administered as part of a traditional grant program. The provisions of the Uniform Guidance, 2 CFR 200, that are applicable to indirect costs do not apply. Recipients do not apply their indirect cost rates to payments received from the CRF. Additionally, per 2 CFR 200.303, the 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. Condition: Indirect costs were improperly charged to the CRF. Questioned Costs: $4,590,544 Context: While examining expenditure populations to evaluate which costs were direct and material to the CRF, we noted activity charged to general ledger accounts designated for indirect costs. Cause: Department controls failed to prevent the identified noncompliance issue noted above. Effect: The identified indirect costs resulted in noncompliance with federal regulations and applicable allowable activities/costs requirements. Recommendation: We recommend the Department strengthen controls to ensure that all costs charged to the CRF are for allowable grant activities and costs. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Federal Agency: Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ? COVID 19 Assistance Listing No.: 93.323 Federal Grant ID Number: 6 NU50CK000542-01-08 Pass-Through Entity: Not applicable Award Period: August 1, 2019 through July 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303, the 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Discrepancies existed between the federal financial report (FFR) and the Department?s supporting records. Additionally, not all information reported on the FFR was reviewed by an employee other than the report preparer prior to submission. Questioned Costs: None Context: We tested information reported for all four FFR Payment Management System (PMS) document numbers that were required to be submitted for the reporting period ending July 31, 2020, for federal grant number 6 NU50CK000542-01-08. We noted two discrepancies between the FFR associated with PMS document number 19NU50CK000542 (nonprevention and public health funds) and the Department?s supporting records. The federal share of indirect costs was understated by $54,195 because the incorrect indirect cost base amount was transferred from the supporting worksheets to the FFR. Moreover, the federal share of expenditures did not agree to the supporting worksheets by approximately $2,450. Additionally, the FFR component for PMS document number 19NU50CK000542C4 (COVID-19 paycheck protection and Health Care Enhancement Act response activities) was prepared and submitted by the same individual. Cause: Department controls failed to identify and correct discrepancies noted in the federal reports prior to submission. Effect: The FFR amounts did not agree to supporting documentation. Additionally, without a supervisory review, there is an increased risk of inaccurate reporting. Recommendation: We recommend that the Department strengthen policies and procedures to ensure that all information reported on federal reports is accurate and that a segregation of duties exists between report preparers and reviewers. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 118.

Federal Agency: Department of Agriculture Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grant ID Number: 5SC700715 Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2020 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.403(h) states that costs must be incurred during the approved budget period. Condition: An expenditure was incurred after the end of the grant?s period of performance. Questioned Costs: Undetermined Context: For 1 of 40 expenditure transactions tested, program expenditures were incurred subsequent to the end of the grant?s period of performance (September 30, 2020). Cause: The Department?s internal controls failed to identify and prevent expenditures from being charged outside the grant?s period of performance. Effect: The Department may request reimbursement for expenses not incurred within the period of performance. Recommendation: We recommend that the Department strengthen internal controls to ensure all expenditures charged to federal awards are incurred during the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 118.

Item 2021-001: Reporting (Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor's timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to program and system resources focused on claims processing as well as the difficulty experienced due to the requirement of staff to shelter at home beginning April 2020 under the South Carolina Governor's Executive Order and restricted access to records located in the office. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: Unemployment Insurance - Three (3) ETA 191 quarterly reports of the four (4) reports tested. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Condition: In March 2020, the President signed the CARES Act that authorized additional funding under the Unemployment Insurance (UI) program. This was followed by additional federal and state funding programs that increased grants available and modified eligibility requirements to support changes in employment status caused by the COVID-19 pandemic. Certain benefits under these programs extended into fiscal year 2022. Subsequent to June 30, 2020, supplemental assistance provided by the CARES Act and other federal legislation supported elevated sustained benefit payments through June 2021 in excess of $3.6 billion. South Carolina ended its participation in the supplementary federal programs in June 2021 and has seen benefit payments drop significantly returning to pre-pandemic levels by October 2021. There was a priority on distributing funds under self-attestation strategy with limited income verification to expedite disbursement of funds and support individuals in greatest need. As a result of this, many states saw a significant increase in fraudulent claims to historical highs. The U.S. Department of Labor and the Agency have partnered to investigate the extent and methods used to perpetrate fraud. For the Agency, eligibility determinations made by the management followed existing policies and procedures for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the policies and procedures in place were not the usual policies and procedures and so they were not adequate to completely prevent fraudulent claims. The Agency’s detective controls did identify abnormal claim activity; however, it was after the claims had already been paid. During our testing of a sample of 360 benefit payments we identified 23 payments that were fraudulent, total value of payments tested was $109,375 and total amount of fraud was $7,230. The extrapolated fraud amount over the total benefit payment of $3.757 billion would be $252.9 million. Criteria: Per 2 CFR §200 Appendix XI, state responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state unemployment insurance tax structure; (3) collecting state unemployment insurance contributions from employers (commonly called “unemployment taxes”); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program’s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law and that state law and operations substantially comply with federal law. Effect: A lack of adequate internal controls over eligibility determinations may increase the likelihood of fraudulent claims being submitted and incorrectly paid. Known Questioned Costs: During our testing of a sample of 360 benefit payments we identified 23 payments that were fraudulent, the total value of payments tested was $109,375 and total amount of known fraud was $7,230. Likely Questioned Costs: Based upon the extrapolated fraud amount over the total benefit payment of $3.757 billion the total amount of fraud would likely be $252.9 million. Cause: The Agency experienced unprecedented claims volume during fiscal 2021 with increased funding and additional program requirements with a priority for efficient distribution from both the U.S. Department of Labor and state officials. Recommendation: We recommend that the Agency continue to review, monitor, and enhance eligibility procedures to detect and/or prevent fraudulent claimants from receiving benefits. The Agency should work to enhance and update its assessment of risks related to the eligibility process and implement internal controls to help mitigate future fraudulent claims.

Federal Agency: Department of Justice Federal Program Title: Crime Victim Assistance Assistance Listing: 16.575 Federal Grant ID Number: 2017-VA-GX-4040 Pass-Through Entity: Not applicable Award Period: October 1, 2016 through September 30, 2020 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: A reporting discrepancy was identified on a federal financial report filed by the Office. Questioned Costs: None Context: On one of five SF-425 reports selected for testing, reported recipient share of expenditures did not agree to applicable Office supporting documentation. The Office submitted an amended report to correct the discrepancy identified during the audit. Cause: A portion of recipient share activity was mistakenly excluded from the report and the discrepancy was not detected during the Office?s review and approval process. Effect: Recipient share of expenditures was misstated on a federal financial report. Recommendation: We recommend that the Office strengthen its internal controls and processes to ensure that federal reports are free from error prior to submission. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 96.

Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor (“National Office”) by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: • The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor’s timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to program and system resources focused on claims processing. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: • Unemployment Insurance – Three (3) ETA 191 quarterly reports of four (4) reports tested Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Justice Federal Program Title: Crime Victim Assistance Assistance Listing: 16.575 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.332 (d) describes pass-through entity requirements for reviewing single audit reports of subrecipients, including requirements for follow-up and management decisions on applicable audit findings. 28 CFR 94.106 (b) specifies the pass-through entity frequency requirements for on-site monitoring of subrecipients. Condition: The Office was not in compliance with several subrecipient monitoring requirements. Questioned Costs: None Context: The following discrepancies were encountered during testing of twelve subrecipients selected for testing: Two subrecipient single audit reports were not obtained for review in accordance with federal monitoring requirements. Three subrecipients had single audit findings where documentation was not adequate to demonstrate appropriate follow-up or management decision on the findings. Nine subrecipients did not receive site visits within the timeframe set out in the monitoring plan. Cause: The global pandemic?s impact on staffing and equipment contributed to the Office?s inability to fully comply with certain monitoring requirements. Effect: The Office was not in compliance with certain federal subrecipient monitoring requirements. Recommendation: We recommend that the Office review and strengthen subrecipient monitoring controls and procedures to ensure compliance with all federal subrecipient monitoring requirements. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 96.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP) Assistance Listing No.: 93.775, 93.777, 93.778; 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2018 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, that the agency must promptly determine eligibility between regular renewals of eligibility. In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulation and policies apply to both programs. Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 37 Medicaid recipients and 43 CHIP recipients. Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to a backlog in case processing. Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements. Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual. Prior Year Single Audit Finding Number: 2020-006 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 98.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP) Assistance Listing No.: 93.775, 93.777, 93.778; 93.767 Federal Grant ID Number: 05-2005SC5MAP; 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2018 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 435.914 (a), the agency must include in each applicant?s case record facts to support the agency?s decision on his or her application. In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), that a State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulations apply to both programs. Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for ten Medicaid recipients and five CHIP recipients. Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to worker error. Effect: The Department could not support eligibility determinations in accordance with its State plan. Recommendation: We recommend the Department continue its efforts to maintain documentation to support eligibility determinations in accordance with its State plan and federal regulations. Prior Year Single Audit Finding Number: 2020-004 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 100.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing No.: 93.775, 93.777, 93.778 Federal Grant ID Number: 05-2005SC5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 433.10 (c) (1), under Section 1905 (a) (5) of the Act, the federal share of state expenditures for family planning services is 90 percent. In addition, per the Centers for Medicare & Medicaid Services (CMS) State Medicaid Director Letter 14-003, family planning related services are matched at the states? regular federal medical assistance percentage. Also, per 42 CFR 433.10 (c) (5) (i), under section 1933(d) of the Act, the federal share of state expenditures for Medicare Part B premiums described in section 1905(p)(3)(A)(ii) of the Act on behalf of Qualifying Individuals described in section 1902(a)(10)(E)(iv) of the Act, is 100 percent, to the extent that the assistance does not exceed the state's allocation under paragraph (c)(5)(ii) of this section. To the extent that the assistance exceeds that allocation, the federal share is 0 percent. Condition: The Department did not comply with the federal matching requirement for family planning services, family planning related services, or Part B assistance premium payments. Questioned Costs: None Context: We tested 60 individual claims to ensure the Department complied with matching requirements. We determined the Department did not use the proper Federal Medical Assistance Percentage (FMAP) for all (two) of the family planning related services selected for testing as well as one of the Part B assistance premium payments selected for testing. Cause: Department personnel stated that an improper modifier was used causing sexually transmitted infection testing and treatment services to map to the incorrect internal fund code and FMAP. Also, Department personnel stated, regarding the Part B assistance premium payment, that an incorrect functional area was assigned to the report?s translation table, resulting in the incorrect FMAP being used. Staff realized the error and corrected the translation table to the correct functional area. However, staff failed to follow through to ensure the entry was posted correctly or to process a journal entry in the accounting system to correct the posting. Effect: The Department?s controls did not consistently detect errors identified which could lead to improper payments. Recommendation: We recommend the Department correct the errors in MMIS and strengthen its controls to ensure errors are corrected when identified. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 102.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 438.602 (e), the state must periodically, but no less frequently than once every 3 years, conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). In addition, per 42 CFR 438.602 (g), the state must post on its Web site, as required in 438.10(c)(3), the following documents and reports: (1) The MCO, PIHP, PAHP, or Primary Care Case Management (PCCM) entity contract. (2) The data at 438.604(a)(5). (3) The name and title of individuals included in 438.604(a)(6). (4) The results of any audits under paragraph (e) of this section. Condition: The Department did not conduct, or contract, for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO. Questioned Costs: None Context: We selected all (5) MCOs to ensure the Department complied with Managed Care Financial Audit requirements, but the Department could not provide us with the required periodic audit reports. Cause: Department personnel stated the periodic audits have not been conducted because they, along with the Department?s contracted third-party actuary, analyze the encounter and financial data of the MCO on a quarterly and annual basis at the aggregate level. Effect: The Department did not comply with the Special Tests and Provisions-Managed Care Financial Audit requirement. Recommendation: We recommend the Department ensure required periodic audits are performed. The required reports and documents should then be posted to the Department?s publicly accessible website. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 103.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing No.: 93.775, 93.777, 93.778 Federal Grant ID Number: 05-2005SC5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: The NCCI Policy Manual for Medicaid Services and the Medicaid NCCI Technical Guidance Manual require states to implement the required six NCCI methodologies and NCCI program requirements. Condition: The Department could not provide support that it complied with the implementation of the required six NCCI methodologies and the NCCI program requirements in accordance with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Questioned Costs: None Context: We were unable to process test claims to determine if the Department complied with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Cause: The Department contracts with a third party to implement the required six NCCI methodologies and program requirements. The Department's only monitoring tool over the responsibilities performed by the third party is to review cost savings reports provided by them; the Department does not monitor or perform a test of claims throughout the year. The Department did not provide access to necessary systems or documentation to allow us to test claims to determine compliance. Effect: In the absence of internal controls over the implementation of the Medicaid NCCI methodologies, the Department is unable to ensure that only proper payments of procedures are reimbursed. Recommendation: We recommend the Department implement controls to ensure its third-party contractor has implemented the required six NCCI methodologies and NCCI program requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 104.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 438.8(k)(1), the state, through its contracts, must require each MCO, PIHP, or PAHP to submit a report to the state that includes at least the following information for each MLR reporting year: (iii) Fraud prevention activities as defined in paragraph (e)(4) of this section. Condition: The Department did not ensure reports submitted by managed care organizations (MCO) included all MLR report elements as required by federal regulations. Questioned Costs: None Context: The Department contracts with 5 MCOs. We tested all reports submitted by the MCOs to ensure they contained the required 13 elements and determined the reports did not contain any line item or note regarding fraud prevention activities. Cause: Department personnel stated fraud prevention activities were excluded from the MLR reports due to the private market not yet incorporating fraud prevention activities in the MLR calculation. Effect: The Department did not comply with the Special Tests and Provisions-Medical Loss Ratio requirement. Recommendation: We recommend the Department ensure MLR reports submitted by MCOs comply with federal regulations. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 105.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: State of South Carolina Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant Deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: Non-allowable costs were charged to the grant. Questioned Costs: $6,272 Context: Federal regulations state that non-federal entities may only use payments from the Fund to cover previously unbudgeted costs of necessary expenditures incurred as a result of the COVID-19 public health emergency. One of 71 non-payroll disbursements tested was for the costs of carpet cleaning services. These costs were neither previously unbudgeted nor necessary due to the public health emergency. Cause: The Office's internal controls failed to prevent non allowable activities and costs from being charged to the grant. Effect: The Office was not in compliance with certain federal regulations and applicable allowable costs/activities requirements. Recommendation: We recommend the Office strengthen its internal controls and processes to ensure that all charges to the grant are allowable. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 106.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Material Weakness in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: Fraud was committed by a school district employee. Each school district in the State was a beneficiary of the program and had expenditures funded by the South Carolina Department of Education (the Department). Questioned Costs: $548,391 Context: The procurement office of a beneficiary school district discovered misuse of funds by a school employee who steered the district to contract with companies he created and controlled for the purchase of equipment. The equipment was sold to the school district at a substantial markup. The now former school district employee pled guilty on January 27, 2022, to defrauding the school district. The questioned costs related to the fraud include $130,000 overcharged for cameras, $60,000 related to invoicing for sales tax and $358,391 retained by the former employee failing to pay the camera vendor for the items delivered to the school district. Cause: Department controls failed to prevent the identified misappropriation of funds. Effect: $548,391 of Coronavirus Relief Funds were misappropriated. Recommendation: We recommend the Department strengthen controls to ensure that all costs charged to the grant are allowable. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 107.

Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund ? COVID-19 Assistance Listing No.: 84.425D Federal Grant ID Number: S425D210019 Pass-Through Entity: None Award Period: January 5, 2021 through September 30, 2022 Type of Finding: Significant Deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 170 Appendix A, the action should be reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the obligation was made. Condition: The report was filed after the due date. Questioned Costs: None Context: The action was reported in FSRS on April 14, 2021, but was due no later than the last day of the month following the month in which the obligation was made (February 28, 2021). Cause: Department controls failed to ensure timely report submission. Effect: Noncompliance was noted with FSRS requirements. Recommendation: We recommend the Department strengthen controls to ensure the FFATA report is submitted in FSRS in a timely manner. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 108.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT, 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 45 CFR 75.361 outlines record retention requirements of the non-federal entity pertinent to the federal award. 45 CFR 1356.40(b)(1) requires the adoption assistance agreement be signed and in effect at the time of or prior to the final decree of adoption. 42 U.S.C. 673(c) explains the children with special needs criteria. 42 U.S.C. 675(8)(b) expands eligibility requirements for children over the age of eighteen. Condition: Eligibility related discrepancies were encountered for some subsidy payments. Questioned Costs: $3,321 Context: Sixty payments charged to the program were selected for testing eligibility compliance. Seven of the payments tested contained eligibility discrepancies as follows: Documentation properly supported that the case was ineligible for program subsidy payments (two). Documentation contained information that was not consistent with meeting eligibility requirements (three). Documentation was insufficient to determine eligibility (two). Additionally, three other subsidy payments tested were for children no longer eligible for payment. Cause: Department controls failed to ensure eligibility was properly determined or applied, benefits were terminated timely, and records were appropriately retained. The ongoing global pandemic also limited the Department?s ability to implement corrective action. Effect: The Department did not comply with and/or could not demonstrate compliance with eligibility and allowable costs/cost principles requirements. Recommendation: We recommend that the Department continue to implement corrective action for eligibility file controls. Prior Year Single Audit Report Finding Number: 2020-027 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 109.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT, 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between federal financial reports and the Department?s supporting records. Questioned Costs: None Context: Two CB-496 reports were selected for testing. Discrepancies were noted between supporting documentation and the reports. In Part 1, Section B of both reports, some activity was improperly reported as prior quarter adjustments. Errors were also identified in the Adoption Savings Calculation used in determining the amounts reported in Part 4 of the report. Cause: The Department had not completely implemented the corrective action associated with this finding from the prior year. Effect: The accuracy of the CB-496 reports could not be fully validated. Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission. Prior Year Single Audit Report Finding Number: 2020-028 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 110.

Federal Agency: Department of Agriculture Federal Program Title: Pandemic EBT Food Benefits ? COVID-19 Assistance Listing: 10.542 Federal Grant ID Number: None Pass-Through Entity: Not applicable Award Period: March 16, 2020 through June 11, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.510(b) specifies the reporting requirements for the schedule of expenditures of federal awards (SEFA). Condition: The total awards expended for the program could not be determined or identified on the Department?s SEFA. Questioned Costs: None Context: The expenditure activity of the new program was not tracked in the Department?s accounting system in a manner consistent with other grant programs and therefore was not included on the Department?s SEFA. Cause: Department controls failed to ensure consistent tracking of the program?s expenditure activity in its accounting system and reporting controls did not detect and correct the resulting reporting error on the SEFA submitted for audit. Effect: An audit adjustment was required to correct the Department?s SEFA and some federal reports of the program required revision. Recommendation: We recommend that the Department implement procedures to ensure that all new grant program activity is consistently accounted for in the Department?s accounting system and that SEFA reporting does not exclude any expenditures required by federal reporting requirements. Prior Year Single Audit Report Finding Number: None Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing: 21.019 Federal Grant ID Number: None Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Non-allowable costs were identified in charges to the grant. Questioned Costs: $4,691 Context: Three of the sixty-six expenditure transactions selected for inspection were recorded to the grant twice through two separate accounting transactions. Cause: The Department identified allowable charges and recorded those charges to the grant through adjusting journal entries. The same transaction was mistakenly included in two separate journal entries and the duplication was not detected and corrected through the review and approval of the Department?s journal entries. Effect: The grant could be overcharged for some specific costs. Recommendation: We recommend that the Department review the supporting documentation for the amounts charged to the grant to determine if the grant was overcharged and determine any necessary appropriate resolution for the closed grant program. Prior Year Single Audit Report Finding Number: None Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of Homeland Security Federal Program Title: Hazard Mitigation Grant Program Assistance Listing: 97.039 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A specifies the reporting and timing requirements for Federal Funding Accountability and Transparency Act (FFATA) reporting. Condition: FFATA reporting and timing discrepancies were identified. Questioned Costs: None Context: Seven subawards were selected for testing and the following compliance discrepancies were identified during the testing: The reported subaward obligation/action date did not agree to the subaward agreement date for five subawards tested. The reported subaward Data Universal Numbering System (DUNS) number did not agree to the DUNS number on the subaward for one subaward tested. For the subawards tested, the action was not reported in the Federal Subaward Reporting System (FSRS) by the last day of the month following the month that the subaward was made. The Office was not able to access FSRS for one of the subawards selected in order to test reporting compliance for that subaward. Cause: Data entry errors and administrative delays led to the compliance errors identified in the testing. Effect: Some information was not reported timely or accurately in accordance with the federal requirements. Recommendation: We recommend that the Office strengthen its internal controls over FFATA reporting to ensure that all reporting is timely and accurate in accordance with the federal requirements. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 113.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: National Guard Regulation (NGR) 5-1, Chapter 11-5 requires advance payments be disbursed by the state within forty-five days. Condition: Advanced funds were not expended within the required timeframe to minimize the time elapsing between drawdown and disbursement. Questioned Costs: None Context: From forty drawdown transactions selected for testing, nineteen grants were identified as having unspent advance funds after forty-five days from the date the funds were advanced. Cause: The timeframe for determining and returning excess advance funding exceeded forty-five days. Effect: Advance funding was not spent or returned within forty-five days of receipt as required by federal regulation. Recommendation: We recommend that the Office continue the implementation of corrective action to strengthen its internal controls over advance payments in order to demonstrate compliance with the federal requirements. Prior Year Single Audit Report Finding Number: 2020-19 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 114.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: W912QG-20-2-1001, W912QG-21-2-1001 Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.403(h) requires costs be incurred during the approved budget period. NGR 5-1, Chapter 11-2 requires the obligation of funds within the federal fiscal year or period of federal availability. Per NGR 5-1, Chapter 11-10, if unliquidated claims and undisbursed obligations remain ninety days after the close of the federal fiscal year, the recipient shall provide a detailed listing of uncleared obligations no later than December 31. Condition: Expenditures, which did not meet the applicable requirements, were charged prior to and after the program?s period of performance. Questioned Costs: $521 Context: Forty expenditure transactions were selected for testing from costs recorded during the first period of the program grants. One of the forty transactions tested was for a cost incurred prior to the applicable period of performance. In addition, nine transactions were selected for testing from costs recorded to program grants beyond ninety days after the close of the federal fiscal year. One of the nine transactions tested was not included on the detailed listing of unliquidated claims and undisbursed obligations. Cause: Office controls failed to prevent charging the grant for a cost incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Recommendation: We recommend that the Office continue the implementation of corrective action to strengthen its internal controls to ensure documented compliance with all federal period of performance requirements. Prior Year Single Audit Report Finding Number: 2020-20 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Material weakness in internal control over compliance, other matters Criteria: Per Federal Register Notice Volume 86, Number 10, payments from the Coronavirus Relief Fund (CRF) are not administered as part of a traditional grant program. The provisions of the Uniform Guidance, 2 CFR 200, that are applicable to indirect costs do not apply. Recipients do not apply their indirect cost rates to payments received from the CRF. Additionally, per 2 CFR 200.303, the 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. Condition: Indirect costs were improperly charged to the CRF. Questioned Costs: $4,590,544 Context: While examining expenditure populations to evaluate which costs were direct and material to the CRF, we noted activity charged to general ledger accounts designated for indirect costs. Cause: Department controls failed to prevent the identified noncompliance issue noted above. Effect: The identified indirect costs resulted in noncompliance with federal regulations and applicable allowable activities/costs requirements. Recommendation: We recommend the Department strengthen controls to ensure that all costs charged to the CRF are for allowable grant activities and costs. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Federal Agency: Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ? COVID 19 Assistance Listing No.: 93.323 Federal Grant ID Number: 6 NU50CK000542-01-08 Pass-Through Entity: Not applicable Award Period: August 1, 2019 through July 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303, the 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Discrepancies existed between the federal financial report (FFR) and the Department?s supporting records. Additionally, not all information reported on the FFR was reviewed by an employee other than the report preparer prior to submission. Questioned Costs: None Context: We tested information reported for all four FFR Payment Management System (PMS) document numbers that were required to be submitted for the reporting period ending July 31, 2020, for federal grant number 6 NU50CK000542-01-08. We noted two discrepancies between the FFR associated with PMS document number 19NU50CK000542 (nonprevention and public health funds) and the Department?s supporting records. The federal share of indirect costs was understated by $54,195 because the incorrect indirect cost base amount was transferred from the supporting worksheets to the FFR. Moreover, the federal share of expenditures did not agree to the supporting worksheets by approximately $2,450. Additionally, the FFR component for PMS document number 19NU50CK000542C4 (COVID-19 paycheck protection and Health Care Enhancement Act response activities) was prepared and submitted by the same individual. Cause: Department controls failed to identify and correct discrepancies noted in the federal reports prior to submission. Effect: The FFR amounts did not agree to supporting documentation. Additionally, without a supervisory review, there is an increased risk of inaccurate reporting. Recommendation: We recommend that the Department strengthen policies and procedures to ensure that all information reported on federal reports is accurate and that a segregation of duties exists between report preparers and reviewers. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 118.

Federal Agency: Department of Agriculture Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grant ID Number: 5SC700715 Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2020 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.403(h) states that costs must be incurred during the approved budget period. Condition: An expenditure was incurred after the end of the grant?s period of performance. Questioned Costs: Undetermined Context: For 1 of 40 expenditure transactions tested, program expenditures were incurred subsequent to the end of the grant?s period of performance (September 30, 2020). Cause: The Department?s internal controls failed to identify and prevent expenditures from being charged outside the grant?s period of performance. Effect: The Department may request reimbursement for expenses not incurred within the period of performance. Recommendation: We recommend that the Department strengthen internal controls to ensure all expenditures charged to federal awards are incurred during the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 118.

Item 2021-001: Reporting (Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor's timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to program and system resources focused on claims processing as well as the difficulty experienced due to the requirement of staff to shelter at home beginning April 2020 under the South Carolina Governor's Executive Order and restricted access to records located in the office. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: Unemployment Insurance - Three (3) ETA 191 quarterly reports of the four (4) reports tested. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Condition: In March 2020, the President signed the CARES Act that authorized additional funding under the Unemployment Insurance (UI) program. This was followed by additional federal and state funding programs that increased grants available and modified eligibility requirements to support changes in employment status caused by the COVID-19 pandemic. Certain benefits under these programs extended into fiscal year 2022. Subsequent to June 30, 2020, supplemental assistance provided by the CARES Act and other federal legislation supported elevated sustained benefit payments through June 2021 in excess of $3.6 billion. South Carolina ended its participation in the supplementary federal programs in June 2021 and has seen benefit payments drop significantly returning to pre-pandemic levels by October 2021. There was a priority on distributing funds under self-attestation strategy with limited income verification to expedite disbursement of funds and support individuals in greatest need. As a result of this, many states saw a significant increase in fraudulent claims to historical highs. The U.S. Department of Labor and the Agency have partnered to investigate the extent and methods used to perpetrate fraud. For the Agency, eligibility determinations made by the management followed existing policies and procedures for this pandemic funding; however, to meet federal and state expectations regarding the quick payment of federal pandemic benefits, the policies and procedures in place were not the usual policies and procedures and so they were not adequate to completely prevent fraudulent claims. The Agency’s detective controls did identify abnormal claim activity; however, it was after the claims had already been paid. During our testing of a sample of 360 benefit payments we identified 23 payments that were fraudulent, total value of payments tested was $109,375 and total amount of fraud was $7,230. The extrapolated fraud amount over the total benefit payment of $3.757 billion would be $252.9 million. Criteria: Per 2 CFR §200 Appendix XI, state responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state unemployment insurance tax structure; (3) collecting state unemployment insurance contributions from employers (commonly called “unemployment taxes”); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program’s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law and that state law and operations substantially comply with federal law. Effect: A lack of adequate internal controls over eligibility determinations may increase the likelihood of fraudulent claims being submitted and incorrectly paid. Known Questioned Costs: During our testing of a sample of 360 benefit payments we identified 23 payments that were fraudulent, the total value of payments tested was $109,375 and total amount of known fraud was $7,230. Likely Questioned Costs: Based upon the extrapolated fraud amount over the total benefit payment of $3.757 billion the total amount of fraud would likely be $252.9 million. Cause: The Agency experienced unprecedented claims volume during fiscal 2021 with increased funding and additional program requirements with a priority for efficient distribution from both the U.S. Department of Labor and state officials. Recommendation: We recommend that the Agency continue to review, monitor, and enhance eligibility procedures to detect and/or prevent fraudulent claimants from receiving benefits. The Agency should work to enhance and update its assessment of risks related to the eligibility process and implement internal controls to help mitigate future fraudulent claims.

Federal Agency: Department of Justice Federal Program Title: Crime Victim Assistance Assistance Listing: 16.575 Federal Grant ID Number: 2017-VA-GX-4040 Pass-Through Entity: Not applicable Award Period: October 1, 2016 through September 30, 2020 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: A reporting discrepancy was identified on a federal financial report filed by the Office. Questioned Costs: None Context: On one of five SF-425 reports selected for testing, reported recipient share of expenditures did not agree to applicable Office supporting documentation. The Office submitted an amended report to correct the discrepancy identified during the audit. Cause: A portion of recipient share activity was mistakenly excluded from the report and the discrepancy was not detected during the Office?s review and approval process. Effect: Recipient share of expenditures was misstated on a federal financial report. Recommendation: We recommend that the Office strengthen its internal controls and processes to ensure that federal reports are free from error prior to submission. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 96.

Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor (“National Office”) by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB Compliance Supplement: • The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor’s timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to program and system resources focused on claims processing. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exceptions: • Unemployment Insurance – Three (3) ETA 191 quarterly reports of four (4) reports tested Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Justice Federal Program Title: Crime Victim Assistance Assistance Listing: 16.575 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.332 (d) describes pass-through entity requirements for reviewing single audit reports of subrecipients, including requirements for follow-up and management decisions on applicable audit findings. 28 CFR 94.106 (b) specifies the pass-through entity frequency requirements for on-site monitoring of subrecipients. Condition: The Office was not in compliance with several subrecipient monitoring requirements. Questioned Costs: None Context: The following discrepancies were encountered during testing of twelve subrecipients selected for testing: Two subrecipient single audit reports were not obtained for review in accordance with federal monitoring requirements. Three subrecipients had single audit findings where documentation was not adequate to demonstrate appropriate follow-up or management decision on the findings. Nine subrecipients did not receive site visits within the timeframe set out in the monitoring plan. Cause: The global pandemic?s impact on staffing and equipment contributed to the Office?s inability to fully comply with certain monitoring requirements. Effect: The Office was not in compliance with certain federal subrecipient monitoring requirements. Recommendation: We recommend that the Office review and strengthen subrecipient monitoring controls and procedures to ensure compliance with all federal subrecipient monitoring requirements. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 96.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP) Assistance Listing No.: 93.775, 93.777, 93.778; 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2018 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, that the agency must promptly determine eligibility between regular renewals of eligibility. In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulation and policies apply to both programs. Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 37 Medicaid recipients and 43 CHIP recipients. Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to a backlog in case processing. Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements. Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual. Prior Year Single Audit Finding Number: 2020-006 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 98.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP) Assistance Listing No.: 93.775, 93.777, 93.778; 93.767 Federal Grant ID Number: 05-2005SC5MAP; 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2018 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 435.914 (a), the agency must include in each applicant?s case record facts to support the agency?s decision on his or her application. In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), that a State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program. Therefore, the aforementioned regulations apply to both programs. Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses. Questioned Costs: Unknown Context: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department complied with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for ten Medicaid recipients and five CHIP recipients. Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to worker error. Effect: The Department could not support eligibility determinations in accordance with its State plan. Recommendation: We recommend the Department continue its efforts to maintain documentation to support eligibility determinations in accordance with its State plan and federal regulations. Prior Year Single Audit Finding Number: 2020-004 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 100.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing No.: 93.775, 93.777, 93.778 Federal Grant ID Number: 05-2005SC5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 433.10 (c) (1), under Section 1905 (a) (5) of the Act, the federal share of state expenditures for family planning services is 90 percent. In addition, per the Centers for Medicare & Medicaid Services (CMS) State Medicaid Director Letter 14-003, family planning related services are matched at the states? regular federal medical assistance percentage. Also, per 42 CFR 433.10 (c) (5) (i), under section 1933(d) of the Act, the federal share of state expenditures for Medicare Part B premiums described in section 1905(p)(3)(A)(ii) of the Act on behalf of Qualifying Individuals described in section 1902(a)(10)(E)(iv) of the Act, is 100 percent, to the extent that the assistance does not exceed the state's allocation under paragraph (c)(5)(ii) of this section. To the extent that the assistance exceeds that allocation, the federal share is 0 percent. Condition: The Department did not comply with the federal matching requirement for family planning services, family planning related services, or Part B assistance premium payments. Questioned Costs: None Context: We tested 60 individual claims to ensure the Department complied with matching requirements. We determined the Department did not use the proper Federal Medical Assistance Percentage (FMAP) for all (two) of the family planning related services selected for testing as well as one of the Part B assistance premium payments selected for testing. Cause: Department personnel stated that an improper modifier was used causing sexually transmitted infection testing and treatment services to map to the incorrect internal fund code and FMAP. Also, Department personnel stated, regarding the Part B assistance premium payment, that an incorrect functional area was assigned to the report?s translation table, resulting in the incorrect FMAP being used. Staff realized the error and corrected the translation table to the correct functional area. However, staff failed to follow through to ensure the entry was posted correctly or to process a journal entry in the accounting system to correct the posting. Effect: The Department?s controls did not consistently detect errors identified which could lead to improper payments. Recommendation: We recommend the Department correct the errors in MMIS and strengthen its controls to ensure errors are corrected when identified. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 102.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 438.602 (e), the state must periodically, but no less frequently than once every 3 years, conduct, or contract for the conduct of, an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP). In addition, per 42 CFR 438.602 (g), the state must post on its Web site, as required in 438.10(c)(3), the following documents and reports: (1) The MCO, PIHP, PAHP, or Primary Care Case Management (PCCM) entity contract. (2) The data at 438.604(a)(5). (3) The name and title of individuals included in 438.604(a)(6). (4) The results of any audits under paragraph (e) of this section. Condition: The Department did not conduct, or contract, for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO. Questioned Costs: None Context: We selected all (5) MCOs to ensure the Department complied with Managed Care Financial Audit requirements, but the Department could not provide us with the required periodic audit reports. Cause: Department personnel stated the periodic audits have not been conducted because they, along with the Department?s contracted third-party actuary, analyze the encounter and financial data of the MCO on a quarterly and annual basis at the aggregate level. Effect: The Department did not comply with the Special Tests and Provisions-Managed Care Financial Audit requirement. Recommendation: We recommend the Department ensure required periodic audits are performed. The required reports and documents should then be posted to the Department?s publicly accessible website. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 103.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster Assistance Listing No.: 93.775, 93.777, 93.778 Federal Grant ID Number: 05-2005SC5MAP Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: The NCCI Policy Manual for Medicaid Services and the Medicaid NCCI Technical Guidance Manual require states to implement the required six NCCI methodologies and NCCI program requirements. Condition: The Department could not provide support that it complied with the implementation of the required six NCCI methodologies and the NCCI program requirements in accordance with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Questioned Costs: None Context: We were unable to process test claims to determine if the Department complied with the NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual. Cause: The Department contracts with a third party to implement the required six NCCI methodologies and program requirements. The Department's only monitoring tool over the responsibilities performed by the third party is to review cost savings reports provided by them; the Department does not monitor or perform a test of claims throughout the year. The Department did not provide access to necessary systems or documentation to allow us to test claims to determine compliance. Effect: In the absence of internal controls over the implementation of the Medicaid NCCI methodologies, the Department is unable to ensure that only proper payments of procedures are reimbursed. Recommendation: We recommend the Department implement controls to ensure its third-party contractor has implemented the required six NCCI methodologies and NCCI program requirements. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 104.

Federal Agency: Department of Health and Human Services Federal Program Title: Medicaid Cluster; Children?s Health Insurance Program Assistance Listing No.: 93.775, 93.777, 93.778, 93.767 Federal Grant ID Number: 05-2005SC5MAP, 05-1905SC5021 Pass-Through Entity: Not applicable Award Period: October 1, 2020 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 42 CFR 438.8(k)(1), the state, through its contracts, must require each MCO, PIHP, or PAHP to submit a report to the state that includes at least the following information for each MLR reporting year: (iii) Fraud prevention activities as defined in paragraph (e)(4) of this section. Condition: The Department did not ensure reports submitted by managed care organizations (MCO) included all MLR report elements as required by federal regulations. Questioned Costs: None Context: The Department contracts with 5 MCOs. We tested all reports submitted by the MCOs to ensure they contained the required 13 elements and determined the reports did not contain any line item or note regarding fraud prevention activities. Cause: Department personnel stated fraud prevention activities were excluded from the MLR reports due to the private market not yet incorporating fraud prevention activities in the MLR calculation. Effect: The Department did not comply with the Special Tests and Provisions-Medical Loss Ratio requirement. Recommendation: We recommend the Department ensure MLR reports submitted by MCOs comply with federal regulations. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 105.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: State of South Carolina Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant Deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: Non-allowable costs were charged to the grant. Questioned Costs: $6,272 Context: Federal regulations state that non-federal entities may only use payments from the Fund to cover previously unbudgeted costs of necessary expenditures incurred as a result of the COVID-19 public health emergency. One of 71 non-payroll disbursements tested was for the costs of carpet cleaning services. These costs were neither previously unbudgeted nor necessary due to the public health emergency. Cause: The Office's internal controls failed to prevent non allowable activities and costs from being charged to the grant. Effect: The Office was not in compliance with certain federal regulations and applicable allowable costs/activities requirements. Recommendation: We recommend the Office strengthen its internal controls and processes to ensure that all charges to the grant are allowable. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 106.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Material Weakness in internal control over compliance, other matters Criteria: Per 2 CFR 200.303 Internal controls, the non-federal entity must: (a) 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. Condition: Fraud was committed by a school district employee. Each school district in the State was a beneficiary of the program and had expenditures funded by the South Carolina Department of Education (the Department). Questioned Costs: $548,391 Context: The procurement office of a beneficiary school district discovered misuse of funds by a school employee who steered the district to contract with companies he created and controlled for the purchase of equipment. The equipment was sold to the school district at a substantial markup. The now former school district employee pled guilty on January 27, 2022, to defrauding the school district. The questioned costs related to the fraud include $130,000 overcharged for cameras, $60,000 related to invoicing for sales tax and $358,391 retained by the former employee failing to pay the camera vendor for the items delivered to the school district. Cause: Department controls failed to prevent the identified misappropriation of funds. Effect: $548,391 of Coronavirus Relief Funds were misappropriated. Recommendation: We recommend the Department strengthen controls to ensure that all costs charged to the grant are allowable. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 107.

Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund ? COVID-19 Assistance Listing No.: 84.425D Federal Grant ID Number: S425D210019 Pass-Through Entity: None Award Period: January 5, 2021 through September 30, 2022 Type of Finding: Significant Deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 170 Appendix A, the action should be reported in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the obligation was made. Condition: The report was filed after the due date. Questioned Costs: None Context: The action was reported in FSRS on April 14, 2021, but was due no later than the last day of the month following the month in which the obligation was made (February 28, 2021). Cause: Department controls failed to ensure timely report submission. Effect: Noncompliance was noted with FSRS requirements. Recommendation: We recommend the Department strengthen controls to ensure the FFATA report is submitted in FSRS in a timely manner. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 108.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT, 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 45 CFR 75.361 outlines record retention requirements of the non-federal entity pertinent to the federal award. 45 CFR 1356.40(b)(1) requires the adoption assistance agreement be signed and in effect at the time of or prior to the final decree of adoption. 42 U.S.C. 673(c) explains the children with special needs criteria. 42 U.S.C. 675(8)(b) expands eligibility requirements for children over the age of eighteen. Condition: Eligibility related discrepancies were encountered for some subsidy payments. Questioned Costs: $3,321 Context: Sixty payments charged to the program were selected for testing eligibility compliance. Seven of the payments tested contained eligibility discrepancies as follows: Documentation properly supported that the case was ineligible for program subsidy payments (two). Documentation contained information that was not consistent with meeting eligibility requirements (three). Documentation was insufficient to determine eligibility (two). Additionally, three other subsidy payments tested were for children no longer eligible for payment. Cause: Department controls failed to ensure eligibility was properly determined or applied, benefits were terminated timely, and records were appropriately retained. The ongoing global pandemic also limited the Department?s ability to implement corrective action. Effect: The Department did not comply with and/or could not demonstrate compliance with eligibility and allowable costs/cost principles requirements. Recommendation: We recommend that the Department continue to implement corrective action for eligibility file controls. Prior Year Single Audit Report Finding Number: 2020-027 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 109.

Federal Agency: Department of Health and Human Services Federal Program Title: Adoption Assistance Assistance Listing: 93.659 Federal Grant ID Number: 2001SCADPT, 2101SCADPT Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 45 CFR 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Discrepancies existed between federal financial reports and the Department?s supporting records. Questioned Costs: None Context: Two CB-496 reports were selected for testing. Discrepancies were noted between supporting documentation and the reports. In Part 1, Section B of both reports, some activity was improperly reported as prior quarter adjustments. Errors were also identified in the Adoption Savings Calculation used in determining the amounts reported in Part 4 of the report. Cause: The Department had not completely implemented the corrective action associated with this finding from the prior year. Effect: The accuracy of the CB-496 reports could not be fully validated. Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission. Prior Year Single Audit Report Finding Number: 2020-028 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 110.

Federal Agency: Department of Agriculture Federal Program Title: Pandemic EBT Food Benefits ? COVID-19 Assistance Listing: 10.542 Federal Grant ID Number: None Pass-Through Entity: Not applicable Award Period: March 16, 2020 through June 11, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: 2 CFR 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.510(b) specifies the reporting requirements for the schedule of expenditures of federal awards (SEFA). Condition: The total awards expended for the program could not be determined or identified on the Department?s SEFA. Questioned Costs: None Context: The expenditure activity of the new program was not tracked in the Department?s accounting system in a manner consistent with other grant programs and therefore was not included on the Department?s SEFA. Cause: Department controls failed to ensure consistent tracking of the program?s expenditure activity in its accounting system and reporting controls did not detect and correct the resulting reporting error on the SEFA submitted for audit. Effect: An audit adjustment was required to correct the Department?s SEFA and some federal reports of the program required revision. Recommendation: We recommend that the Department implement procedures to ensure that all new grant program activity is consistently accounted for in the Department?s accounting system and that SEFA reporting does not exclude any expenditures required by federal reporting requirements. Prior Year Single Audit Report Finding Number: None Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing: 21.019 Federal Grant ID Number: None Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Non-allowable costs were identified in charges to the grant. Questioned Costs: $4,691 Context: Three of the sixty-six expenditure transactions selected for inspection were recorded to the grant twice through two separate accounting transactions. Cause: The Department identified allowable charges and recorded those charges to the grant through adjusting journal entries. The same transaction was mistakenly included in two separate journal entries and the duplication was not detected and corrected through the review and approval of the Department?s journal entries. Effect: The grant could be overcharged for some specific costs. Recommendation: We recommend that the Department review the supporting documentation for the amounts charged to the grant to determine if the grant was overcharged and determine any necessary appropriate resolution for the closed grant program. Prior Year Single Audit Report Finding Number: None Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 111.

Federal Agency: Department of Homeland Security Federal Program Title: Hazard Mitigation Grant Program Assistance Listing: 97.039 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 170 Appendix A specifies the reporting and timing requirements for Federal Funding Accountability and Transparency Act (FFATA) reporting. Condition: FFATA reporting and timing discrepancies were identified. Questioned Costs: None Context: Seven subawards were selected for testing and the following compliance discrepancies were identified during the testing: The reported subaward obligation/action date did not agree to the subaward agreement date for five subawards tested. The reported subaward Data Universal Numbering System (DUNS) number did not agree to the DUNS number on the subaward for one subaward tested. For the subawards tested, the action was not reported in the Federal Subaward Reporting System (FSRS) by the last day of the month following the month that the subaward was made. The Office was not able to access FSRS for one of the subawards selected in order to test reporting compliance for that subaward. Cause: Data entry errors and administrative delays led to the compliance errors identified in the testing. Effect: Some information was not reported timely or accurately in accordance with the federal requirements. Recommendation: We recommend that the Office strengthen its internal controls over FFATA reporting to ensure that all reporting is timely and accurate in accordance with the federal requirements. Prior Year Single Audit Report Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 113.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: Various Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Material weakness in internal control over compliance, material noncompliance Criteria: National Guard Regulation (NGR) 5-1, Chapter 11-5 requires advance payments be disbursed by the state within forty-five days. Condition: Advanced funds were not expended within the required timeframe to minimize the time elapsing between drawdown and disbursement. Questioned Costs: None Context: From forty drawdown transactions selected for testing, nineteen grants were identified as having unspent advance funds after forty-five days from the date the funds were advanced. Cause: The timeframe for determining and returning excess advance funding exceeded forty-five days. Effect: Advance funding was not spent or returned within forty-five days of receipt as required by federal regulation. Recommendation: We recommend that the Office continue the implementation of corrective action to strengthen its internal controls over advance payments in order to demonstrate compliance with the federal requirements. Prior Year Single Audit Report Finding Number: 2020-19 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 114.

Federal Agency: Department of Defense Federal Program Title: National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing: 12.401 Federal Grant ID Number: W912QG-20-2-1001, W912QG-21-2-1001 Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2021 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.403(h) requires costs be incurred during the approved budget period. NGR 5-1, Chapter 11-2 requires the obligation of funds within the federal fiscal year or period of federal availability. Per NGR 5-1, Chapter 11-10, if unliquidated claims and undisbursed obligations remain ninety days after the close of the federal fiscal year, the recipient shall provide a detailed listing of uncleared obligations no later than December 31. Condition: Expenditures, which did not meet the applicable requirements, were charged prior to and after the program?s period of performance. Questioned Costs: $521 Context: Forty expenditure transactions were selected for testing from costs recorded during the first period of the program grants. One of the forty transactions tested was for a cost incurred prior to the applicable period of performance. In addition, nine transactions were selected for testing from costs recorded to program grants beyond ninety days after the close of the federal fiscal year. One of the nine transactions tested was not included on the detailed listing of unliquidated claims and undisbursed obligations. Cause: Office controls failed to prevent charging the grant for a cost incurred outside the applicable period of performance. Effect: Costs charged outside the period of performance may not be allowable. Recommendation: We recommend that the Office continue the implementation of corrective action to strengthen its internal controls to ensure documented compliance with all federal period of performance requirements. Prior Year Single Audit Report Finding Number: 2020-20 Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 115.

Federal Agency: Department of the Treasury Federal Program Title: Coronavirus Relief Fund ? COVID-19 Assistance Listing No.: 21.019 Federal Grant ID Number: None provided Pass-Through Entity: South Carolina Department of Administration Award Period: March 1, 2020 through December 31, 2021 Type of Finding: Material weakness in internal control over compliance, other matters Criteria: Per Federal Register Notice Volume 86, Number 10, payments from the Coronavirus Relief Fund (CRF) are not administered as part of a traditional grant program. The provisions of the Uniform Guidance, 2 CFR 200, that are applicable to indirect costs do not apply. Recipients do not apply their indirect cost rates to payments received from the CRF. Additionally, per 2 CFR 200.303, the 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. Condition: Indirect costs were improperly charged to the CRF. Questioned Costs: $4,590,544 Context: While examining expenditure populations to evaluate which costs were direct and material to the CRF, we noted activity charged to general ledger accounts designated for indirect costs. Cause: Department controls failed to prevent the identified noncompliance issue noted above. Effect: The identified indirect costs resulted in noncompliance with federal regulations and applicable allowable activities/costs requirements. Recommendation: We recommend the Department strengthen controls to ensure that all costs charged to the CRF are for allowable grant activities and costs. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 117.

Federal Agency: Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ? COVID 19 Assistance Listing No.: 93.323 Federal Grant ID Number: 6 NU50CK000542-01-08 Pass-Through Entity: Not applicable Award Period: August 1, 2019 through July 31, 2024 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: Per 2 CFR 200.303, the 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Discrepancies existed between the federal financial report (FFR) and the Department?s supporting records. Additionally, not all information reported on the FFR was reviewed by an employee other than the report preparer prior to submission. Questioned Costs: None Context: We tested information reported for all four FFR Payment Management System (PMS) document numbers that were required to be submitted for the reporting period ending July 31, 2020, for federal grant number 6 NU50CK000542-01-08. We noted two discrepancies between the FFR associated with PMS document number 19NU50CK000542 (nonprevention and public health funds) and the Department?s supporting records. The federal share of indirect costs was understated by $54,195 because the incorrect indirect cost base amount was transferred from the supporting worksheets to the FFR. Moreover, the federal share of expenditures did not agree to the supporting worksheets by approximately $2,450. Additionally, the FFR component for PMS document number 19NU50CK000542C4 (COVID-19 paycheck protection and Health Care Enhancement Act response activities) was prepared and submitted by the same individual. Cause: Department controls failed to identify and correct discrepancies noted in the federal reports prior to submission. Effect: The FFR amounts did not agree to supporting documentation. Additionally, without a supervisory review, there is an increased risk of inaccurate reporting. Recommendation: We recommend that the Department strengthen policies and procedures to ensure that all information reported on federal reports is accurate and that a segregation of duties exists between report preparers and reviewers. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 118.

Federal Agency: Department of Agriculture Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grant ID Number: 5SC700715 Pass-Through Entity: Not applicable Award Period: October 1, 2019 through September 30, 2020 Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR 200.403(h) states that costs must be incurred during the approved budget period. Condition: An expenditure was incurred after the end of the grant?s period of performance. Questioned Costs: Undetermined Context: For 1 of 40 expenditure transactions tested, program expenditures were incurred subsequent to the end of the grant?s period of performance (September 30, 2020). Cause: The Department?s internal controls failed to identify and prevent expenditures from being charged outside the grant?s period of performance. Effect: The Department may request reimbursement for expenses not incurred within the period of performance. Recommendation: We recommend that the Department strengthen internal controls to ensure all expenditures charged to federal awards are incurred during the grant's period of performance. Prior Year Single Audit Finding Number: Not applicable Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 118.

Item 2020-001: Report Submission to the Federal Audit Clearinghouse (Other Matter Required to be Reported Under the Uniform Guidance) (Material Weakness) Condition: The agency did not prepare and submit its Data Collection Form and Reporting Package for the year ended June 30, 2020 to the Federal Audit Clearinghouse by the extended due date of September 30, 2021. Criteria: Per 200.512 of the Uniform Guidance, Report Submission, the audit shall be completed and the Data Collection Form and Reporting Package shall be electronically transmitted within the earlier of thirty (30) days after receipt of the auditor's reports, or nine (9) months after the end of the audit period. If the due date falls on a Saturday, Sunday, or federal holiday, the Data Collection Form and Reporting Package are due the next business day. The Uniform Guidance does not permit the recipient to extend the due date. Cause: Management did not review subsidiary ledgers for accuracy and reconcile them to the general ledger on a timely basis. Accordingly, the Agency's general ledger for the year ended June 30, 2019 was not closed out in a timely manner. Effect: The Agency's Data Collection Form and Reporting Package for the year ended June 30, 2020 was not prepared and submitted to the Federal Audit Clearinghouse by the due date. Recommendation: We recommend that management implement monthly financial reporting and closeout processes so that the financial closeout process can be performed timely.

Item 2020-002: Reporting (Material Weakness over Reporting and Non-Material Noncompliance). Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in the accordance with the United States Department of Labor's timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to the program and system resources focused on claims processing as well as the difficulty experienced due to the requirement of staff to shelter at home beginning April 2020 under the South Carolina Governor's Executive Order and restricted access to records located in the office. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exception: Unemployment Insurance - One(1) ETA 191 quarterly report. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid ClusterAssistance Listing: 93.775, 93.777, 93.778Federal Grant ID Number: 05-1905SC5MAP, 05-2005SC5MAPPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 42 CFR 433.12 (c), the State is required to credit the Medicaid program for ??overpayments made to Medicaid providers?? In addition, Title 45 Section 2500.6 B of the Centers for Medicare & Medicaid Services? (CMS) State Medicaid Manual states to ??determine the date or period of the expenditure for which the refund is made to establish the [Federal Medical Assistance Percentage] at which the original expenditure was matched by the federal government. Make refunds of the federal share at the FMAP for which you were reimbursed.?Condition: The Department did not remit the federal share of recoveries and collections to the Medicaid program in accordance with federal regulations and the State Medicaid Manual.Questioned Costs: UnknownContext: We tested 60 receivables to ensure the Department properly credited the Medicaid program for the federal share of identified overpayments. For three receivables tested, the Department used the incorrect federal medical assistance percentage to calculate the federal share which resulted in an underpayment of $288 to the federal grantor.This is a repeat finding from the FY19 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY20, this issue has not been fully corrected.Cause: Department personnel used the incorrect period of overpayment calculating and remitting the refunds due to human error.Effect: The Department?s control procedures did not detect the errors identified in our testing which could lead to further improper remittances.Recommendation: We recommend the Department continue its efforts to strengthen controls to ensure the federal share of recoveries and collections are remitted in accordance with applicable federal and State requirements.Prior Year Single Audit Finding Number: 2019-003Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 132.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)Assistance Listing: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1905SC5MAP, 05-2005SC5MAP; 05-1805SC5021Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 CFR 435.914 (a) states, ?The agency must include in each applicant?s case record facts to support the agency?s decision on his application.? In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), which states, ?A State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan.? Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulations apply to both programs.Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses.Questioned Costs: UnknownContext: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for six Medicaid recipients and three CHIP recipients.Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to worker error.Effect: The Department could not support eligibility determinations in accordance with its State plan.Recommendation: We recommend the Department continue its efforts to maintain documentation to support eligibility determinations in accordance with its State plan and federal regulations.Prior Year Single Audit Finding Number: 2019-005Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 133.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Children?s Health Insurance Program (CHIP)Assistance Listing: 93.767Federal Grant ID Number: 05-1805SC5021Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Section 4.32 of the Department?s Title XIX (Medicaid) State Plan (Income and Eligibility Verification System) affirms that it meets the requirements outlined in 42 CFR 435.930 (b), which states in part, ?The agency must?continue to furnish Medicaid regularly to all eligible individuals until they are found to be ineligible.? In addition, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation applies to both programs.Condition: The Department did not consistently discontinue the benefits of ineligible recipients.Questioned Costs: $5,851Context: We tested 60 individual recipients to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not discontinue the benefits of three recipients on the dates they became ineligible.Cause: Department personnel stated the closure process for these recipients ultimately was not completed due to their interpretation of the Families First Coronavirus Response Act.Effect: The Department was not in compliance with applicable eligibility requirements. In addition, payments were made on behalf of ineligible recipients.Recommendation: We recommend the Department discontinue the benefits of ineligible recipients in accordance with its State plan and federal regulations.Prior Year Single Audit Finding Number: 2019-006Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 135.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)Assistance Listing: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1905SC5MAP, 05-2005SC5MAP, 05-1805SC5021, 05-1905SC5022Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, ?the agency must promptly determine eligibility between regular renewals of eligibility.? In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation and polices apply to both programs.Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual.Questioned Costs: UnknownContext: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 22 Medicaid recipients and 21 CHIP recipients.Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to backlog in case processing.Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements.Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual.Prior Year Single Audit Finding Number: 2019-007Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 138.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterAssistance Listing: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 1321.11 directs the State agency to develop policies to address the manner in which it will monitor the performance of all programs and activities for quality and effectiveness.Condition: The Department failed to comply with its policies for monitoring the programs and activities of its subrecipients.Questioned Costs: UnknownContext: Our test of subrecipients indicated progress had been made with the implementation of corrective action to address this finding reported in the prior year. However, the annual onsite visits and monitoring required by Department policy were not fully completed for the five subrecipients selected for testing.Cause: The Department?s ability to perform onsite visits and monitoring of subrecipients was constrained significantly by the global pandemic.Effect: Subrecipient programs and activities were not monitored in accordance with Department policies and federal requirements.Recommendation: We recommend that the Department continue to implement policies and procedures to facilitate compliance with Department and federal monitoring requirements.Prior Year Single Audit Report Finding Number: 2019-025Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 142.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterAssistance Listing: 93.044, 93.045, 93.053Federal Grant ID: 17AASCT3SS, 17AASCT3CM, 17AASCT3HDPass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Matching requirements of the program are mandated by 45 CFR ? 1321.47 as follows: The statewide non-federal share for State or area plan administration must not be less than 25 percent of the funds used under this part. All services statewide, including ombudsman services and services funded under Title III-B, C, D, E and F, must be funded on a statewide basis with a non-federal share of not less than 15 percent. Matching requirements for individual area agencies are determined by the State agency.Condition: Discrepancies existed between non-federal share amounts reported to meet matching requirements and the supporting accounting records.Questioned Costs: UnknownContext: The 2017 Title III-B and C grants, which closed during the audit period, were selected for detailed testing. While the total recipient share of expenditures reported for each grant met or exceeded the total share required, in comparison to the accounting system, the non-federal share amounts reported were overstated for administration and understated for services. These classification discrepancies totaled several hundred thousand dollars across all three Title III-B and C grants.Cause: The Department chose to reclassify some non-federal services expenditures recorded in the accounting system as non-federal administration expenditures on the federal report.Effect: The Department?s accounting system does not support the amounts reported for non-federal administration and services expenditures. The risk of noncompliance is greater when classification discrepancies exist between amounts reported and the Department?s accounting system.Recommendation: We recommend that policies and procedures are put in place to ensure that non-federal share reported for each matching requirement is supported by and agrees to the Department?s accounting system.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 142.

Federal Agency: US Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing: 84.027 and 84.173Federal Grant ID Number: H027A170081Pass-Through Entity: Not applicableAward Period: July 01, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.303 Internal controls, the non-federal entity must: (a) 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 award. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: An expenditure was posted to the incorrect fiscal year.Questioned Costs: NoneContext: One of thirty-two expenditures was posted to the incorrect fiscal year without being marked as a prior period expenditure.Cause: The Department's internal controls failed to detect an expenditure posted to the incorrect fiscal year.Effect: Expenditure reported incorrectly.Recommendation: We recommend that the Department strengthen internal controls regarding expenditure approval to ensure that expenditures are posted to the correct fiscal year.Prior Year Single Audit Finding Number: Not ApplicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 144.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180060Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: For costs to be allowable under federal awards, 2 CFR 200.403(c) requires that applicable policies and procedures must be applied uniformly to both federally-financed and other activities of the non-federal entity.Additionally, 2 CFR 200.313(b) requires a State to use, manage and dispose of equipment acquired under a federal award in accordance with State laws and procedures.Finally, the State of South Carolina Comptroller General?s Reporting Policies and Procedures Manual describes how equipment should be tracked for the purpose of ensuring compliance with the annual inventory requirements mandated by Section 10-1-140 of the South Carolina Code of Laws.Condition: Equipment was purchased and not managed in accordance with certain State procedures.Questioned Costs: UndeterminedContext: One of the disbursement transactions selected for testing included a preapproved purchase of numerous equipment items, some of which were not tracked by the Department in accordance with State policy. The amount of the equipment purchase that should have been tracked was not determined in our testing.Cause: Department controls failed to identify the purchase as equipment.Effect: Federally funded equipment was not tracked in accordance with State policy.Recommendation: We recommend that the Department implement procedures to ensure any equipment purchased with federal funding is managed in accordance with State requirements.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 146.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180061Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 29 USC 730(d)(1) requires States to reserve no less than fifteen percent of the allotted funds to be spent for the provision of pre-employment transition services.Condition: The Commission was not in compliance with the pre-employment transition services earmarking requirement.Questioned Costs: NoneContext: Testing of the one grant that closed during the audit period revealed that the amount charged to the grant for pre-employment transition services did not meet the fifteen percent requirement.Cause: Commission controls failed to ensure that the earmarking requirement was met prior to finalizing the grant.Effect: The Commission was not in compliance with the federal earmarking requirement.Recommendation: We recommend that the Commission implement procedures to ensure that spending requirements for pre-employment transition services are met before the grant is closed.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 34 CFR ?361.47 requires States to maintain a case record for each applicant and eligible individual that must include documentation to support eligibility determinations, development of an individualized plan for employment, services provided, and case closure. Much of the information contained in these case records is reported as key data elements in the Case Service Report (RSA-911).Condition: Key data elements reported on the Commission's RSA-911 performance reports did not agree with underlying case records.Questioned Costs: NoneContext: Two quarterly RSA-911 reports were selected for testing and the key data elements of twenty individuals were tested from each report. Discrepancies were noted for one application date, one eligibility determination date, three IPE dates, and one hourly rate at exit.Cause: Commission controls failed to identify and correct the discrepancies noted in the RSA-911 reports prior to submission, and subsequent corrections were not possible through the RSA-911 reporting process.Effect: Some of the data fields reported in the RSA-911 are inconsistent with the applicable supporting records.Recommendation: We recommend that the Commission continue implementation of the associated corrective action plan.Prior Year Single Audit Finding Number: 2019-028Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 34 CFR ?361.40(a)(2), the designated State agency must comply with any requirements necessary to ensure the accuracy and verification of reports.Condition: Discrepancies existed between federal financial reports and the Commission?s supporting records.Questioned Costs: NoneContext: The 2019 RSA-2 Annual Vocational Rehabilitation Program/Cost Report and the final SF-425 report for the 2018 grant were selected for testing. Several of the items reported in Schedules I and III of the RSA-2 report did not agree to the Commission?s supporting records. Additionally, the indirect expense base amount in the SF-425 report was not adequately supported by Commission documentation.Cause: Some of the original supporting data for the RSA-2 report was corrupted in a data loss event and the Commission was unable to reconstruct the lost data in the level of detail necessary to fully support the report. Staffing shortages and turnover also contributed to the discrepancies.Effect: Some reported information could not be verified.Recommendation: We recommend that the Commission develop and implement policies and procedures that ensure the security of all data compiled to support federal reports.Prior Year Single Audit Finding Number: 2019-029Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 148.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR ?200.303 requires non-federal entities to establish and maintain effective internal controls that ensure material compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Condition: Cash management compliance was not documented for some drawdowns.Questioned Costs: UnknownContext: For two of three drawdowns tested, adequate documentation was not maintained to support the amount of the drawdown.Cause: The Commission had not completely implemented the corrective action associated with the finding from the prior year.Effect: The Commission may drawdown funds in excess of eligible reimbursable expenditures.Recommendation: We recommend that the Commission continue implementing the corrective action plan and strengthen the associated controls to ensure compliance is clearly documented.Prior Year Single Audit Finding Number: 2019-030Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 148.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR ? 200.430 (a) states that the costs of compensation are allowable to the extent that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities.Condition: The allocation of some compensation costs was inadequately supported or improperly applied.Questioned Costs: UnknownContext: Forty payroll disbursements were randomly selected for testing and discrepancies associated with allocation of compensation to multiple grants were identified for six employees in the test. For four of the employees, the Commission used an outdated percentage to allocate costs. For the other two employees, adequate documentation was not maintained to substantiate the allocation.Cause: Commission controls failed to prevent the identified issues, but staffing shortages and turnover during the audit period were also contributing factors.Effect: The Commission may overcharge the grant for personnel cost.Recommendation: We recommend that the Commission implement procedures which will provide assurance that personnel charges are accurate, allowable, and properly allocated to applicable grants.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR ?200.303 requires non-federal entities to establish and maintain effective internal controls that ensure material compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Condition: The Commission?s internal control procedures for disbursements were not documented consistently and an overpayment was noted for one non-payroll disbursement tested.Questioned Costs: $64Context: While compensating controls were identified, there was inadequate evidence of proper approval for thirty of the eighty-one non-payroll disbursements selected for testing. For one of these payments, it was also noted that the amount paid exceeded the maximum amount allowed by Commission policy.Cause: The Commission failed to retain documentation demonstrating performance of their internal control process, established during a period of staffing shortages and turnover.Effect: The Commission did not maintain adequate documentation to demonstrate compliance with its own control procedures.Recommendation: We recommend that the Commission properly document all control procedures.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-20-2-1001, W912QG-20-2-1021Pass-Through Entity: Not applicableAward Period: October 1, 2019 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.430 (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with a non-federal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.Condition: Funding information on agency approved Personnel Action Form did not agree to selected SCEIS Remuneration Statement and SCEIS Labor Distribution Report data. Additionally, excess overtime costs, resulting from employee work outside the program, were charged to program grants.Questioned Costs: $309Context: Information on agency approved Personnel Action Forms did not agree to selected SCEIS Remuneration Statement and SCEIS Labor Distribution Report data for one of forty tested employees. Additionally, for one of forty tested employees, hours worked outside the program resulted in excess overtime costs of $309 being charged to program grants.Cause: State Personnel Action Forms for program employees are not adequately reviewed on a routine basis. Additionally, SCEIS payroll system assigned all overtime costs to employee?s primary funding stream (non-program hours were entered manually by agency human resource personnel).Effect: The Office is not in compliance with applicable activities/costs requirements. Program expenditures may be overstated.Recommendation: We recommend that the Office implement policies and procedures to ensure that review of documentation related to program employee salaries occurs and is documented on a regular basis, and that hours for work outside the program completed by program employees and all resulting costs are reviewed for impact on program expenditures.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-20-2-1001, W912QG-20-2-1002Pass-Through Entity: Not applicableAward Period: October 1, 2019 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per National Guard Regulation (NGR) 5-1, Chapter 11-5, the grantee agrees to minimize the time elapsing between the transfer of funds from the U.S. Treasury and their disbursement by the State (no more than forty-five days).Condition: Advanced funds for three transactions were not expended within the required timeframe to minimize the time elapsing between drawdown and disbursement.Questioned Costs: None.Context: For three of forty-three tested transactions, advanced funds drawn exceeded the subsequent forty-five days of expenditures.Cause: SF-270 Report and supporting information were not adequately reviewed to ensure the proper amount of advance funds were requested in order to be expended within forty-five days. Internal controls over cash advances are inadequate.Effect: The Office may not expend advanced funds in a timely manner in accordance with program regulations.Recommendation: We recommend the Office implement and/or strengthen existing policies and procedures to ensure that advanced funds are expended in a timely manner in accordance with NGR 5-1, Chapter 11-5.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 151.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-20-2-1001; W912QG-18-2-1001Pass-Through Entity: Not applicableAward Period: October 1, 2019 through September 30, 2020; October 1, 2017 through September 30, 2018Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR 200.309 states that a non-federal entity may charge to the federal award only allowable costs incurred during the period of performance (except as described in?200.461 Publication and printing costs) and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. NGR 5-1, Chapter 11-10 requires the recipient provide a detailed listing of unliquidated claims and undisbursed obligations that will remain 90 days after the close of the federal fiscal year. Costs incurred in a federal fiscal year which are not disclosed by the recipient within 90 days of the end of the federal fiscal year, except costs associated with unliquidated claims and undisbursed obligations that the recipient has reported, shall not be eligible for reimbursement.Condition: Expenditures were incurred prior to the start of the program?s grant period of performance. Additionally, expenditures that occurred beyond ninety days after the close of the Federal Fiscal Year (FFY) were not included on the detailed listing of unliquidated claims and undisbursed obligations.Questioned Costs: UndeterminedContext: One of eight tested expenditure transactions for costs recorded during the first period of FFY20 program grants were incurred prior to the start of the grant?s period of performance (October 1, 2019). Additionally, three of forty tested expenditure transactions recorded to program grants beyond 90 days after the close of the FFY were not included on the detailed listing of unliquidated claims and undisbursed obligations.Cause: Transactions were not adequately reviewed to ensure expenditures occurred during period of performance, and were included on the detailed listing of unliquidated claims and undisbursed obligations when necessary.Effect: Expenditures may be charged to program grants outside of the period of performance.Recommendation: We recommend that the Office strengthen its internal controls to ensure that awarded funds are expended within the award's period of performance and/or listed on the detailed listing of unliquidated claims and undisbursed obligations when necessary.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 153.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-18-2-1002, W912QG-18-2-1021, W912QG-19-2-1007Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2018 and October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.303 Internal controls, the non-federal entity must: (a) 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: Total program expenditures reported on final reports did not agree to SCEIS accounting records.Questioned Costs: None.Context: For all three final reports tested, the reported total expenditure amount was not supported by SCEIS data. The total variance between the reports and SCEIS data was $13,555.Cause: SF-270 Report, Grant Close-Out Report, and supporting information were not adequately reviewed to ensure that total reported expenditures were complete, accurate, and agreed to accounting records.Effect: Accounting records do not accurately reflect program expenditures; program expenditures for impacted grants may be misstated.Recommendation: We recommend the Office strengthen its internal controls to ensure that the total reported expenditures for program grants agree to underlying accounting data (SCEIS).Prior Year Single Audit Finding Number: Not ApplicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 154.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Prevention and Treatment of Substance AbuseAssistance Listing No.: 93.959Federal Grant ID Number: 3B08TI010048-19S2, 6B08TI083037-01M002Pass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2021Type of Finding: Material weakness in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.430 (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with a non-federal entity?s laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.Condition: The Department did not have adequate controls in place to ensure timesheets were properly completed and reviewed by a supervisor, maintained by the agency and that the time and effort documentation agreed to salary allocations in the accounting system.Questioned Costs: UnknownContext: For 18 out of 60 paychecks tested, there were multiple instances where the time and effort documentation was either missing, did not contain all the required signatures, or there were discrepancies between the grant percentages from the time and effort documentation and the funding percentages paid in the accounting system.This is a repeat finding from the FY19 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY20, this issue has not been fully corrected.Cause: Department controls failed to prevent the identified issues. Additionally, management prepared funding allocation spreadsheets to override the allocations based on the employee time and effort records.Effect: The Department is not in compliance with applicable allowable activities/costs requirements.Recommendation: We recommend the Department implement policies and procedures to ensure time and effort reports are properly completed, reviewed, and maintained.We also recommend the Department ensure the accounting system accurately reports actual time worked.Prior Year Single Audit Finding Number: 2019-018Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 155.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Strategic Targeted Response Opioid Crisis Grant; Prevention and Treatment of Substance AbuseAssistance Listing No.: 93.788; 93.959Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2021Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ?331 All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 2 CFR 331(a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward.Condition: The Department communicated grant and program information to each subrecipient annually through a standardized contracting agreement; however, not all of the required information was included in the agreement.Questioned Costs: NoneContext: For eight of eight subrecipients tested for the Prevention and Treatment of Substance Abuse program and for six of six subrecipients tested for the Strategic Targeted Response Opioid Crisis Grant program, the subaward documents did not include all of the information required by 2 CFR 200.331(a).This is a repeat finding from the FY19 Single Audit. Due to a timing issue on implementation of corrective action, we reviewed subawards made after January 2020 and still noted missing elements on the agreements. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY20, this issue has not been fully corrected.Cause: The Department?s internal controls failed to ensure adequate communication to the subrecipients through the annual subaward process as required by federal regulations.Effect: The Department is not in compliance with federal subrecipient monitoring requirements.Recommendation: We recommend the Department update its subrecipient agreements to incorporate all required information to ensure adequate communication to subrecipients and to ensure compliance with federal requirements.Prior Year Single Audit Finding Number: 2019-017 (Assistance Listing No. 93.959 only)Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 155.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Strategic Targeted Response Opioid Crisis Grant; Prevention and Treatment of Substance AbuseAssistance Listing No.: 93.788; 93.959Federal Grant ID Number: 3B08TI010048-18S1, 6H79TI081720-01M002 and 3H79TI081720-01S1Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2021Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.303 Internal controls, the non-federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: Financial reports were not reviewed by an employee other than the report preparer prior to submission.Questioned Costs: NoneContext: We tested the sole SF-425 reports submitted during fiscal year 2020 for both grant programs and noted that the reports were not reviewed by an individual separate from the preparer prior to submission.Cause: Department personnel stated there was a new reporting process whereby the reports were completed and submitted online. They did not update their internal control process to ensure that a supervisory review of the report was performed.Effect: Without supervisory review, there is an increased possibility of inaccurate reporting.Recommendation: We recommend the Department strengthen controls to ensure that reports are properly reviewed by supervisory personnel before submission.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Opioid STRAssistance Listing No.: 93.788Federal Grant ID Number: 6H79TI081720-01M002 and 3H79TI081720-01S1Pass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2021Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.333, financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient.Condition: Certain information reported on the Performance Progress Report (PPR) did not agree to supporting documentation provided by the Department.Questioned Costs: NoneContext: We tested the PPR submission that was due on December 31, 2019 to ensure the reasonableness and accuracy of the report and were unable to verify the information reported in sections 1 through 4.Cause: Department personnel did not retain documentation to support information reported on the PPR.Effect: The Department may report incorrect information to the Substance Abuse and Mental Health Services Administration (SAMHSA), an operating division of the Department of Health and Human Services (HHS).Recommendation: We recommend the Department strengthen controls to ensure information reported to the SAMHSA is accurate and properly supported by documentation.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Child Support Enforcement, Social Services Block Grant, Adoption AssistanceAssistance Listing: 93.563, 93.667, 93.659Federal Grant ID Number: 1901SCCSES, 2001SCCSES, 1901SCSOSR, 2001SCSOSR, 1901SCADPT, 2001SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 31 CFR ? 205.12(b)(5), reimbursable funding means that a federal program agency transfers federal funds to a State after that State has already paid out the funds for federal assistance program purposes.Condition: Cash management compliance could not be confirmed for some federal cash draws.Questioned Costs: NoneContext: Supporting documentation was not adequate to determine that federal reimbursement was for the correct amount.Cause: The Department was unable to fully implement the corrective action associated with the finding from the prior year.Effect: The Department did not effectively document its cash management process to demonstrate compliance.Recommendation: We recommend that the Department continue implementation of the associated corrective action plan.Prior Year Single Audit Report Finding Number: 2019-011Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceAssistance Listing: 93.659Federal Grant ID Number: 1901SADPT, 2001SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: 45 CFR ? 75.361 outlines record retention requirements of the non-federal entity pertinent to the federal award.45 CFR ? 1356.40(b)(1) requires the adoption assistance agreement be signed and in effect at the time of or prior to the final decree of adoption.42 U.S.C. ? 673(a)(3) states that adoption assistance payments cannot exceed the foster care maintenance payment the child would have received in a foster family home for that period.42 U.S.C. ? 673(c) explains the children with special needs criteria.42 U.S.C. ? 675(8)(b) expands eligibility requirements for children over the age of eighteen.Condition: Eligibility related discrepancies were encountered for some payments and some payments exceeded the allowable amount.Questioned Costs: $4,756Context: Sixty payments were selected for testing eligibility compliance. Two of the subsidy payments tested exceeded the foster care maintenance payment rate the child would have received in a foster family home. For two payments tested, the adoption subsidy agreement was signed after the date the adoption was finalized. Additionally, seven of the subsidy payments tested were for children no longer eligible for payment. One nonrecurring expense payment tested was on behalf of a child that did not meet the special needs criteria. Finally, the Department was unable to provide adequate documentation to support eligibility for one other subsidy payment.Cause: Department controls failed to ensure eligibility was properly determined, benefits were terminated timely, and records were retained for the required amount of time. The global pandemic also significantly limited the Department?s ability to implement corrective action.Effect: The Department did not comply with and/or could not demonstrate compliance with eligibility and allowable costs/cost principles requirements.Recommendation: We recommend that the Department continue to implement corrective action for eligibility file controls.Prior Year Single Audit Report Finding Number: 2019-015Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 158.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceAssistance Listing: 93.659Federal Grant ID Number: 1901SCADPT, 2001SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: Discrepancies existed between federal financial reports and the Department?s supporting records.Questioned Costs: NoneContext: For both CB-496 reports selected for testing, discrepancies were noted between the supporting documentation and the average monthly number of children assisted reported in Part 1, Section D of the report. Errors were also identified in the Adoption Savings Calculation used in determining the amounts reported In Part 4 of the report.Cause: The Department had not completely implemented the corrective action associated with the finding from the prior year.Effect: The accuracy of the CB-496 reports could not be fully validated.Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission.Prior Year Single Audit Report Finding Number: 2019-012Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.361 states record retention requirements of the non-federal entity pertinent to the federal award.42 USC ? 671(a)(20) outlines requirements for criminal background checks of foster care providers, including those for child-care institutions.42 U.S.C. ? 672 describes the general eligibility requirements for foster care maintenance payments.Condition: Discrepancies related to eligibility determinations were identified.Questioned Costs: $2,954Context: Sixty payments were selected for testing eligibility compliance. Some eligibility documentation was incomplete or unsupported within the eligibility files of four of the test items, although eligibility could be confirmed through other support in three of those files. For two of the payments tested, the child was placed in a child-care institution that did not fully meet the criminal background check requirements. For two of the payments tested, clothing allowances were paid when the child was no longer eligible.Cause: The issues encountered were primarily due to disposal of the original eligibility files for cases that had been closed. Staffing turnover and Department oversight also contributed.Effect: The Department did not comply with federal eligibility, internal control, and record retention requirements.Recommendation: We recommend that the Department implement policies and procedures to ensure eligibility documentation is maintained and supports all federal requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 U.S.C. ? 671(a)(11) explains that in order for a State to be eligible for payments, it must have a plan approved by the Secretary which provides for periodic review of amounts paid as foster care maintenance payments to assure their continuing appropriateness.Condition: We were unable to confirm the inclusion of written requirements for the periodic review of maintenance payment rates in the Department?s approved plan.Questioned Costs: NoneContext: Foster care maintenance payment rates are periodically reviewed for appropriateness by the Department. However, we were unable to identify a written policy or procedure associated with an approved State plan that describes the periodic rate review process or establishes a rate review schedule.Cause: State plan documentation and related policies did not contain a description of the periodic review process and timing that the Department follows.Effect: It could not be determined if the periodic reviews, which were conducted, were carried out in accordance with management?s intent, as expressed through approved written policies.Recommendation: We recommend the Department review and update their State Plan documentation and associated policies and procedures to ensure all information referenced in their approved State Plan supports compliance with the applicable federal requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 160.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: Discrepancies existed between federal financial reports and the Department?s supporting records.Questioned Costs: NoneContext: Two quarterly CB-496 reports were selected for testing. Some administrative costs in Part 1, Section A were inadequately supported and, for one of the reports, some expenditures were omitted. Additionally, discrepancies were encountered between the number of children reported in Part 1, Section E of both reports and supporting documentation. Finally, in Part 2 of the reports, one adjustment was misclassified and another lacked supporting documentation.Cause: Department controls failed to detect and correct the identified errors and ensure all reported amounts were appropriately supported by Department records.Effect: The CB-496 reports contained errors, omissions and data which did not agree to supporting documentation.Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 160.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.403 outlines factors affecting allowability of costs, including adequate documentation.45 CFR ? 75.405(d) requires costs that benefit two or more projects or activities to be allocated to the projects based on the proportional benefit or, if that cannot be determined feasibly, allocated on another reasonable, documented basis.45 CFR ? 1356.60 explains fiscal requirements for title IV-E.Condition: Discrepancies related to allowable activities/costs were encountered for some program payments.Questioned Costs: $25Context: One hundred non-payroll disbursements were selected for allowable activities/costs testing. For two of the disbursements tested, the Department was unable to provide sufficient documentation to support how the costs were allocated. For five of the disbursements tested, some portion of the costs charged to the grant should have been allocated to other Department program/service areas, but the exact amount could not be determined. For two of the disbursements tested, the amounts paid for foster care maintenance exceeded the monthly rate allowed by the Department?s payment schedule by a combined total of $25. For some disbursements tested, the rate paid for non-regular foster care maintenance lacked adequate supporting documentation to determine compliance with federal allowable activities/costs requirements.Cause: Documentation and system issues caused the discrepancies noted.Effect: Charges to the grant may have been for unallowable activities and costs.Recommendation: We recommend that the Department implement policies and procedures that ensure all rates and payments charged to the program fully comply with federal requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 161.

Item 2020-001: Report Submission to the Federal Audit Clearinghouse (Other Matter Required to be Reported Under the Uniform Guidance) (Material Weakness) Condition: The agency did not prepare and submit its Data Collection Form and Reporting Package for the year ended June 30, 2020 to the Federal Audit Clearinghouse by the extended due date of September 30, 2021. Criteria: Per 200.512 of the Uniform Guidance, Report Submission, the audit shall be completed and the Data Collection Form and Reporting Package shall be electronically transmitted within the earlier of thirty (30) days after receipt of the auditor's reports, or nine (9) months after the end of the audit period. If the due date falls on a Saturday, Sunday, or federal holiday, the Data Collection Form and Reporting Package are due the next business day. The Uniform Guidance does not permit the recipient to extend the due date. Cause: Management did not review subsidiary ledgers for accuracy and reconcile them to the general ledger on a timely basis. Accordingly, the Agency's general ledger for the year ended June 30, 2019 was not closed out in a timely manner. Effect: The Agency's Data Collection Form and Reporting Package for the year ended June 30, 2020 was not prepared and submitted to the Federal Audit Clearinghouse by the due date. Recommendation: We recommend that management implement monthly financial reporting and closeout processes so that the financial closeout process can be performed timely.

Item 2020-002: Reporting (Material Weakness over Reporting and Non-Material Noncompliance). Condition: The Agency did not submit certain quarterly reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance program. Criteria: Per Part 4 of the OMB compliance Supplement: The ETA 191 Report is required to be submitted on a quarterly basis to the National Office by the 25th of the month following the close of the quarter. Cause: Internal controls are not in place to ensure that all required reports are being submitted in the accordance with the United States Department of Labor's timelines. The reports were affected by the unprecedented COVID-19 pandemic, which required all program resources to focus on pandemic claims processing. Some of the data needed for these reports was delayed due to the program and system resources focused on claims processing as well as the difficulty experienced due to the requirement of staff to shelter at home beginning April 2020 under the South Carolina Governor's Executive Order and restricted access to records located in the office. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance program. Context: We inspected a sample of quarterly reports and noted the following exception: Unemployment Insurance - One(1) ETA 191 quarterly report. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and the Employment Services Cluster programs and implement controls to ensure that all reports are filed on a timely basis.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid ClusterAssistance Listing: 93.775, 93.777, 93.778Federal Grant ID Number: 05-1905SC5MAP, 05-2005SC5MAPPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 42 CFR 433.12 (c), the State is required to credit the Medicaid program for ??overpayments made to Medicaid providers?? In addition, Title 45 Section 2500.6 B of the Centers for Medicare & Medicaid Services? (CMS) State Medicaid Manual states to ??determine the date or period of the expenditure for which the refund is made to establish the [Federal Medical Assistance Percentage] at which the original expenditure was matched by the federal government. Make refunds of the federal share at the FMAP for which you were reimbursed.?Condition: The Department did not remit the federal share of recoveries and collections to the Medicaid program in accordance with federal regulations and the State Medicaid Manual.Questioned Costs: UnknownContext: We tested 60 receivables to ensure the Department properly credited the Medicaid program for the federal share of identified overpayments. For three receivables tested, the Department used the incorrect federal medical assistance percentage to calculate the federal share which resulted in an underpayment of $288 to the federal grantor.This is a repeat finding from the FY19 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY20, this issue has not been fully corrected.Cause: Department personnel used the incorrect period of overpayment calculating and remitting the refunds due to human error.Effect: The Department?s control procedures did not detect the errors identified in our testing which could lead to further improper remittances.Recommendation: We recommend the Department continue its efforts to strengthen controls to ensure the federal share of recoveries and collections are remitted in accordance with applicable federal and State requirements.Prior Year Single Audit Finding Number: 2019-003Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 132.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)Assistance Listing: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1905SC5MAP, 05-2005SC5MAP; 05-1805SC5021Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 CFR 435.914 (a) states, ?The agency must include in each applicant?s case record facts to support the agency?s decision on his application.? In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), which states, ?A State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan.? Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulations apply to both programs.Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses.Questioned Costs: UnknownContext: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for six Medicaid recipients and three CHIP recipients.Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to worker error.Effect: The Department could not support eligibility determinations in accordance with its State plan.Recommendation: We recommend the Department continue its efforts to maintain documentation to support eligibility determinations in accordance with its State plan and federal regulations.Prior Year Single Audit Finding Number: 2019-005Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 133.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Children?s Health Insurance Program (CHIP)Assistance Listing: 93.767Federal Grant ID Number: 05-1805SC5021Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Section 4.32 of the Department?s Title XIX (Medicaid) State Plan (Income and Eligibility Verification System) affirms that it meets the requirements outlined in 42 CFR 435.930 (b), which states in part, ?The agency must?continue to furnish Medicaid regularly to all eligible individuals until they are found to be ineligible.? In addition, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation applies to both programs.Condition: The Department did not consistently discontinue the benefits of ineligible recipients.Questioned Costs: $5,851Context: We tested 60 individual recipients to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not discontinue the benefits of three recipients on the dates they became ineligible.Cause: Department personnel stated the closure process for these recipients ultimately was not completed due to their interpretation of the Families First Coronavirus Response Act.Effect: The Department was not in compliance with applicable eligibility requirements. In addition, payments were made on behalf of ineligible recipients.Recommendation: We recommend the Department discontinue the benefits of ineligible recipients in accordance with its State plan and federal regulations.Prior Year Single Audit Finding Number: 2019-006Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 135.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)Assistance Listing: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1905SC5MAP, 05-2005SC5MAP, 05-1805SC5021, 05-1905SC5022Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, ?the agency must promptly determine eligibility between regular renewals of eligibility.? In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for certain payment categories. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation and polices apply to both programs.Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual.Questioned Costs: UnknownContext: We tested 120 individual recipients (60 each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for 22 Medicaid recipients and 21 CHIP recipients.Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to backlog in case processing.Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements.Recommendation: We recommend eligibility reviews be performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual.Prior Year Single Audit Finding Number: 2019-007Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 138.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterAssistance Listing: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 1321.11 directs the State agency to develop policies to address the manner in which it will monitor the performance of all programs and activities for quality and effectiveness.Condition: The Department failed to comply with its policies for monitoring the programs and activities of its subrecipients.Questioned Costs: UnknownContext: Our test of subrecipients indicated progress had been made with the implementation of corrective action to address this finding reported in the prior year. However, the annual onsite visits and monitoring required by Department policy were not fully completed for the five subrecipients selected for testing.Cause: The Department?s ability to perform onsite visits and monitoring of subrecipients was constrained significantly by the global pandemic.Effect: Subrecipient programs and activities were not monitored in accordance with Department policies and federal requirements.Recommendation: We recommend that the Department continue to implement policies and procedures to facilitate compliance with Department and federal monitoring requirements.Prior Year Single Audit Report Finding Number: 2019-025Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 142.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterAssistance Listing: 93.044, 93.045, 93.053Federal Grant ID: 17AASCT3SS, 17AASCT3CM, 17AASCT3HDPass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Matching requirements of the program are mandated by 45 CFR ? 1321.47 as follows: The statewide non-federal share for State or area plan administration must not be less than 25 percent of the funds used under this part. All services statewide, including ombudsman services and services funded under Title III-B, C, D, E and F, must be funded on a statewide basis with a non-federal share of not less than 15 percent. Matching requirements for individual area agencies are determined by the State agency.Condition: Discrepancies existed between non-federal share amounts reported to meet matching requirements and the supporting accounting records.Questioned Costs: UnknownContext: The 2017 Title III-B and C grants, which closed during the audit period, were selected for detailed testing. While the total recipient share of expenditures reported for each grant met or exceeded the total share required, in comparison to the accounting system, the non-federal share amounts reported were overstated for administration and understated for services. These classification discrepancies totaled several hundred thousand dollars across all three Title III-B and C grants.Cause: The Department chose to reclassify some non-federal services expenditures recorded in the accounting system as non-federal administration expenditures on the federal report.Effect: The Department?s accounting system does not support the amounts reported for non-federal administration and services expenditures. The risk of noncompliance is greater when classification discrepancies exist between amounts reported and the Department?s accounting system.Recommendation: We recommend that policies and procedures are put in place to ensure that non-federal share reported for each matching requirement is supported by and agrees to the Department?s accounting system.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 142.

Federal Agency: US Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing: 84.027 and 84.173Federal Grant ID Number: H027A170081Pass-Through Entity: Not applicableAward Period: July 01, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.303 Internal controls, the non-federal entity must: (a) 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 award. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: An expenditure was posted to the incorrect fiscal year.Questioned Costs: NoneContext: One of thirty-two expenditures was posted to the incorrect fiscal year without being marked as a prior period expenditure.Cause: The Department's internal controls failed to detect an expenditure posted to the incorrect fiscal year.Effect: Expenditure reported incorrectly.Recommendation: We recommend that the Department strengthen internal controls regarding expenditure approval to ensure that expenditures are posted to the correct fiscal year.Prior Year Single Audit Finding Number: Not ApplicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 144.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180060Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: For costs to be allowable under federal awards, 2 CFR 200.403(c) requires that applicable policies and procedures must be applied uniformly to both federally-financed and other activities of the non-federal entity.Additionally, 2 CFR 200.313(b) requires a State to use, manage and dispose of equipment acquired under a federal award in accordance with State laws and procedures.Finally, the State of South Carolina Comptroller General?s Reporting Policies and Procedures Manual describes how equipment should be tracked for the purpose of ensuring compliance with the annual inventory requirements mandated by Section 10-1-140 of the South Carolina Code of Laws.Condition: Equipment was purchased and not managed in accordance with certain State procedures.Questioned Costs: UndeterminedContext: One of the disbursement transactions selected for testing included a preapproved purchase of numerous equipment items, some of which were not tracked by the Department in accordance with State policy. The amount of the equipment purchase that should have been tracked was not determined in our testing.Cause: Department controls failed to identify the purchase as equipment.Effect: Federally funded equipment was not tracked in accordance with State policy.Recommendation: We recommend that the Department implement procedures to ensure any equipment purchased with federal funding is managed in accordance with State requirements.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 146.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180061Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 29 USC 730(d)(1) requires States to reserve no less than fifteen percent of the allotted funds to be spent for the provision of pre-employment transition services.Condition: The Commission was not in compliance with the pre-employment transition services earmarking requirement.Questioned Costs: NoneContext: Testing of the one grant that closed during the audit period revealed that the amount charged to the grant for pre-employment transition services did not meet the fifteen percent requirement.Cause: Commission controls failed to ensure that the earmarking requirement was met prior to finalizing the grant.Effect: The Commission was not in compliance with the federal earmarking requirement.Recommendation: We recommend that the Commission implement procedures to ensure that spending requirements for pre-employment transition services are met before the grant is closed.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 34 CFR ?361.47 requires States to maintain a case record for each applicant and eligible individual that must include documentation to support eligibility determinations, development of an individualized plan for employment, services provided, and case closure. Much of the information contained in these case records is reported as key data elements in the Case Service Report (RSA-911).Condition: Key data elements reported on the Commission's RSA-911 performance reports did not agree with underlying case records.Questioned Costs: NoneContext: Two quarterly RSA-911 reports were selected for testing and the key data elements of twenty individuals were tested from each report. Discrepancies were noted for one application date, one eligibility determination date, three IPE dates, and one hourly rate at exit.Cause: Commission controls failed to identify and correct the discrepancies noted in the RSA-911 reports prior to submission, and subsequent corrections were not possible through the RSA-911 reporting process.Effect: Some of the data fields reported in the RSA-911 are inconsistent with the applicable supporting records.Recommendation: We recommend that the Commission continue implementation of the associated corrective action plan.Prior Year Single Audit Finding Number: 2019-028Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 34 CFR ?361.40(a)(2), the designated State agency must comply with any requirements necessary to ensure the accuracy and verification of reports.Condition: Discrepancies existed between federal financial reports and the Commission?s supporting records.Questioned Costs: NoneContext: The 2019 RSA-2 Annual Vocational Rehabilitation Program/Cost Report and the final SF-425 report for the 2018 grant were selected for testing. Several of the items reported in Schedules I and III of the RSA-2 report did not agree to the Commission?s supporting records. Additionally, the indirect expense base amount in the SF-425 report was not adequately supported by Commission documentation.Cause: Some of the original supporting data for the RSA-2 report was corrupted in a data loss event and the Commission was unable to reconstruct the lost data in the level of detail necessary to fully support the report. Staffing shortages and turnover also contributed to the discrepancies.Effect: Some reported information could not be verified.Recommendation: We recommend that the Commission develop and implement policies and procedures that ensure the security of all data compiled to support federal reports.Prior Year Single Audit Finding Number: 2019-029Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 148.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR ?200.303 requires non-federal entities to establish and maintain effective internal controls that ensure material compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Condition: Cash management compliance was not documented for some drawdowns.Questioned Costs: UnknownContext: For two of three drawdowns tested, adequate documentation was not maintained to support the amount of the drawdown.Cause: The Commission had not completely implemented the corrective action associated with the finding from the prior year.Effect: The Commission may drawdown funds in excess of eligible reimbursable expenditures.Recommendation: We recommend that the Commission continue implementing the corrective action plan and strengthen the associated controls to ensure compliance is clearly documented.Prior Year Single Audit Finding Number: 2019-030Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 148.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR ? 200.430 (a) states that the costs of compensation are allowable to the extent that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities.Condition: The allocation of some compensation costs was inadequately supported or improperly applied.Questioned Costs: UnknownContext: Forty payroll disbursements were randomly selected for testing and discrepancies associated with allocation of compensation to multiple grants were identified for six employees in the test. For four of the employees, the Commission used an outdated percentage to allocate costs. For the other two employees, adequate documentation was not maintained to substantiate the allocation.Cause: Commission controls failed to prevent the identified issues, but staffing shortages and turnover during the audit period were also contributing factors.Effect: The Commission may overcharge the grant for personnel cost.Recommendation: We recommend that the Commission implement procedures which will provide assurance that personnel charges are accurate, allowable, and properly allocated to applicable grants.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Federal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesAssistance Listing No.: 84.126Federal Grant ID Number: H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR ?200.303 requires non-federal entities to establish and maintain effective internal controls that ensure material compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Condition: The Commission?s internal control procedures for disbursements were not documented consistently and an overpayment was noted for one non-payroll disbursement tested.Questioned Costs: $64Context: While compensating controls were identified, there was inadequate evidence of proper approval for thirty of the eighty-one non-payroll disbursements selected for testing. For one of these payments, it was also noted that the amount paid exceeded the maximum amount allowed by Commission policy.Cause: The Commission failed to retain documentation demonstrating performance of their internal control process, established during a period of staffing shortages and turnover.Effect: The Commission did not maintain adequate documentation to demonstrate compliance with its own control procedures.Recommendation: We recommend that the Commission properly document all control procedures.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-20-2-1001, W912QG-20-2-1021Pass-Through Entity: Not applicableAward Period: October 1, 2019 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.430 (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with a non-federal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.Condition: Funding information on agency approved Personnel Action Form did not agree to selected SCEIS Remuneration Statement and SCEIS Labor Distribution Report data. Additionally, excess overtime costs, resulting from employee work outside the program, were charged to program grants.Questioned Costs: $309Context: Information on agency approved Personnel Action Forms did not agree to selected SCEIS Remuneration Statement and SCEIS Labor Distribution Report data for one of forty tested employees. Additionally, for one of forty tested employees, hours worked outside the program resulted in excess overtime costs of $309 being charged to program grants.Cause: State Personnel Action Forms for program employees are not adequately reviewed on a routine basis. Additionally, SCEIS payroll system assigned all overtime costs to employee?s primary funding stream (non-program hours were entered manually by agency human resource personnel).Effect: The Office is not in compliance with applicable activities/costs requirements. Program expenditures may be overstated.Recommendation: We recommend that the Office implement policies and procedures to ensure that review of documentation related to program employee salaries occurs and is documented on a regular basis, and that hours for work outside the program completed by program employees and all resulting costs are reviewed for impact on program expenditures.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-20-2-1001, W912QG-20-2-1002Pass-Through Entity: Not applicableAward Period: October 1, 2019 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per National Guard Regulation (NGR) 5-1, Chapter 11-5, the grantee agrees to minimize the time elapsing between the transfer of funds from the U.S. Treasury and their disbursement by the State (no more than forty-five days).Condition: Advanced funds for three transactions were not expended within the required timeframe to minimize the time elapsing between drawdown and disbursement.Questioned Costs: None.Context: For three of forty-three tested transactions, advanced funds drawn exceeded the subsequent forty-five days of expenditures.Cause: SF-270 Report and supporting information were not adequately reviewed to ensure the proper amount of advance funds were requested in order to be expended within forty-five days. Internal controls over cash advances are inadequate.Effect: The Office may not expend advanced funds in a timely manner in accordance with program regulations.Recommendation: We recommend the Office implement and/or strengthen existing policies and procedures to ensure that advanced funds are expended in a timely manner in accordance with NGR 5-1, Chapter 11-5.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 151.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-20-2-1001; W912QG-18-2-1001Pass-Through Entity: Not applicableAward Period: October 1, 2019 through September 30, 2020; October 1, 2017 through September 30, 2018Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 2 CFR 200.309 states that a non-federal entity may charge to the federal award only allowable costs incurred during the period of performance (except as described in?200.461 Publication and printing costs) and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. NGR 5-1, Chapter 11-10 requires the recipient provide a detailed listing of unliquidated claims and undisbursed obligations that will remain 90 days after the close of the federal fiscal year. Costs incurred in a federal fiscal year which are not disclosed by the recipient within 90 days of the end of the federal fiscal year, except costs associated with unliquidated claims and undisbursed obligations that the recipient has reported, shall not be eligible for reimbursement.Condition: Expenditures were incurred prior to the start of the program?s grant period of performance. Additionally, expenditures that occurred beyond ninety days after the close of the Federal Fiscal Year (FFY) were not included on the detailed listing of unliquidated claims and undisbursed obligations.Questioned Costs: UndeterminedContext: One of eight tested expenditure transactions for costs recorded during the first period of FFY20 program grants were incurred prior to the start of the grant?s period of performance (October 1, 2019). Additionally, three of forty tested expenditure transactions recorded to program grants beyond 90 days after the close of the FFY were not included on the detailed listing of unliquidated claims and undisbursed obligations.Cause: Transactions were not adequately reviewed to ensure expenditures occurred during period of performance, and were included on the detailed listing of unliquidated claims and undisbursed obligations when necessary.Effect: Expenditures may be charged to program grants outside of the period of performance.Recommendation: We recommend that the Office strengthen its internal controls to ensure that awarded funds are expended within the award's period of performance and/or listed on the detailed listing of unliquidated claims and undisbursed obligations when necessary.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 153.

Federal Agency: Department of DefenseFederal Program Title: National Guard Military Operations and Maintenance (O&M) ProjectsAssistance Listing No.: 12.401Federal Grant ID Number: W912QG-18-2-1002, W912QG-18-2-1021, W912QG-19-2-1007Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2018 and October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.303 Internal controls, the non-federal entity must: (a) 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. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: Total program expenditures reported on final reports did not agree to SCEIS accounting records.Questioned Costs: None.Context: For all three final reports tested, the reported total expenditure amount was not supported by SCEIS data. The total variance between the reports and SCEIS data was $13,555.Cause: SF-270 Report, Grant Close-Out Report, and supporting information were not adequately reviewed to ensure that total reported expenditures were complete, accurate, and agreed to accounting records.Effect: Accounting records do not accurately reflect program expenditures; program expenditures for impacted grants may be misstated.Recommendation: We recommend the Office strengthen its internal controls to ensure that the total reported expenditures for program grants agree to underlying accounting data (SCEIS).Prior Year Single Audit Finding Number: Not ApplicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 154.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Prevention and Treatment of Substance AbuseAssistance Listing No.: 93.959Federal Grant ID Number: 3B08TI010048-19S2, 6B08TI083037-01M002Pass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2021Type of Finding: Material weakness in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.430 (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; (2) Follows an appointment made in accordance with a non-federal entity?s laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.Condition: The Department did not have adequate controls in place to ensure timesheets were properly completed and reviewed by a supervisor, maintained by the agency and that the time and effort documentation agreed to salary allocations in the accounting system.Questioned Costs: UnknownContext: For 18 out of 60 paychecks tested, there were multiple instances where the time and effort documentation was either missing, did not contain all the required signatures, or there were discrepancies between the grant percentages from the time and effort documentation and the funding percentages paid in the accounting system.This is a repeat finding from the FY19 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY20, this issue has not been fully corrected.Cause: Department controls failed to prevent the identified issues. Additionally, management prepared funding allocation spreadsheets to override the allocations based on the employee time and effort records.Effect: The Department is not in compliance with applicable allowable activities/costs requirements.Recommendation: We recommend the Department implement policies and procedures to ensure time and effort reports are properly completed, reviewed, and maintained.We also recommend the Department ensure the accounting system accurately reports actual time worked.Prior Year Single Audit Finding Number: 2019-018Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 155.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Strategic Targeted Response Opioid Crisis Grant; Prevention and Treatment of Substance AbuseAssistance Listing No.: 93.788; 93.959Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2021Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ?331 All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 2 CFR 331(a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward.Condition: The Department communicated grant and program information to each subrecipient annually through a standardized contracting agreement; however, not all of the required information was included in the agreement.Questioned Costs: NoneContext: For eight of eight subrecipients tested for the Prevention and Treatment of Substance Abuse program and for six of six subrecipients tested for the Strategic Targeted Response Opioid Crisis Grant program, the subaward documents did not include all of the information required by 2 CFR 200.331(a).This is a repeat finding from the FY19 Single Audit. Due to a timing issue on implementation of corrective action, we reviewed subawards made after January 2020 and still noted missing elements on the agreements. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY20, this issue has not been fully corrected.Cause: The Department?s internal controls failed to ensure adequate communication to the subrecipients through the annual subaward process as required by federal regulations.Effect: The Department is not in compliance with federal subrecipient monitoring requirements.Recommendation: We recommend the Department update its subrecipient agreements to incorporate all required information to ensure adequate communication to subrecipients and to ensure compliance with federal requirements.Prior Year Single Audit Finding Number: 2019-017 (Assistance Listing No. 93.959 only)Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 155.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Strategic Targeted Response Opioid Crisis Grant; Prevention and Treatment of Substance AbuseAssistance Listing No.: 93.788; 93.959Federal Grant ID Number: 3B08TI010048-18S1, 6H79TI081720-01M002 and 3H79TI081720-01S1Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2021Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.303 Internal controls, the non-federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: Financial reports were not reviewed by an employee other than the report preparer prior to submission.Questioned Costs: NoneContext: We tested the sole SF-425 reports submitted during fiscal year 2020 for both grant programs and noted that the reports were not reviewed by an individual separate from the preparer prior to submission.Cause: Department personnel stated there was a new reporting process whereby the reports were completed and submitted online. They did not update their internal control process to ensure that a supervisory review of the report was performed.Effect: Without supervisory review, there is an increased possibility of inaccurate reporting.Recommendation: We recommend the Department strengthen controls to ensure that reports are properly reviewed by supervisory personnel before submission.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Opioid STRAssistance Listing No.: 93.788Federal Grant ID Number: 6H79TI081720-01M002 and 3H79TI081720-01S1Pass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2021Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.333, financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient.Condition: Certain information reported on the Performance Progress Report (PPR) did not agree to supporting documentation provided by the Department.Questioned Costs: NoneContext: We tested the PPR submission that was due on December 31, 2019 to ensure the reasonableness and accuracy of the report and were unable to verify the information reported in sections 1 through 4.Cause: Department personnel did not retain documentation to support information reported on the PPR.Effect: The Department may report incorrect information to the Substance Abuse and Mental Health Services Administration (SAMHSA), an operating division of the Department of Health and Human Services (HHS).Recommendation: We recommend the Department strengthen controls to ensure information reported to the SAMHSA is accurate and properly supported by documentation.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Child Support Enforcement, Social Services Block Grant, Adoption AssistanceAssistance Listing: 93.563, 93.667, 93.659Federal Grant ID Number: 1901SCCSES, 2001SCCSES, 1901SCSOSR, 2001SCSOSR, 1901SCADPT, 2001SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 31 CFR ? 205.12(b)(5), reimbursable funding means that a federal program agency transfers federal funds to a State after that State has already paid out the funds for federal assistance program purposes.Condition: Cash management compliance could not be confirmed for some federal cash draws.Questioned Costs: NoneContext: Supporting documentation was not adequate to determine that federal reimbursement was for the correct amount.Cause: The Department was unable to fully implement the corrective action associated with the finding from the prior year.Effect: The Department did not effectively document its cash management process to demonstrate compliance.Recommendation: We recommend that the Department continue implementation of the associated corrective action plan.Prior Year Single Audit Report Finding Number: 2019-011Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceAssistance Listing: 93.659Federal Grant ID Number: 1901SADPT, 2001SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: 45 CFR ? 75.361 outlines record retention requirements of the non-federal entity pertinent to the federal award.45 CFR ? 1356.40(b)(1) requires the adoption assistance agreement be signed and in effect at the time of or prior to the final decree of adoption.42 U.S.C. ? 673(a)(3) states that adoption assistance payments cannot exceed the foster care maintenance payment the child would have received in a foster family home for that period.42 U.S.C. ? 673(c) explains the children with special needs criteria.42 U.S.C. ? 675(8)(b) expands eligibility requirements for children over the age of eighteen.Condition: Eligibility related discrepancies were encountered for some payments and some payments exceeded the allowable amount.Questioned Costs: $4,756Context: Sixty payments were selected for testing eligibility compliance. Two of the subsidy payments tested exceeded the foster care maintenance payment rate the child would have received in a foster family home. For two payments tested, the adoption subsidy agreement was signed after the date the adoption was finalized. Additionally, seven of the subsidy payments tested were for children no longer eligible for payment. One nonrecurring expense payment tested was on behalf of a child that did not meet the special needs criteria. Finally, the Department was unable to provide adequate documentation to support eligibility for one other subsidy payment.Cause: Department controls failed to ensure eligibility was properly determined, benefits were terminated timely, and records were retained for the required amount of time. The global pandemic also significantly limited the Department?s ability to implement corrective action.Effect: The Department did not comply with and/or could not demonstrate compliance with eligibility and allowable costs/cost principles requirements.Recommendation: We recommend that the Department continue to implement corrective action for eligibility file controls.Prior Year Single Audit Report Finding Number: 2019-015Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 158.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceAssistance Listing: 93.659Federal Grant ID Number: 1901SCADPT, 2001SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: Discrepancies existed between federal financial reports and the Department?s supporting records.Questioned Costs: NoneContext: For both CB-496 reports selected for testing, discrepancies were noted between the supporting documentation and the average monthly number of children assisted reported in Part 1, Section D of the report. Errors were also identified in the Adoption Savings Calculation used in determining the amounts reported In Part 4 of the report.Cause: The Department had not completely implemented the corrective action associated with the finding from the prior year.Effect: The accuracy of the CB-496 reports could not be fully validated.Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission.Prior Year Single Audit Report Finding Number: 2019-012Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.361 states record retention requirements of the non-federal entity pertinent to the federal award.42 USC ? 671(a)(20) outlines requirements for criminal background checks of foster care providers, including those for child-care institutions.42 U.S.C. ? 672 describes the general eligibility requirements for foster care maintenance payments.Condition: Discrepancies related to eligibility determinations were identified.Questioned Costs: $2,954Context: Sixty payments were selected for testing eligibility compliance. Some eligibility documentation was incomplete or unsupported within the eligibility files of four of the test items, although eligibility could be confirmed through other support in three of those files. For two of the payments tested, the child was placed in a child-care institution that did not fully meet the criminal background check requirements. For two of the payments tested, clothing allowances were paid when the child was no longer eligible.Cause: The issues encountered were primarily due to disposal of the original eligibility files for cases that had been closed. Staffing turnover and Department oversight also contributed.Effect: The Department did not comply with federal eligibility, internal control, and record retention requirements.Recommendation: We recommend that the Department implement policies and procedures to ensure eligibility documentation is maintained and supports all federal requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 U.S.C. ? 671(a)(11) explains that in order for a State to be eligible for payments, it must have a plan approved by the Secretary which provides for periodic review of amounts paid as foster care maintenance payments to assure their continuing appropriateness.Condition: We were unable to confirm the inclusion of written requirements for the periodic review of maintenance payment rates in the Department?s approved plan.Questioned Costs: NoneContext: Foster care maintenance payment rates are periodically reviewed for appropriateness by the Department. However, we were unable to identify a written policy or procedure associated with an approved State plan that describes the periodic rate review process or establishes a rate review schedule.Cause: State plan documentation and related policies did not contain a description of the periodic review process and timing that the Department follows.Effect: It could not be determined if the periodic reviews, which were conducted, were carried out in accordance with management?s intent, as expressed through approved written policies.Recommendation: We recommend the Department review and update their State Plan documentation and associated policies and procedures to ensure all information referenced in their approved State Plan supports compliance with the applicable federal requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 160.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.303 requires effective internal controls be established and maintained in order to provide reasonable assurance that the federal award is being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Condition: Discrepancies existed between federal financial reports and the Department?s supporting records.Questioned Costs: NoneContext: Two quarterly CB-496 reports were selected for testing. Some administrative costs in Part 1, Section A were inadequately supported and, for one of the reports, some expenditures were omitted. Additionally, discrepancies were encountered between the number of children reported in Part 1, Section E of both reports and supporting documentation. Finally, in Part 2 of the reports, one adjustment was misclassified and another lacked supporting documentation.Cause: Department controls failed to detect and correct the identified errors and ensure all reported amounts were appropriately supported by Department records.Effect: The CB-496 reports contained errors, omissions and data which did not agree to supporting documentation.Recommendation: We recommend that the Department continue to strengthen its internal controls to ensure that federal reports are free from error and clearly supported prior to submission.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 160.

Federal Agency: Department of Health and Human ServicesFederal Program Title: Foster Care?Title IV-EAssistance Listing: 93.658Federal Grant ID Number: 1901SCFOST, 2001SCFOSTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.403 outlines factors affecting allowability of costs, including adequate documentation.45 CFR ? 75.405(d) requires costs that benefit two or more projects or activities to be allocated to the projects based on the proportional benefit or, if that cannot be determined feasibly, allocated on another reasonable, documented basis.45 CFR ? 1356.60 explains fiscal requirements for title IV-E.Condition: Discrepancies related to allowable activities/costs were encountered for some program payments.Questioned Costs: $25Context: One hundred non-payroll disbursements were selected for allowable activities/costs testing. For two of the disbursements tested, the Department was unable to provide sufficient documentation to support how the costs were allocated. For five of the disbursements tested, some portion of the costs charged to the grant should have been allocated to other Department program/service areas, but the exact amount could not be determined. For two of the disbursements tested, the amounts paid for foster care maintenance exceeded the monthly rate allowed by the Department?s payment schedule by a combined total of $25. For some disbursements tested, the rate paid for non-regular foster care maintenance lacked adequate supporting documentation to determine compliance with federal allowable activities/costs requirements.Cause: Documentation and system issues caused the discrepancies noted.Effect: Charges to the grant may have been for unallowable activities and costs.Recommendation: We recommend that the Department implement policies and procedures that ensure all rates and payments charged to the program fully comply with federal requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 161.

Subrecipient MonitoringFederal Agency: Department of Homeland SecurityFederal Program Title: Disaster Grants ? Public Assistance (Presidentially Declared Disasters)CFDA No.: 97.036Federal Grant ID Number: FEMA-4166-DR-SC; FEMA-4241-DR-SC; FEMA-4286-DR-SC; FEMA-4346-DR-SCPass-Through Entity: Not applicableType of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: 2 CFR 200.331 (d) (1) (2) requires the pass-through entity to review the audit reports required of the subrecipient and follow-up as necessary.Condition: Documentation was not adequate to demonstrate that the pass-through entity verified each applicable subrecipient was audited as required.Questioned Costs: NoneContext: This is a repeat finding from the FY18 Single Audit. For all five subrecipients randomly selected for testing, a Single Audit was completed but documentation did not support that the Single Audit had been timely reviewed by program personnel.Cause: Office documentation requirements lack adequate evidence that Single Audits of all subrecipients were verified and reviewed as required.Effect: The Office may not identify and properly follow up on noncompliance of subrecipients.Recommendation: We recommend that Office policies and procedures ensure that subrecipient monitoring is performed in accordance with federal regulations and clearly supports the collection and review of all required Single Audit reports of its subrecipients.Prior Year Single Audit Finding Number: 2018-040Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Item 2019-002: Reporting(Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly and annual reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance and the Employment Services Cluster programs. Cause: Internal Controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor's timelines. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance and the Employment Services programs. Context: We inspected a sample of quarterly reports and annual reports and noted the following number of exceptions: Unemployment Insurance -One(1) ETA 191 quarterly report; Employment Services Cluster - 3 ETA-9130 quarterly reports. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and Employment Services Cluster programs.

Allowable Costs/Cost Principles - Federal Share of Recoveries / CollectionsFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid ClusterCFDA No.: 93.775, 93.777, 93.778Federal Grant ID Number: 05-1905SC5MAPPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 42 CFR 433.12 (c), the State is required to credit the Medicaid program for ??overpayments made to Medicaid providers?? In addition, Title 45 Section 2500.6 B of the Centers for Medicare & Medicaid Services? (CMS) State Medicaid Manual states to ??determine the date or period of the expenditure for which the refund is made to establish the [Federal Medical Assistance Percentage] at which the original expenditure was matched by the Federal government. Make refunds of the federal share at the FMAP for which you were reimbursed.?Condition: The Department did not remit the federal share of recoveries and collections to the Medicaid program in accordance with Federal regulations and the State Medicaid Manual.Questioned Costs: UnknownContext: We tested sixty receivables to ensure the Department properly credited the Medicaid program for the federal share of identified overpayments. For one receivable tested, the Department used the incorrect Federal medical assistance percentage to calculate the federal share which resulted in an underpayment of $2 to the federal grantor.This is a repeat finding from the FY18 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY19, this issue has not been fully corrected.Cause: Department personnel used the incorrect period of overpayment calculating and remitting the refunds due to human error. Department personnel further stated that quarterly reviews of randomly selected receivables are performed.Effect: The Department?s control procedures did not detect the errors identified in our testing which could lead to further improper remittances.Recommendation: We recommend the Department strengthen its control procedures to ensure the federal share of recoveries and collections are remitted in accordance with applicable federal and state requirements.Prior Year Single Audit Finding Number: 2018-001Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Matching, Level of Effort, EarmarkingFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid ClusterCFDA No.: 93.775, 93.777, 93.778Federal Grant ID Number: 05-1905SC5MAPPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 CFR 433.10 (c) (1) states, ?Under Section 1905 (a) (5) of the Act, the Federal share of State expenditures for family planning services is 90 percent.? In addition, the Centers for Medicare & Medicaid Services (CMS) State Medicaid Director Letter 14-003 states in part, ??family planning related services are matched at the states? regular Federal medical assistance percentage.?Condition: The Department was not in compliance with the Federal matching requirement for family planning services or family planning related services.Questioned Costs: NoneContext: We tested sixty individual claims to ensure the Department was in compliance with matching requirements. We determined the Department did not use the proper Federal medical assistance percentage for three of the four contraceptive services selected for testing as well as all (two) of the STI diagnosis services selected for testing.Cause: Department personnel stated that errors within the Medicaid Management Information System (MMIS) as well as the utilization of the improper modifier caused contraceptive services and STI diagnosis services to map to the incorrect internal fund code and Federal medical assistance percentage.Effect: The Department?s control procedures did not detect the errors identified in our testing which could lead to further improper payments.Recommendation: We recommend the Department correct the errors in MMIS to ensure compliance with the Federal matching requirement for family planning services and family planning related services.Prior Year Single Audit Finding Number: 2018-003Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Documentation of EligibilityFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)CFDA No.: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1805SC5MAP, 05-1905SC5MAP; 05-1805SC5021, 05-1905SC5022Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 CFR 435.914 (a) states, ?The agency must include in each applicant?s case record facts to support the agency?s decision on his application.? In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), which states, ?A State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan.? Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulations apply to both programs.Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses.Questioned Costs: UnknownContext: We tested one hundred twenty individual recipients (sixty each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for thirteen Medicaid recipients and eight CHIP recipients.This is a repeat finding from the FY18 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY19, this issue has not been fully corrected.Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to human error.Effect: The Department could not support eligibility determinations in accordance with its State plan.Recommendation: We recommend the Department maintain documentation to support its eligibility determinations in accordance with its State plan and Federal regulations.Prior Year Single Audit Finding Number: 2018-004Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Discontinuation of BenefitsFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)CFDA No.: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1805SC5MAP, 05-1905SC5MAP; 05-1805SC5021Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Section 4.32 of the Department?s Title XIX (Medicaid) State Plan (Income and Eligibility Verification System) affirms that it meets the requirements outlined in 42 CFR 435.930 (b), which states in part, ?The agency must?continue to furnish Medicaid regularly to all eligible individuals until they are found to be ineligible.? In addition, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation applies to both programs.Condition: The Department did not consistently discontinue the Medicaid and CHIP benefits of ineligible recipients.Questioned Costs: $22,460Context: We tested one hundred twenty individual recipients (sixty each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not discontinue the benefits of five Medicaid recipients and three CHIP recipients on the dates they became ineligible.Cause: Department personnel stated the closure process for these recipients ultimately was not completed due to backlog in case processing and the continued prioritization of applications.Effect: The Department was not in compliance with applicable eligibility requirements. In addition, Medicaid and CHIP payments were made on behalf of ineligible recipients.Recommendation: We recommend the Department discontinue the Medicaid and CHIP benefits of ineligible recipients in accordance with its State plan and Federal regulations.Prior Year Single Audit Finding Number: 2018-005Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 151.

Annual Eligibility ReviewsFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)CFDA No.: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1805SC5MAP, 05-1905SC5MAP; 05-1805SC5021, 05-1905SC5022Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, ?the agency must promptly determine eligibility between regular renewals of eligibility.? In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for payment categories 10, 12, 32, 57, 59, 60, 71, and 88. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation and policies apply to both programs.Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual.Questioned Costs: UnknownContext: We tested one hundred twenty individual recipients (sixty each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for fourteen Medicaid recipients (payment categories 10, 12, 32, 57, 59, 60, and 71) and twenty-one CHIP recipients (payment category 88).Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to backlog in case processing and the continued prioritization of applications.Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements.Recommendation: We recommend the Department ensure that eligibility reviews are performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual.Prior Year Single Audit Finding Number: 2018-006Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 152.

ReportingFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Support EnforcementCFDA No.: 93.563Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Section 454 (24) of the Social Security Act (the Act), as amended, by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), requires states to have an operational automated data processing and information retrieval system for child and spousal support. The system must be in place by October 1, 1997, and meet all the requirements of paragraph (16) of the Act. The secretary of the U.S. Department of Health and Human Services (USDHHS) must approve the system.Condition: The automated data processing and information retrieval system had not been fully implemented during the audit period.Questioned Costs: UnknownContext: As reported in the prior year, the Department did not implement the automated data processing and information retrieval system as required by Section 454 (24) (B) and as a result has been assessed penalty payments for noncompliance. The Department began implementation of the system in State fiscal year 2019, completed implementation shortly after the State fiscal year, and subsequently received Federal approval of the system.Cause: The Department and its contractor were in process of finalizing implementation of the system during State fiscal year 2019.Effect: Prior to the system being fully implemented, certain data necessary for proper completion of the Office of Child Support Enforcement (OCSE) 34A financial report was not available and, as a result, the Department was not in compliance with its Federal requirements during the audit period.Recommendation: We recommend that Department internal controls remain in place and operating to ensure that the Federally approved child support automated data processing and information retrieval system continues to meet all applicable Federal requirements.Prior Year Single Audit Report Finding Number: 2018-011Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

ReportingFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Support EnforcementCFDA No.: 93.563Federal Grant ID Number: 1804SCCSES, 1904SCCESPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 2 CFR ? 200.510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR ? 200.502. Per this section, the schedule must include the total amount provided to subrecipients from each Federal program.Condition: The schedule of expenditures of Federal awards initially prepared by Department management contained several errors, including the incorrect amount of program funds passed through to subrecipients.Questioned Costs: NoneContext: Auditor corrections were necessary for accurate presentation of the schedule of expenditures of Federal awards. In order to agree schedule expenditures to the accounting records, auditor corrections were necessary, including an adjustment in the amount of $3,630,763 to correct the reported subrecipient expenditures.Cause: Management review of the schedule of expenditures of Federal awards failed to detect and correct several presentation errors and accounting transactions that were improperly included in the reported subrecipient expenditure amounts.Effect: Auditor corrections and adjustments were required to correct the schedule of expenditures of Federal awards.Recommendation: We recommend that the Department review procedures for preparing, reviewing and approving its schedule of expenditures of Federal awards to ensure accurate reporting.Prior Year Single Audit Report Finding Number: 2018-014Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Cash ManagementFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Support Enforcement, Social Services Block Grant, Adoption AssistanceCFDA No.: 93.563, 93.667, 93.659Federal Grant ID Number: 1804SCCSES, 1802SCSORSR, 1801SCADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 31 CFR ? 205.12(b)(5) reimbursable funding means that a Federal Program Agency transfers Federal funds to a State after that State has already paid out the funds for Federal assistance program purposes.Condition: Documentation supporting Federal cash draws was not adequate to confirm compliance with cash management requirements.Questioned Costs: NoneContext: Department supporting documentation was not adequate to fully support accurate reimbursement for fifteen of fifteen Federal cash draws tested. In addition two related instances of amounts subsequently being required to be returned to their respective grantors were noted.Cause: Due to staffing turnover, the Department?s internal controls associated with Federal cash draws were not operating effectively to demonstrate compliance and prevent errors.Effect: The Department did not adequately document their Federal cash draw process to demonstrate compliance. Additionally, there were two instances in which the Department returned overdrawn funding to the grantor: one for $781,141 to the Child Support Enforcement program and another for $121,539 to the Adoption Assistance program.Recommendation: We recommend that the Department review its internal controls over the Federal cash draws process to ensure compliance with cash management requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Reporting/Level of EffortFederal Agency: Department of Health and Human ServicesFederal Program Title: Social Services Block Grant, Adoption AssistanceCFDA No.: 93.667, 93.659Federal Grant ID Number: 1802SCSOSR, 1801SCADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.342 requires compliance with the provisions of monitoring and reporting program performance. The Department's internal controls should be designed to ensure compliance with those provisions.42 U.S.C. ? 673(a)(8) outlines the level of effort requirements for adoption savings.Condition: An annual federal financial report, SF-425, and two quarterly CB-496 reports were submitted with financial and statistical errors.Questioned Costs: NoneContext: For one of two annual SF-425 reports selected for testing, incorrect amounts were reported for Federal cash receipts and cash disbursements. Receipts occurring after the report date were included on the cash basis report and total Federal funds authorized were mistakenly reported as disbursements.For both CB-496 reports selected for testing, administrative costs ? non-recurring were reported with administrative costs ? agency, rather than separately as required by the report instructions. In addition, discrepancies were noted between the supporting documentation and number of payments for children assisted reported in Part 1, Section D of the report. Finally, in Part 4 of the report, discrepancies were noted when agreeing to data used to calculate amounts reported on lines 3 and 5 and the Department was unable to provide support for the amount reported on line 10. Because of the relationship of the amount on line 10 to level of effort compliance, level of effort compliance could not be confirmed.Cause: The Department?s internal controls failed to detect the errors prior to submission of the reports.Effect: Federal cash receipts and cash disbursements were overstated on the SF-425 report.All administrative costs ? non-recurring were misclassified as administrative costs ? agency on each of the two CB-496 reports tested. Certain amounts reported in Part 1, Section D, and in Part 4 of the report could not be validated.Recommendation: We recommend that the Department strengthen its internal controls and processes to ensure that Federal reports are free from error and clearly supported prior to submission of the report.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Activities Allowed or UnallowedFederal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceCFDA No.: 93.659Federal Grant ID Number: 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 1356 identifies the allowable activities of the Adoption Assistance grant program.Condition: A Department case service expenditure unrelated to the Adoption Assistance program was charged to the grant.Questioned Costs: $3,345Context: One of sixty expenditures selected for testing was for an activity not related to the Adoption Assistance program.Cause: The Department?s internal controls failed to prevent an improper charge to the grant.Effect: Program funds were used to pay a claim that was not allowable in accordance with federal regulations.Recommendation: We recommend that the Department strengthen its internal controls and processes to ensure that all charges to the grant are for allowable activities only.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 158.

Allowable Costs/Cost PrinciplesFederal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceCFDA No.: 93.659Federal Grant ID Number: 1801SCADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.405(d) addresses the requirements and guidance for the allocation of direct costs applicable to multiple projects.Condition: Allowable training costs charged to the program were not adequately supported.Questioned Costs: $73,338Context: Seven of eight administrative and training disbursement transactions selected for testing were for allowable training costs benefitting multiple grant programs. The Department?s allocation of the cost, and related cost share, to the various grant programs was not adequately supported.Cause: Training costs benefitting multiple programs were charged using a previously determined rate without updating the charge to match the actual proportional benefit to each program.Effect: The potential for overcharging the grant exists when costs are charged to the programs without documenting the proportional benefit in accordance with the federal regulations.Recommendation: We recommend the Department update internal controls for charging direct training costs benefitting multiple programs to ensure that the costs charged only reflect the net proportional benefit applicable to each program.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 158.

EligibilityFederal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceCFDA No.: 93.659Federal Grant ID Number: 1801ASADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: 45 CFR ? 75.361 outlines record retention requirements of the non-Federal entity pertinent to the Federal award.45 CFR ? 1356.40(b) outlines the requirements pertaining to signed adoption agreements.42 U.S.C. ? 673(a) outlines eligibility requirements for subsidy payments.42 U.S.C. ? 675(8) expands eligibility requirements for children over the age of 18.Condition: Eligibility could not be confirmed for some payments tested.Questioned Costs: $2,346Context: Sixty payments were selected for testing of eligibility compliance. The adoption subsidy agreement on file for four of those payments was not signed in accordance with the federal regulations, and one of those files lacked any additional documentation to verify eligibility. For another payment tested, the subsidy payment exceeded the amount documented on the adoption subsidy agreement. In addition, documentation was not adequate to support three subsidy payments tested for eligible children no longer under the age of eighteen at the time of the payment.Cause: Documentation in some case files was not adequate to support the applicable subsidy payments.Effect: Eligibility, in accordance with federal and/or Department requirements, could not be confirmed for some subsidy payments.Recommendation: We recommend that the Department review eligibility file controls to ensure that all payments are adequately supported throughout the eligibility period.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Period of PerformanceFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Care and Development FundCFDA No.: 93.575, 93.596Federal Grant ID Number: 1701SCCCDFPass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2018Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 98.60(d)(3) states, both the Federal and non-Federal share of the Matching Fund shall be obligated in the fiscal year in which the funds are granted and liquidated no later than the end of the succeeding fiscal year.Condition: Matching funds charged to the grant were liquidated after the end of the succeeding fiscal year of the grant.Questioned Costs: UndeterminedContext: One of five transactions selected for testing was a journal entry which traced back to disbursement transactions that were liquidated after the end of the liquidation period of the grant.Cause: The Department?s internal controls failed to identify and prevent the liquidation of funds after the allowed period.Effect: Expenditures may be charged to the grant that are outside the allowed period of performance.Recommendation: We recommend that the Department strengthen internal controls to ensure that all awarded funds are liquidated within the award?s period of performance.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Subrecipient MonitoringFederal Agency: Department of Health and Human ServicesFederal Program Title: Prevention and Treatment of Substance AbuseCFDA No.: 93.959Federal Grant ID Number: J2001SAPBG17, J2001SAPBG18, J2001SAPBG19Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 45 CFR ?75.352(a) All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 45 CFR 75.352 (a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward.Condition: The Department communicates grant and program information to each subrecipient annually through a standardized contracting agreement, however not all of the required information is included in the process.Questioned Costs: NoneContext: For eight of eight subrecipients tested, subaward documents did not include all of the federally required information.Cause: The Department?s internal controls failed to ensure adequate communications to the subrecipients through the annual subaward process as required by the federal regulations.Effect: The Department is not in compliance with the requirements for pass-through entities.Recommendation: We recommend that the Department update subrecipient agreements to incorporate all of the required information to ensure adequate communication to their subrecipients.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 161.

Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesFederal Agency: Department of Health and Human ServicesFederal Program Title: Prevention and Treatment of Substance AbuseCFDA No.: 93.959Federal Grant ID Number: J2001SAPBG18, J2001SAPBG19Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Material Weakness in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.430 (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.Condition: The Department did not have adequately functioning controls over time and effort reporting to ensure timesheets were reviewed by a direct supervisor and supporting evidence was maintained.Questioned Costs: UnknownContext: For nineteen of forty payroll transactions tested, employee time and effort review and approval documentation was not maintained in order to adequately support control process.Cause: The Department did not maintain documentation of direct supervisor review and approval of time and effort.Effect: The Department is not in compliance with applicable allowable activities/costs requirements.Recommendation: We recommend that the Department implement policies and procedures to ensure that sufficient documentation of reviews and approvals are maintained.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 161.

Cash ManagementFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 31 CFR ? 205.12(c)(5) Reimbursable funding means that a Federal Program Agency transfers Federal funds to a State after that State has already paid out the funds for Federal assistance program purposes.Condition: For the full fiscal year, the Department did not have an internal control process in place to ensure that reimbursement requests sent to the federal cognizant agency were fully supported by expenditures previously paid out by the state.Questioned Costs: NoneContext: The Department was deemed to be in compliance with these provisions for the fiscal year; however, standardized internal control processes did not exist before February 11, 2019 to ensure that reimbursement was for expenditures already incurred and paid prior to receipt of federal funds. This was noted for twenty-five of the sixty reimbursement requests tested, all of which occurred prior to the implementation of the new policies and procedures.Cause: The Department implemented a new process on February 11, 2019. Policies and procedures prior to this date were ineffective to ensure that documentation was maintained to support that each reimbursement request was adequately supported and reviewed prior to request for funds.Effect: The Department may draw funds in excess of the allowable expenses.Recommendation: We recommend that the Department continue to follow the newly implemented policies and procedures.Prior Year Single Audit Report Finding Number: 2018-036Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 163.

ReportingFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over complianceCriteria: Per 2 CFR ? 200.303 Internal controls, the non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: The Department submitted a Schedule of Expenditures of Federal Awards (SEFA) that contained incorrect information for certain awards.Questioned Costs: NoneContext: For one of the two hundred eighteen federal awards within the Department's Research and Development Cluster there was incorrect information noted on the submitted SEFA.Cause: The Department's internal controls failed to identify errors on the SEFA that was submitted.Effect: The Department may report incorrect information on the SEFA.Recommendation: We recommend that the Department strengthen internal controls regarding the preparation and review of their SEFA to ensure such errors are identified and corrected prior to submission.Prior Year Single Audit Report Finding Number: 2018-037Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 164.

Period of PerformanceFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.309 Period of Performance, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ?200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.Condition: The Department charged the federal award for services performed prior to the related award's period of performance.Questioned Costs: UnknownContext: For one of the twenty-five transactions tested with period of performance beginning dates during the fiscal year, it was noted that the cost charged to the award was for services performed prior to the period of performance.Cause: The Department did not timely process the expenditure, resulting in the expenditure incorrectly being charged to the subsequent year grant.Effect: The Department may request reimbursement for expenses not incurred within the period of performance.Recommendation: We recommend that the Department strengthen internal controls to ensure all expenditures charged to a grant are incurred during the award's period of performance.Prior Year Single Audit Finding Number: 2018-033Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 165.

Subrecipient MonitoringFederal Agency: Department of Health and Human ServicesFederal Program Title: HIV Care Formula Grants (Ryan White HIV/AIDS Program Part B)CFDA No.: 93.917Federal Grant ID Number: X08HA32379-01-00; X07HA00038-28-02; X07HA00038-29-00Pass-Through Entity: Not applicableAward Period: VariousType of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 2 CFR ? 200.331 all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the required information at the time of the subaward (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraph (e) of this section, (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in ? 200.207 Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. (f) Verify that every subrecipient is audited as required by Subpart F? Audit Requirements of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501 Audit requirements. (g) Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ? 200.338 Remedies for noncompliance of this part and in program regulations.Condition: The Department did not clearly communicate all of the required information to subrecipients.Questioned Costs: NoneContext: For three of the six subrecipients tested, the subrecipient agreement did not include all of the required information.Cause: The Department does not have the necessary policies and procedures in place regarding subrecipient agreements to facilitate compliance with federal requirements.Effect: The Department is not in compliance with the Federal subrecipient monitoring requirements.Recommendation: We recommend that the Department implement policies and procedures to facilitate compliance with federal subrecipient monitoring requirements.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 166.

Subrecipient MonitoringFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.331 all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the required information at the time of the subaward (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraph (e) of this section, (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in ? 200.207 Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. (f) Verify that every subrecipient is audited as required by Subpart F? Audit Requirements of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501 Audit requirements. (g) Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action againstnoncompliant subrecipients as described in ? 200.338 Remedies for noncompliance of this part and in program regulations.Condition: The Consortium does not have adequate policies and procedures in place regarding subrecipient monitoring to facilitate compliance with federal requirements.Questioned Costs: UnknownContext: For two of the six subrecipients selected for testing, monitoring procedures were not completed to satisfy the federal requirements.Cause: The Consortium has implemented policies and procedures for subrecipient monitoring, however, it was noted that these policies and procedures do not address all federal requirements.Effect: The Consortium is not in compliance with the Federal subrecipient monitoring requirements.Recommendation: We recommend that the Consortium continue to evaluate their current subrecipient monitoring policies and procedures and make revisions to ensure compliance with federal requirements.Prior Year Single Audit Report Finding Number: 2018-038Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 167.

Matching, Level of Effort, Earmarking - Maintenance of EffortFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 45 CFR ? 1321.49 - State agency maintenance of effort. In order to avoid a penalty, each fiscal year the State agency, to meet the required non-federal share applicable to its allotments under this part, shall spend under the State plan for bothservices and administration at least the average amount of State funds it spent under the plan for the three previous fiscal years. If the State agency spends less than this amount, the Commissioner reduces the State's allotments for supportive and nutrition services under this part by a percentage equal to the percentage by which the State reduced its expenditures.Condition: The Department's federal fiscal year 2018 MOE certification was not calculated correctly prior to submission to the federal oversight agency.Questioned Costs: NoneContext: For the period under audit the MOE was not calculated correctly.Cause: Internal controls failed to detect the calculation error prior to the certification submission.Effect: The Department submitted an inaccurate calculation of maintenance of effort on their certification.Recommendation: We recommend that the Department strengthen internal controls to ensure maintenance of effort certifications are calculated correctly prior to submission.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 169.

Subrecipient MonitoringFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 45 CFR ?75.352(a) All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 45 CFR 75.352 (a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section. (c) Consider imposing specific subaward conditions upon a sub-\recipient if appropriate as described in ? 75.207 (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals. (f) Verify that every subrecipient is audited as required by subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 75.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ? 75.371 and in program regulations.Condition: The Department does not have the necessary policies and procedures in place regarding subrecipient monitoring to facilitate compliance with federal requirements.Questioned Costs: UnknownContext: For five of five subrecipients selected for testing, monitoring procedures were not completed to satisfy the federal requirements.Cause: The Department has implemented policies and procedures for subrecipient monitoring, however, it was noted that these policies and procedures do not address all federal requirements.Effect: The Department is not in compliance with the Federal subrecipient monitoring requirements.Recommendation: We recommend that the Department implement policies and procedures to facilitate compliance with federal subrecipient monitoring requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 170.

Activities Allowed or Unallowed and Allowable Costs/ Cost PrinciplesFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 45 ? 75.430 (a) General. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable.Condition: Evidence of the Personnel/Budget Action Request in effect as of the time wages were earned were not maintained or were inconsistent with the amounts charged to the award.Questioned Costs: UnknownContext: For nine of sixty payroll transactions tested, adequate documentation was not received to support the controls in place over allowable costs and cost principles in accordance with federal regulations.Cause: The Department does not have policies and procedures in place to ensure payroll is charged in accordance with federal requirements.Effect: The Department is not in compliance with applicable allowable activities/costs requirements.Recommendation: We recommend that the Department strengthen their internal controls over payroll to ensure compliance with federal requirementsPrior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 170.

Matching, Level of Effort, EarmarkingFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Overall expenditures for administration are limited to the greater of five percent (or $300,000 or $500,000 depending on the aggregate amount appropriated or a lesser amount for the U.S. Territories) of the overall allotment to a State under Title III unless a waiver is granted by the Assistant Secretary for Aging (42 USC 3028 (b)(1), (2), and (3)).Condition: The Department did not adequately track administrative costs charged to the grant.Questioned Costs: UnknownContext: The grant that closed during the audit period was tested for the earmarking requirement. The amount charged to the grant for State Plan administration exceeded the earmarking requirement.Cause: The Department does not have policies and procedures in place to ensure that the earmarking requirements are met.Effect: The Department is not in compliance with the federal earmarking requirements.Recommendation: We recommend that the Department implement internal controls for tracking administrative costs charged to the grant to ensure that the federal requirements are being met.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 171.

ReportingFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: The requirements in 34 CFR ?361.47 and 34 CFR ?361.56, taken together, require State Vocational Rehabilitation agencies to maintain verifying documentation in an individual?s case file, particularly regarding eligibility determinations, development of the individualized plan for employment, services provided, and case closure. Much of this information are key data elements required to be reported on the Case Service Report (RSA-911) to the Rehabilitation Services Administration (RSA).Condition: Key data elements reported on the Commission's RSA-911 performance reports did not agree with underlying case service documentation.Questioned Costs: NoneContext: For one of two RSA-911 performance reports tested, key data reported was contradictory to the supporting documentation.Cause: This finding was noted in the prior year and the Commission developed a corrective action plan. However, due to the timing of the implementation of the plan during part of the year the Commission did not have sufficient internal controls and policies/procedures in place to ensure that all key data reported was in agreement with the underlying documentation.Effect: The Commission may report incorrect information to the Rehabilitation Services Administration.Recommendation: We recommend that the Commission continue to fully implement their corrective action plan prepared in response to the prior year Single Audit finding.Prior Year Single Audit Finding Number: 2018-046Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 172.

ReportingFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: Per 34 CFR ?361.40 (a) Reports. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State agency will submit reports, including reports required under sections 13, 14, and 101(a)(10) of the Act - (i) In the form and level of detail and at the time required by the Secretary regarding applicants for and eligible individuals receiving services, including students receiving pre-employment transition services in accordance with ? 361.48(a); and (ii) In a manner that provides a complete count (other than the information obtained through sampling consistent with section 101(a)(10)(E) of the Act) of the applicants and eligible individuals to - (A) Permit the greatest possible cross-classification of data; and (B) Protect the confidentiality of the identity of each individual. (2) The designated State agency must comply with any requirements necessary to ensure the accuracy and verification of those reports.Condition: Data submitted in the RSA-2 Annual Vocational Rehabilitation Program/Cost Report and SF-425 Federal were not submitted in a timely manner.Questioned Costs: NoneContext: For the one RSA-2 financial report and one SF-425 report tested, it was noted the report submissions were made after the federal due date. While testing the reports, non-material variances were noted between the report and supporting documentation.Cause: The Commission did not have sufficient internal controls and policies/procedures in place to ensure that reports were filed timely. In addition underlying documentation for the SF-425 report included minor inaccuracies.Effect: The Commission may report incorrect information to the Rehabilitation Services Administration and may not submit reports prior to the prescribed due date.Recommendation: We recommend that the Commission implement policies and procedures necessary to ensure that reports include accurate data and are submitted in a timely manner.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 172.

Cash ManagementFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of monitoring and reporting program performance. The Commission should have internal controls designed to ensure compliance with those provisions.Condition: The Commission did not consider the effect of program expenditures that were refunded, resulting in reimbursements exceeding actual expenditures during the respective drawdown period. Per discussion with the Commission refunds are subtracted from the final reimbursement request for the respective grant period.Questioned Costs: UnknownContext: For the three drawdowns made in fiscal year 2019, it was noted that refunded expenditures were not netted against program expenditures to determine the proper reimbursement amount was requested.Cause: As refunds of program expenditures occur the Commission?s procedure is to record these refunds in a revenue account as opposed to an offset to expenditures. For reimbursement requests the Commission?s procedures only consider refunded program expenditures when calculating the final drawdown for the respective grant.Effect: The Commission may drawdown funds in excess of eligible reimbursable expenditures.Recommendation: We recommend that the Commission implement policies and procedures to ensure that refunded expenditure credits are netted against program expenditures prior to drawing down funds. Additionally, it is recommended that the Commission implement policies and procedures to ensure reimbursement requests are submitted timely.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 173.

ReportingFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over complianceCriteria: 2 CFR ? 200.303 Internal controls, the non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: The Commission submitted a Schedule of Expenditures of Federal Awards (SEFA) that contained incorrect information for certain awards.Questioned Costs: NoneContext: For five of the thirty-eight federal awards reported on the Commission?s SEFA there was incorrect information submitted.Cause: The Commission's internal controls failed to identify errors on the SEFA that was submitted.Effect: The commission may report incorrect information on the SEFA.Recommendation: We recommend that the Commission strengthen internal controls regarding the preparation and review of their SEFA to ensure such errors are identified and corrected prior to submission.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 174.

Activities Allowed or Unallowed & Allowable costs/Cost Principles ? Indirect CostsFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 2 CFR ? 225 Appendix A (F) (1) General. Indirect costs are those: Incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. The term ``indirect costs,?? as used herein, applies to costs of this type originating in the grantee department, as well as those incurred by other departments in supplying goods, services, and facilities. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect costs within a governmental unit department or in other agencies providing services to a governmental unit department. Indirect cost pools should be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.Condition: The Commission did not have adequate internal controls and policies/procedures in place to substantiate indirect costs charged to federal awards.Questioned Costs: UnknownContext: For the indirect costs charged to the federal awards, the Commission was not able to substantiate their validity in order to satisfy the testing objectives.Cause: The Commission did not adequately track and is unable to substantiate the calculations for indirect costs charged to federal awards.Effect: The Commission may report inaccurate indirect costs to federal awards.Recommendation: We recommend that the Commission implement internal controls and policies/procedures to substantiate indirect costs charged to federal awards.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 174.

Matching, Level of Effort, Earmarking ? Maintenance of EffortFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Material Weakness in internal control over compliance, material noncomplianceCriteria: Per (29 USC 731(a)(2)(B)) the amount otherwise payable to a State for a fiscal year under this section shall be reduced by the amount by which expenditures from non-Federal sources under the State plan under this subchapter for any previous fiscal year are less than the total of such expenditures for the second fiscal year preceding that previous fiscal year.Condition: The Commission did not comply with the level of effort requirements for maintenance of effort.Questioned Costs: UnknownContext: The Commission did not comply with federally required level of effort ? maintenance of effort.Cause: The Commission did not have sufficient internal controls and policies/procedures in place to ensure that level of effort requirements for maintenance of effort were being monitored and met.Effect: The Commission may not comply with federally required level of effort requirements for maintenance of effort.Recommendation: We recommend that the Commission implement internal controls and policies/procedures to ensure federal level of effort requirements for maintenance of effort are being monitored and met.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 175.

Subrecipient MonitoringFederal Agency: Department of Homeland SecurityFederal Program Title: Disaster Grants ? Public Assistance (Presidentially Declared Disasters)CFDA No.: 97.036Federal Grant ID Number: FEMA-4166-DR-SC; FEMA-4241-DR-SC; FEMA-4286-DR-SC; FEMA-4346-DR-SCPass-Through Entity: Not applicableType of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: 2 CFR 200.331 (d) (1) (2) requires the pass-through entity to review the audit reports required of the subrecipient and follow-up as necessary.Condition: Documentation was not adequate to demonstrate that the pass-through entity verified each applicable subrecipient was audited as required.Questioned Costs: NoneContext: This is a repeat finding from the FY18 Single Audit. For all five subrecipients randomly selected for testing, a Single Audit was completed but documentation did not support that the Single Audit had been timely reviewed by program personnel.Cause: Office documentation requirements lack adequate evidence that Single Audits of all subrecipients were verified and reviewed as required.Effect: The Office may not identify and properly follow up on noncompliance of subrecipients.Recommendation: We recommend that Office policies and procedures ensure that subrecipient monitoring is performed in accordance with federal regulations and clearly supports the collection and review of all required Single Audit reports of its subrecipients.Prior Year Single Audit Finding Number: 2018-040Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 147.

Item 2019-002: Reporting(Material Weakness over Reporting and Non-Material Noncompliance) Condition: The Agency did not submit certain quarterly and annual reports to the United States Department of Labor ("National Office") by the required due dates. Accordingly, the Agency did not comply with the Reporting compliance requirements related to the Unemployment Insurance and the Employment Services Cluster programs. Cause: Internal Controls are not in place to ensure that all required reports are being submitted in accordance with the United States Department of Labor's timelines. Effect: As a result, the Agency becomes more susceptible to having its level of federal award funding reduced by the United States Department of Labor when it violates its Reporting compliance requirements applicable to the Unemployment Insurance and the Employment Services programs. Context: We inspected a sample of quarterly reports and annual reports and noted the following number of exceptions: Unemployment Insurance -One(1) ETA 191 quarterly report; Employment Services Cluster - 3 ETA-9130 quarterly reports. Recommendation: We recommend that management carefully review the terms and conditions included in the supporting grant agreements and the Reporting requirements included in the OMB Compliance Supplement applicable to the Unemployment Insurance and Employment Services Cluster programs.

Allowable Costs/Cost Principles - Federal Share of Recoveries / CollectionsFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid ClusterCFDA No.: 93.775, 93.777, 93.778Federal Grant ID Number: 05-1905SC5MAPPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 42 CFR 433.12 (c), the State is required to credit the Medicaid program for ??overpayments made to Medicaid providers?? In addition, Title 45 Section 2500.6 B of the Centers for Medicare & Medicaid Services? (CMS) State Medicaid Manual states to ??determine the date or period of the expenditure for which the refund is made to establish the [Federal Medical Assistance Percentage] at which the original expenditure was matched by the Federal government. Make refunds of the federal share at the FMAP for which you were reimbursed.?Condition: The Department did not remit the federal share of recoveries and collections to the Medicaid program in accordance with Federal regulations and the State Medicaid Manual.Questioned Costs: UnknownContext: We tested sixty receivables to ensure the Department properly credited the Medicaid program for the federal share of identified overpayments. For one receivable tested, the Department used the incorrect Federal medical assistance percentage to calculate the federal share which resulted in an underpayment of $2 to the federal grantor.This is a repeat finding from the FY18 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY19, this issue has not been fully corrected.Cause: Department personnel used the incorrect period of overpayment calculating and remitting the refunds due to human error. Department personnel further stated that quarterly reviews of randomly selected receivables are performed.Effect: The Department?s control procedures did not detect the errors identified in our testing which could lead to further improper remittances.Recommendation: We recommend the Department strengthen its control procedures to ensure the federal share of recoveries and collections are remitted in accordance with applicable federal and state requirements.Prior Year Single Audit Finding Number: 2018-001Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 149.

Matching, Level of Effort, EarmarkingFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid ClusterCFDA No.: 93.775, 93.777, 93.778Federal Grant ID Number: 05-1905SC5MAPPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 CFR 433.10 (c) (1) states, ?Under Section 1905 (a) (5) of the Act, the Federal share of State expenditures for family planning services is 90 percent.? In addition, the Centers for Medicare & Medicaid Services (CMS) State Medicaid Director Letter 14-003 states in part, ??family planning related services are matched at the states? regular Federal medical assistance percentage.?Condition: The Department was not in compliance with the Federal matching requirement for family planning services or family planning related services.Questioned Costs: NoneContext: We tested sixty individual claims to ensure the Department was in compliance with matching requirements. We determined the Department did not use the proper Federal medical assistance percentage for three of the four contraceptive services selected for testing as well as all (two) of the STI diagnosis services selected for testing.Cause: Department personnel stated that errors within the Medicaid Management Information System (MMIS) as well as the utilization of the improper modifier caused contraceptive services and STI diagnosis services to map to the incorrect internal fund code and Federal medical assistance percentage.Effect: The Department?s control procedures did not detect the errors identified in our testing which could lead to further improper payments.Recommendation: We recommend the Department correct the errors in MMIS to ensure compliance with the Federal matching requirement for family planning services and family planning related services.Prior Year Single Audit Finding Number: 2018-003Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Documentation of EligibilityFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)CFDA No.: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1805SC5MAP, 05-1905SC5MAP; 05-1805SC5021, 05-1905SC5022Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 42 CFR 435.914 (a) states, ?The agency must include in each applicant?s case record facts to support the agency?s decision on his application.? In addition, Section 4.7 of the Department?s Title XIX (Medicaid) State Plan (Maintenance of Records) affirms that it meets the requirements outlined in 42 CFR 431.17 (b), which states, ?A State plan must provide that the Medicaid agency will maintain or supervise the maintenance of records necessary for the proper and efficient operation of the plan.? Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulations apply to both programs.Condition: Eligibility files did not contain adequate documentation to support the Medicaid and CHIP recipients? eligibility statuses.Questioned Costs: UnknownContext: We tested one hundred twenty individual recipients (sixty each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not maintain adequate documentation of eligibility for thirteen Medicaid recipients and eight CHIP recipients.This is a repeat finding from the FY18 Single Audit. The Department stated on its Summary Schedule of Prior Year Audit Findings that this issue was ?Fully Corrected with Previously Reported Corrective Action Implemented?. Due to this issue repeating for FY19, this issue has not been fully corrected.Cause: The Department transitioned to an online eligibility system, the Medicaid Eligibility Determination System (MEDS), in July 2013. According to Department personnel, documentation in some of the paper files may not have been scanned into the system since the transition. For cases opened after the transition, the omissions were due to human error.Effect: The Department could not support eligibility determinations in accordance with its State plan.Recommendation: We recommend the Department maintain documentation to support its eligibility determinations in accordance with its State plan and Federal regulations.Prior Year Single Audit Finding Number: 2018-004Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 150.

Discontinuation of BenefitsFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)CFDA No.: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1805SC5MAP, 05-1905SC5MAP; 05-1805SC5021Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Section 4.32 of the Department?s Title XIX (Medicaid) State Plan (Income and Eligibility Verification System) affirms that it meets the requirements outlined in 42 CFR 435.930 (b), which states in part, ?The agency must?continue to furnish Medicaid regularly to all eligible individuals until they are found to be ineligible.? In addition, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation applies to both programs.Condition: The Department did not consistently discontinue the Medicaid and CHIP benefits of ineligible recipients.Questioned Costs: $22,460Context: We tested one hundred twenty individual recipients (sixty each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not discontinue the benefits of five Medicaid recipients and three CHIP recipients on the dates they became ineligible.Cause: Department personnel stated the closure process for these recipients ultimately was not completed due to backlog in case processing and the continued prioritization of applications.Effect: The Department was not in compliance with applicable eligibility requirements. In addition, Medicaid and CHIP payments were made on behalf of ineligible recipients.Recommendation: We recommend the Department discontinue the Medicaid and CHIP benefits of ineligible recipients in accordance with its State plan and Federal regulations.Prior Year Single Audit Finding Number: 2018-005Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 151.

Annual Eligibility ReviewsFederal Agency: Department of Health and Human ServicesFederal Program Title: Medicaid Cluster; Children?s Health Insurance Program (CHIP)CFDA No.: 93.775, 93.777, 93.778; 93.767Federal Grant ID Number: 05-1805SC5MAP, 05-1905SC5MAP; 05-1805SC5021, 05-1905SC5022Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Section 2.1 of the Department?s Title XIX (Medicaid) State Plan (Application, Determination of Eligibility and Furnishing Medicaid) affirms that it meets the requirements outlined in 42 CFR Part 435.916, which states in part, ?the agency must promptly determine eligibility between regular renewals of eligibility.? In addition, Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual states that the Department must complete an annual review for payment categories 10, 12, 32, 57, 59, 60, 71, and 88. Furthermore, the Department?s Title XXI (CHIP) State Plan attests that CHIP will operate as a Medicaid expansion program; therefore, the aforementioned regulation and policies apply to both programs.Condition: The Department did not consistently perform timely annual eligibility reviews for Medicaid and CHIP recipients in accordance with Section 101.10 of the South Carolina Medicaid Policies and Procedures Manual.Questioned Costs: UnknownContext: We tested one hundred twenty individual recipients (sixty each for Medicaid and CHIP) to ensure the Department was in compliance with applicable eligibility requirements. We determined the Department did not comply with the annual review requirement for fourteen Medicaid recipients (payment categories 10, 12, 32, 57, 59, 60, and 71) and twenty-one CHIP recipients (payment category 88).Cause: Department personnel stated they did not comply with the annual review requirement for these recipients due to backlog in case processing and the continued prioritization of applications.Effect: In the absence of an annual review, Medicaid and CHIP recipients may continue to receive benefits without meeting eligibility requirements.Recommendation: We recommend the Department ensure that eligibility reviews are performed annually in accordance with the South Carolina Medicaid Policies and Procedures Manual.Prior Year Single Audit Finding Number: 2018-006Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 152.

ReportingFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Support EnforcementCFDA No.: 93.563Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Section 454 (24) of the Social Security Act (the Act), as amended, by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), requires states to have an operational automated data processing and information retrieval system for child and spousal support. The system must be in place by October 1, 1997, and meet all the requirements of paragraph (16) of the Act. The secretary of the U.S. Department of Health and Human Services (USDHHS) must approve the system.Condition: The automated data processing and information retrieval system had not been fully implemented during the audit period.Questioned Costs: UnknownContext: As reported in the prior year, the Department did not implement the automated data processing and information retrieval system as required by Section 454 (24) (B) and as a result has been assessed penalty payments for noncompliance. The Department began implementation of the system in State fiscal year 2019, completed implementation shortly after the State fiscal year, and subsequently received Federal approval of the system.Cause: The Department and its contractor were in process of finalizing implementation of the system during State fiscal year 2019.Effect: Prior to the system being fully implemented, certain data necessary for proper completion of the Office of Child Support Enforcement (OCSE) 34A financial report was not available and, as a result, the Department was not in compliance with its Federal requirements during the audit period.Recommendation: We recommend that Department internal controls remain in place and operating to ensure that the Federally approved child support automated data processing and information retrieval system continues to meet all applicable Federal requirements.Prior Year Single Audit Report Finding Number: 2018-011Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 156.

ReportingFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Support EnforcementCFDA No.: 93.563Federal Grant ID Number: 1804SCCSES, 1904SCCESPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 2 CFR ? 200.510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR ? 200.502. Per this section, the schedule must include the total amount provided to subrecipients from each Federal program.Condition: The schedule of expenditures of Federal awards initially prepared by Department management contained several errors, including the incorrect amount of program funds passed through to subrecipients.Questioned Costs: NoneContext: Auditor corrections were necessary for accurate presentation of the schedule of expenditures of Federal awards. In order to agree schedule expenditures to the accounting records, auditor corrections were necessary, including an adjustment in the amount of $3,630,763 to correct the reported subrecipient expenditures.Cause: Management review of the schedule of expenditures of Federal awards failed to detect and correct several presentation errors and accounting transactions that were improperly included in the reported subrecipient expenditure amounts.Effect: Auditor corrections and adjustments were required to correct the schedule of expenditures of Federal awards.Recommendation: We recommend that the Department review procedures for preparing, reviewing and approving its schedule of expenditures of Federal awards to ensure accurate reporting.Prior Year Single Audit Report Finding Number: 2018-014Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Cash ManagementFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Support Enforcement, Social Services Block Grant, Adoption AssistanceCFDA No.: 93.563, 93.667, 93.659Federal Grant ID Number: 1804SCCSES, 1802SCSORSR, 1801SCADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 31 CFR ? 205.12(b)(5) reimbursable funding means that a Federal Program Agency transfers Federal funds to a State after that State has already paid out the funds for Federal assistance program purposes.Condition: Documentation supporting Federal cash draws was not adequate to confirm compliance with cash management requirements.Questioned Costs: NoneContext: Department supporting documentation was not adequate to fully support accurate reimbursement for fifteen of fifteen Federal cash draws tested. In addition two related instances of amounts subsequently being required to be returned to their respective grantors were noted.Cause: Due to staffing turnover, the Department?s internal controls associated with Federal cash draws were not operating effectively to demonstrate compliance and prevent errors.Effect: The Department did not adequately document their Federal cash draw process to demonstrate compliance. Additionally, there were two instances in which the Department returned overdrawn funding to the grantor: one for $781,141 to the Child Support Enforcement program and another for $121,539 to the Adoption Assistance program.Recommendation: We recommend that the Department review its internal controls over the Federal cash draws process to ensure compliance with cash management requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Reporting/Level of EffortFederal Agency: Department of Health and Human ServicesFederal Program Title: Social Services Block Grant, Adoption AssistanceCFDA No.: 93.667, 93.659Federal Grant ID Number: 1802SCSOSR, 1801SCADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.342 requires compliance with the provisions of monitoring and reporting program performance. The Department's internal controls should be designed to ensure compliance with those provisions.42 U.S.C. ? 673(a)(8) outlines the level of effort requirements for adoption savings.Condition: An annual federal financial report, SF-425, and two quarterly CB-496 reports were submitted with financial and statistical errors.Questioned Costs: NoneContext: For one of two annual SF-425 reports selected for testing, incorrect amounts were reported for Federal cash receipts and cash disbursements. Receipts occurring after the report date were included on the cash basis report and total Federal funds authorized were mistakenly reported as disbursements.For both CB-496 reports selected for testing, administrative costs ? non-recurring were reported with administrative costs ? agency, rather than separately as required by the report instructions. In addition, discrepancies were noted between the supporting documentation and number of payments for children assisted reported in Part 1, Section D of the report. Finally, in Part 4 of the report, discrepancies were noted when agreeing to data used to calculate amounts reported on lines 3 and 5 and the Department was unable to provide support for the amount reported on line 10. Because of the relationship of the amount on line 10 to level of effort compliance, level of effort compliance could not be confirmed.Cause: The Department?s internal controls failed to detect the errors prior to submission of the reports.Effect: Federal cash receipts and cash disbursements were overstated on the SF-425 report.All administrative costs ? non-recurring were misclassified as administrative costs ? agency on each of the two CB-496 reports tested. Certain amounts reported in Part 1, Section D, and in Part 4 of the report could not be validated.Recommendation: We recommend that the Department strengthen its internal controls and processes to ensure that Federal reports are free from error and clearly supported prior to submission of the report.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 157.

Activities Allowed or UnallowedFederal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceCFDA No.: 93.659Federal Grant ID Number: 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2018 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 1356 identifies the allowable activities of the Adoption Assistance grant program.Condition: A Department case service expenditure unrelated to the Adoption Assistance program was charged to the grant.Questioned Costs: $3,345Context: One of sixty expenditures selected for testing was for an activity not related to the Adoption Assistance program.Cause: The Department?s internal controls failed to prevent an improper charge to the grant.Effect: Program funds were used to pay a claim that was not allowable in accordance with federal regulations.Recommendation: We recommend that the Department strengthen its internal controls and processes to ensure that all charges to the grant are for allowable activities only.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 158.

Allowable Costs/Cost PrinciplesFederal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceCFDA No.: 93.659Federal Grant ID Number: 1801SCADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 75.405(d) addresses the requirements and guidance for the allocation of direct costs applicable to multiple projects.Condition: Allowable training costs charged to the program were not adequately supported.Questioned Costs: $73,338Context: Seven of eight administrative and training disbursement transactions selected for testing were for allowable training costs benefitting multiple grant programs. The Department?s allocation of the cost, and related cost share, to the various grant programs was not adequately supported.Cause: Training costs benefitting multiple programs were charged using a previously determined rate without updating the charge to match the actual proportional benefit to each program.Effect: The potential for overcharging the grant exists when costs are charged to the programs without documenting the proportional benefit in accordance with the federal regulations.Recommendation: We recommend the Department update internal controls for charging direct training costs benefitting multiple programs to ensure that the costs charged only reflect the net proportional benefit applicable to each program.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 158.

EligibilityFederal Agency: Department of Health and Human ServicesFederal Program Title: Adoption AssistanceCFDA No.: 93.659Federal Grant ID Number: 1801ASADPT, 1901SCADPTPass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2019Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: 45 CFR ? 75.361 outlines record retention requirements of the non-Federal entity pertinent to the Federal award.45 CFR ? 1356.40(b) outlines the requirements pertaining to signed adoption agreements.42 U.S.C. ? 673(a) outlines eligibility requirements for subsidy payments.42 U.S.C. ? 675(8) expands eligibility requirements for children over the age of 18.Condition: Eligibility could not be confirmed for some payments tested.Questioned Costs: $2,346Context: Sixty payments were selected for testing of eligibility compliance. The adoption subsidy agreement on file for four of those payments was not signed in accordance with the federal regulations, and one of those files lacked any additional documentation to verify eligibility. For another payment tested, the subsidy payment exceeded the amount documented on the adoption subsidy agreement. In addition, documentation was not adequate to support three subsidy payments tested for eligible children no longer under the age of eighteen at the time of the payment.Cause: Documentation in some case files was not adequate to support the applicable subsidy payments.Effect: Eligibility, in accordance with federal and/or Department requirements, could not be confirmed for some subsidy payments.Recommendation: We recommend that the Department review eligibility file controls to ensure that all payments are adequately supported throughout the eligibility period.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Period of PerformanceFederal Agency: Department of Health and Human ServicesFederal Program Title: Child Care and Development FundCFDA No.: 93.575, 93.596Federal Grant ID Number: 1701SCCCDFPass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2018Type of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: 45 CFR ? 98.60(d)(3) states, both the Federal and non-Federal share of the Matching Fund shall be obligated in the fiscal year in which the funds are granted and liquidated no later than the end of the succeeding fiscal year.Condition: Matching funds charged to the grant were liquidated after the end of the succeeding fiscal year of the grant.Questioned Costs: UndeterminedContext: One of five transactions selected for testing was a journal entry which traced back to disbursement transactions that were liquidated after the end of the liquidation period of the grant.Cause: The Department?s internal controls failed to identify and prevent the liquidation of funds after the allowed period.Effect: Expenditures may be charged to the grant that are outside the allowed period of performance.Recommendation: We recommend that the Department strengthen internal controls to ensure that all awarded funds are liquidated within the award?s period of performance.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 159.

Subrecipient MonitoringFederal Agency: Department of Health and Human ServicesFederal Program Title: Prevention and Treatment of Substance AbuseCFDA No.: 93.959Federal Grant ID Number: J2001SAPBG17, J2001SAPBG18, J2001SAPBG19Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 45 CFR ?75.352(a) All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 45 CFR 75.352 (a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward.Condition: The Department communicates grant and program information to each subrecipient annually through a standardized contracting agreement, however not all of the required information is included in the process.Questioned Costs: NoneContext: For eight of eight subrecipients tested, subaward documents did not include all of the federally required information.Cause: The Department?s internal controls failed to ensure adequate communications to the subrecipients through the annual subaward process as required by the federal regulations.Effect: The Department is not in compliance with the requirements for pass-through entities.Recommendation: We recommend that the Department update subrecipient agreements to incorporate all of the required information to ensure adequate communication to their subrecipients.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 161.

Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesFederal Agency: Department of Health and Human ServicesFederal Program Title: Prevention and Treatment of Substance AbuseCFDA No.: 93.959Federal Grant ID Number: J2001SAPBG18, J2001SAPBG19Pass-Through Entity: Not applicableAward Period: October 1, 2017 through September 30, 2020Type of Finding: Material Weakness in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.430 (a) Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.Condition: The Department did not have adequately functioning controls over time and effort reporting to ensure timesheets were reviewed by a direct supervisor and supporting evidence was maintained.Questioned Costs: UnknownContext: For nineteen of forty payroll transactions tested, employee time and effort review and approval documentation was not maintained in order to adequately support control process.Cause: The Department did not maintain documentation of direct supervisor review and approval of time and effort.Effect: The Department is not in compliance with applicable allowable activities/costs requirements.Recommendation: We recommend that the Department implement policies and procedures to ensure that sufficient documentation of reviews and approvals are maintained.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 161.

Cash ManagementFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 31 CFR ? 205.12(c)(5) Reimbursable funding means that a Federal Program Agency transfers Federal funds to a State after that State has already paid out the funds for Federal assistance program purposes.Condition: For the full fiscal year, the Department did not have an internal control process in place to ensure that reimbursement requests sent to the federal cognizant agency were fully supported by expenditures previously paid out by the state.Questioned Costs: NoneContext: The Department was deemed to be in compliance with these provisions for the fiscal year; however, standardized internal control processes did not exist before February 11, 2019 to ensure that reimbursement was for expenditures already incurred and paid prior to receipt of federal funds. This was noted for twenty-five of the sixty reimbursement requests tested, all of which occurred prior to the implementation of the new policies and procedures.Cause: The Department implemented a new process on February 11, 2019. Policies and procedures prior to this date were ineffective to ensure that documentation was maintained to support that each reimbursement request was adequately supported and reviewed prior to request for funds.Effect: The Department may draw funds in excess of the allowable expenses.Recommendation: We recommend that the Department continue to follow the newly implemented policies and procedures.Prior Year Single Audit Report Finding Number: 2018-036Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 163.

ReportingFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over complianceCriteria: Per 2 CFR ? 200.303 Internal controls, the non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: The Department submitted a Schedule of Expenditures of Federal Awards (SEFA) that contained incorrect information for certain awards.Questioned Costs: NoneContext: For one of the two hundred eighteen federal awards within the Department's Research and Development Cluster there was incorrect information noted on the submitted SEFA.Cause: The Department's internal controls failed to identify errors on the SEFA that was submitted.Effect: The Department may report incorrect information on the SEFA.Recommendation: We recommend that the Department strengthen internal controls regarding the preparation and review of their SEFA to ensure such errors are identified and corrected prior to submission.Prior Year Single Audit Report Finding Number: 2018-037Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 164.

Period of PerformanceFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.309 Period of Performance, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ?200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.Condition: The Department charged the federal award for services performed prior to the related award's period of performance.Questioned Costs: UnknownContext: For one of the twenty-five transactions tested with period of performance beginning dates during the fiscal year, it was noted that the cost charged to the award was for services performed prior to the period of performance.Cause: The Department did not timely process the expenditure, resulting in the expenditure incorrectly being charged to the subsequent year grant.Effect: The Department may request reimbursement for expenses not incurred within the period of performance.Recommendation: We recommend that the Department strengthen internal controls to ensure all expenditures charged to a grant are incurred during the award's period of performance.Prior Year Single Audit Finding Number: 2018-033Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 165.

Subrecipient MonitoringFederal Agency: Department of Health and Human ServicesFederal Program Title: HIV Care Formula Grants (Ryan White HIV/AIDS Program Part B)CFDA No.: 93.917Federal Grant ID Number: X08HA32379-01-00; X07HA00038-28-02; X07HA00038-29-00Pass-Through Entity: Not applicableAward Period: VariousType of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 2 CFR ? 200.331 all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the required information at the time of the subaward (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraph (e) of this section, (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in ? 200.207 Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. (f) Verify that every subrecipient is audited as required by Subpart F? Audit Requirements of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501 Audit requirements. (g) Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ? 200.338 Remedies for noncompliance of this part and in program regulations.Condition: The Department did not clearly communicate all of the required information to subrecipients.Questioned Costs: NoneContext: For three of the six subrecipients tested, the subrecipient agreement did not include all of the required information.Cause: The Department does not have the necessary policies and procedures in place regarding subrecipient agreements to facilitate compliance with federal requirements.Effect: The Department is not in compliance with the Federal subrecipient monitoring requirements.Recommendation: We recommend that the Department implement policies and procedures to facilitate compliance with federal subrecipient monitoring requirements.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 166.

Subrecipient MonitoringFederal Agency: VariousFederal Program Title: Research and Development ClusterCFDA No.: VariousFederal Grant ID Number: VariousPass-Through Entity: VariousAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR ? 200.331 all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the required information at the time of the subaward (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraph (e) of this section, (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in ? 200.207 Specific conditions. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. (f) Verify that every subrecipient is audited as required by Subpart F? Audit Requirements of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501 Audit requirements. (g) Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. (h) Consider taking enforcement action againstnoncompliant subrecipients as described in ? 200.338 Remedies for noncompliance of this part and in program regulations.Condition: The Consortium does not have adequate policies and procedures in place regarding subrecipient monitoring to facilitate compliance with federal requirements.Questioned Costs: UnknownContext: For two of the six subrecipients selected for testing, monitoring procedures were not completed to satisfy the federal requirements.Cause: The Consortium has implemented policies and procedures for subrecipient monitoring, however, it was noted that these policies and procedures do not address all federal requirements.Effect: The Consortium is not in compliance with the Federal subrecipient monitoring requirements.Recommendation: We recommend that the Consortium continue to evaluate their current subrecipient monitoring policies and procedures and make revisions to ensure compliance with federal requirements.Prior Year Single Audit Report Finding Number: 2018-038Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 167.

Matching, Level of Effort, Earmarking - Maintenance of EffortFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Per 45 CFR ? 1321.49 - State agency maintenance of effort. In order to avoid a penalty, each fiscal year the State agency, to meet the required non-federal share applicable to its allotments under this part, shall spend under the State plan for bothservices and administration at least the average amount of State funds it spent under the plan for the three previous fiscal years. If the State agency spends less than this amount, the Commissioner reduces the State's allotments for supportive and nutrition services under this part by a percentage equal to the percentage by which the State reduced its expenditures.Condition: The Department's federal fiscal year 2018 MOE certification was not calculated correctly prior to submission to the federal oversight agency.Questioned Costs: NoneContext: For the period under audit the MOE was not calculated correctly.Cause: Internal controls failed to detect the calculation error prior to the certification submission.Effect: The Department submitted an inaccurate calculation of maintenance of effort on their certification.Recommendation: We recommend that the Department strengthen internal controls to ensure maintenance of effort certifications are calculated correctly prior to submission.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 169.

Subrecipient MonitoringFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 45 CFR ?75.352(a) All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all of the information required by 45 CFR 75.352 (a)(1)(i-xiii) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section. (c) Consider imposing specific subaward conditions upon a sub-\recipient if appropriate as described in ? 75.207 (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals. (f) Verify that every subrecipient is audited as required by subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 75.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in ? 75.371 and in program regulations.Condition: The Department does not have the necessary policies and procedures in place regarding subrecipient monitoring to facilitate compliance with federal requirements.Questioned Costs: UnknownContext: For five of five subrecipients selected for testing, monitoring procedures were not completed to satisfy the federal requirements.Cause: The Department has implemented policies and procedures for subrecipient monitoring, however, it was noted that these policies and procedures do not address all federal requirements.Effect: The Department is not in compliance with the Federal subrecipient monitoring requirements.Recommendation: We recommend that the Department implement policies and procedures to facilitate compliance with federal subrecipient monitoring requirements.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 170.

Activities Allowed or Unallowed and Allowable Costs/ Cost PrinciplesFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 45 ? 75.430 (a) General. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable.Condition: Evidence of the Personnel/Budget Action Request in effect as of the time wages were earned were not maintained or were inconsistent with the amounts charged to the award.Questioned Costs: UnknownContext: For nine of sixty payroll transactions tested, adequate documentation was not received to support the controls in place over allowable costs and cost principles in accordance with federal regulations.Cause: The Department does not have policies and procedures in place to ensure payroll is charged in accordance with federal requirements.Effect: The Department is not in compliance with applicable allowable activities/costs requirements.Recommendation: We recommend that the Department strengthen their internal controls over payroll to ensure compliance with federal requirementsPrior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 170.

Matching, Level of Effort, EarmarkingFederal Agency: Department of Health and Human ServicesFederal Program Title: Aging ClusterCFDA No.: 93.044, 93.045, 93.053Federal Grant ID Number: VariousPass-Through Entity: Not applicableAward Period: VariousType of Finding: Significant deficiency in internal control over compliance, other mattersCriteria: Overall expenditures for administration are limited to the greater of five percent (or $300,000 or $500,000 depending on the aggregate amount appropriated or a lesser amount for the U.S. Territories) of the overall allotment to a State under Title III unless a waiver is granted by the Assistant Secretary for Aging (42 USC 3028 (b)(1), (2), and (3)).Condition: The Department did not adequately track administrative costs charged to the grant.Questioned Costs: UnknownContext: The grant that closed during the audit period was tested for the earmarking requirement. The amount charged to the grant for State Plan administration exceeded the earmarking requirement.Cause: The Department does not have policies and procedures in place to ensure that the earmarking requirements are met.Effect: The Department is not in compliance with the federal earmarking requirements.Recommendation: We recommend that the Department implement internal controls for tracking administrative costs charged to the grant to ensure that the federal requirements are being met.Prior Year Single Audit Report Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 171.

ReportingFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: The requirements in 34 CFR ?361.47 and 34 CFR ?361.56, taken together, require State Vocational Rehabilitation agencies to maintain verifying documentation in an individual?s case file, particularly regarding eligibility determinations, development of the individualized plan for employment, services provided, and case closure. Much of this information are key data elements required to be reported on the Case Service Report (RSA-911) to the Rehabilitation Services Administration (RSA).Condition: Key data elements reported on the Commission's RSA-911 performance reports did not agree with underlying case service documentation.Questioned Costs: NoneContext: For one of two RSA-911 performance reports tested, key data reported was contradictory to the supporting documentation.Cause: This finding was noted in the prior year and the Commission developed a corrective action plan. However, due to the timing of the implementation of the plan during part of the year the Commission did not have sufficient internal controls and policies/procedures in place to ensure that all key data reported was in agreement with the underlying documentation.Effect: The Commission may report incorrect information to the Rehabilitation Services Administration.Recommendation: We recommend that the Commission continue to fully implement their corrective action plan prepared in response to the prior year Single Audit finding.Prior Year Single Audit Finding Number: 2018-046Views of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 172.

ReportingFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: Per 34 CFR ?361.40 (a) Reports. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State agency will submit reports, including reports required under sections 13, 14, and 101(a)(10) of the Act - (i) In the form and level of detail and at the time required by the Secretary regarding applicants for and eligible individuals receiving services, including students receiving pre-employment transition services in accordance with ? 361.48(a); and (ii) In a manner that provides a complete count (other than the information obtained through sampling consistent with section 101(a)(10)(E) of the Act) of the applicants and eligible individuals to - (A) Permit the greatest possible cross-classification of data; and (B) Protect the confidentiality of the identity of each individual. (2) The designated State agency must comply with any requirements necessary to ensure the accuracy and verification of those reports.Condition: Data submitted in the RSA-2 Annual Vocational Rehabilitation Program/Cost Report and SF-425 Federal were not submitted in a timely manner.Questioned Costs: NoneContext: For the one RSA-2 financial report and one SF-425 report tested, it was noted the report submissions were made after the federal due date. While testing the reports, non-material variances were noted between the report and supporting documentation.Cause: The Commission did not have sufficient internal controls and policies/procedures in place to ensure that reports were filed timely. In addition underlying documentation for the SF-425 report included minor inaccuracies.Effect: The Commission may report incorrect information to the Rehabilitation Services Administration and may not submit reports prior to the prescribed due date.Recommendation: We recommend that the Commission implement policies and procedures necessary to ensure that reports include accurate data and are submitted in a timely manner.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 172.

Cash ManagementFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over compliance, other mattersCriteria: Per 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of monitoring and reporting program performance. The Commission should have internal controls designed to ensure compliance with those provisions.Condition: The Commission did not consider the effect of program expenditures that were refunded, resulting in reimbursements exceeding actual expenditures during the respective drawdown period. Per discussion with the Commission refunds are subtracted from the final reimbursement request for the respective grant period.Questioned Costs: UnknownContext: For the three drawdowns made in fiscal year 2019, it was noted that refunded expenditures were not netted against program expenditures to determine the proper reimbursement amount was requested.Cause: As refunds of program expenditures occur the Commission?s procedure is to record these refunds in a revenue account as opposed to an offset to expenditures. For reimbursement requests the Commission?s procedures only consider refunded program expenditures when calculating the final drawdown for the respective grant.Effect: The Commission may drawdown funds in excess of eligible reimbursable expenditures.Recommendation: We recommend that the Commission implement policies and procedures to ensure that refunded expenditure credits are netted against program expenditures prior to drawing down funds. Additionally, it is recommended that the Commission implement policies and procedures to ensure reimbursement requests are submitted timely.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 173.

ReportingFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Significant Deficiency in internal control over complianceCriteria: 2 CFR ? 200.303 Internal controls, the non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ``Standards for Internal Control in the Federal Government?? issued by the Comptroller General of the United States and the ``Internal Control Integrated Framework??, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition: The Commission submitted a Schedule of Expenditures of Federal Awards (SEFA) that contained incorrect information for certain awards.Questioned Costs: NoneContext: For five of the thirty-eight federal awards reported on the Commission?s SEFA there was incorrect information submitted.Cause: The Commission's internal controls failed to identify errors on the SEFA that was submitted.Effect: The commission may report incorrect information on the SEFA.Recommendation: We recommend that the Commission strengthen internal controls regarding the preparation and review of their SEFA to ensure such errors are identified and corrected prior to submission.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 174.

Activities Allowed or Unallowed & Allowable costs/Cost Principles ? Indirect CostsFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Material weakness in internal control over compliance, material noncomplianceCriteria: Per 2 CFR ? 225 Appendix A (F) (1) General. Indirect costs are those: Incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. The term ``indirect costs,?? as used herein, applies to costs of this type originating in the grantee department, as well as those incurred by other departments in supplying goods, services, and facilities. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect costs within a governmental unit department or in other agencies providing services to a governmental unit department. Indirect cost pools should be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.Condition: The Commission did not have adequate internal controls and policies/procedures in place to substantiate indirect costs charged to federal awards.Questioned Costs: UnknownContext: For the indirect costs charged to the federal awards, the Commission was not able to substantiate their validity in order to satisfy the testing objectives.Cause: The Commission did not adequately track and is unable to substantiate the calculations for indirect costs charged to federal awards.Effect: The Commission may report inaccurate indirect costs to federal awards.Recommendation: We recommend that the Commission implement internal controls and policies/procedures to substantiate indirect costs charged to federal awards.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 174.

Matching, Level of Effort, Earmarking ? Maintenance of EffortFederal Agency: Department of EducationFederal Program Title: Rehabilitation Services-Vocational Rehabilitation Grants to StatesCFDA No.: 84.126Federal Grant ID Number: H126A170061; H126A180061; H126A190061Pass-Through Entity: Not applicableAward Period: October 1, 2016 through September 30, 2020Type of Finding: Material Weakness in internal control over compliance, material noncomplianceCriteria: Per (29 USC 731(a)(2)(B)) the amount otherwise payable to a State for a fiscal year under this section shall be reduced by the amount by which expenditures from non-Federal sources under the State plan under this subchapter for any previous fiscal year are less than the total of such expenditures for the second fiscal year preceding that previous fiscal year.Condition: The Commission did not comply with the level of effort requirements for maintenance of effort.Questioned Costs: UnknownContext: The Commission did not comply with federally required level of effort ? maintenance of effort.Cause: The Commission did not have sufficient internal controls and policies/procedures in place to ensure that level of effort requirements for maintenance of effort were being monitored and met.Effect: The Commission may not comply with federally required level of effort requirements for maintenance of effort.Recommendation: We recommend that the Commission implement internal controls and policies/procedures to ensure federal level of effort requirements for maintenance of effort are being monitored and met.Prior Year Single Audit Finding Number: Not applicableViews of Responsible Offices and Corrective Action Plan: Management agrees with the finding. See Corrective Action Plan at page 175.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION