County of MendocinoLocal Government

months and ensure verification of information through appropriate systems such as the Income and Eligibility Verification System (IEVS). For non-MAGI beneficiaries, states must renew eligibility at least once every 12 months as described in the Medicaid state plan. Condition: During review of 40 eligibility determinations and redeterminations, we identified two exceptions: one case lacked documentation of IEVS reports required to verify income and eligibility information, and another case had a redetermination completed more than 12 months prior to the active eligibility date, which does not comply with the annual redetermination requirement under 42 CFR 435.916. Questioned costs: None Context: The Medical Assistance Program requires counties to maintain robust eligibility controls to ensure benefits are provided only to qualified individuals. These controls include verifying income and eligibility through systems such as the Income and Eligibility Verification System (IEVS) and conducting annual redeterminations within 12 months of the active eligibility date. Out of 40 eligibility determinations and redeterminations, there are two cases where these controls were not properly implemented, indicating a significant deficiency in internal control. Cause: The deficiencies occurred due to inadequate monitoring and enforcement of established eligibility control procedures by program staff. Effect: Failure to properly implement eligibility controls increases the risk that ineligible individuals may receive benefits under the Medical Assistance Program, potentially resulting in noncompliance with federal requirements and questioned costs. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends that the County strengthen monitoring procedures to ensure that Income and Eligibility Verification System (IEVS) reports are obtained and retained for all eligibility determinations, implement controls to verify that redeterminations are completed within the required 12- month timeframe prior to the active eligibility date, and provide staff training on compliance requirements and proper documentation standards to reinforce adherence to established policies. Views of responsible officials: There is no disagreement with the audit finding.

Criteria: Per OMB Compliance Supplement 93.558, Compliance Requirement E, 1b(1): Counties must ensure TANF benefits are not provided beyond the 60-month lifetime limit unless an exemption applies (e.g., hardship or extreme cruelty documented under aid code 33). Controls should exist to track cumulative months and terminate benefits when the limit is reached unless proper documentation supports an exemption. Condition: During testing of 40 sampled cases, 1 case was identified where aid code 30 was charged after the 60-month lifetime limit. The noncompliant payments occurred in December 2024, January 2025, and February 2025, totaling $2,652. Questioned costs: $2,652 Context: The TANF program provides temporary financial assistance to eligible families and imposes a 60-month lifetime limit on aid unless an exemption applies, such as hardship or extreme cruelty documented under aid code 33. Counties must monitor cumulative months of aid and terminate benefits when the limit is reached unless proper documentation supports an exemption. In our review of 40 cases, controls generally existed to track the limit and apply exemptions; however, one case continued under aid code 30 beyond the 60-month limit, resulting in noncompliant payments totaling $2,652 for December 2024 through February 2025. Cause: Although controls exist to track the 60-month limit, they were not properly implemented in this instance, allowing benefits to continue beyond the allowable period. Effect: Improper payment of $2,652, which is not material to the program but represents a significant deficiency in internal control. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommends the County strengthen monitoring controls to ensure benefits are terminated promptly upon reaching the 60-month limit unless valid exemptions are documented, implement periodic system audits to detect and prevent similar errors, provide staff training on proper coding and documentation for exemptions such as aid code 33 for hardship or extreme cruelty, and recover improper payments where feasible while reporting corrective actions to the State Department of Social Services. Views of responsible officials: There is no disagreement with the audit finding.

We were unable to test $253,601 of payroll expenditures charged to the program for allowable , resulting in a scope limitation. Sufficient records of time charges and controls over program payroll were not available at the time of our test work.

Federal agency: U.S Department of Health and Human Services Federal program title: Medical Assistance Program ALN: 93.778 Pass-Through Agency: California Department of Health Care Services Award Period: July 1, 2020 ? June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance ? Other Noncompliance Criteria or specific requirement: The compliance supplement notes in section E part 1 that the agency is required to determine client eligibility in accordance with eligibility requirements defined in the approved State plan. Condition: During our audit procedures over eligibility, we found that in some cases not all requirements necessary to determine eligibility had been documented and completed before granting benefits. Questioned costs: None noted. Context: CLA randomly selected forty casefiles to test eligibility compliance for Medical Assistance program in a statistically valid sample. CLA noted four of the forty casefiles were not in compliance as three cases did not have the IEVS form required by the State and one case did not contain documentation of immigration status. Cause: IEVS reports and immigration documentation were not obtained prior to granting benefits. Effect: Participants received benefits without having met all necessary requirements to make an eligibility determination. Repeat Finding: Not a repeat finding. Recommendation: CLA recommends that the County develop procedures to ensure that all participants casefiles are reviewed yearly to make certain that all eligibility criteria has been met and documented. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S Department of the Treasury Federal program title: COVID-19 Coronavirus Relief Fund ALN: 21.019 Pass-Through Agency: None Award Period: July 1, 2020 ? June 30, 2021 Type of Finding: Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: Each prime recipient of the Coronavirus Relief Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the portal for the program. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Condition: Audit procedures could not be performed over reporting compliance because records of reports submitted were not retained. Questioned costs: None noted. Context: The program files quarterly reports four times a year. None of the reports filed during the fiscal year were retained. Cause: Records of reports filed for the program were not retained and as a result compliance testing could not be performed. Effect: Compliance with the reporting requirement for the program could not be verified. Repeat Finding: Not a repeat finding. Recommendation: CLA recommends that County implement procedures to ensure that any reports filed for the grant program are retained. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S Department of Health and Human Services Federal program title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) ALN: 93.323 Pass-Through Agency: State Department of Health and Human Services Award Period: July 1, 2020 ? June 30, 2021 Type of Finding: Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: Expenditures are incurred during allowable period. Funding for ELC Enhancing Detection Expansion is covered for the period beginning January 15, 2021 through July 31, 2023. Condition: During our audit procedures over Period of Performance we found that in some cases expenditures were being charged to ELC Enhancing Detection Expansion from outside the covered grant period. Questioned costs: Known questioned costs were $14,204. Likely questioned costs are estimated to be $193,000. Context: CLA randomly selected forty non payroll transactions to test compliance with the ELC Enhancing Detection Expansion grant agreement. CLA noted four of the forty selections were incurred before the grant start date of January 15, 2021. Cause: Program is new and procedures weren?t fully established to allow prevention of noncompliance. Effect: Costs were charged to the grant outside of the allowable period. Repeat Finding: Not a repeat finding. Recommendation: CLA recommends that the County develop procedures to ensure that program staff are knowledgeable on program requirements and transactions are being reviewed based on funding requirements. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S Department of Health and Human Services Federal program title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) ALN: 93.323 Pass-Through Agency: State Department of Health and Human Services Award Period: July 1, 2020 ? June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Payroll expenditures are prepared and submitted by employees and independently reviewed by supervisor as part of the program?s internal controls. Condition: During our audit procedures over payroll disbursements we found that in some cases timesheets were submitted by the supervisors for employees which doesn?t allow for the segregation of duties necessary for an independent review of the timesheets. Questioned costs: None noted. Context: CLA randomly selected 40 payroll disbursements to test based on allowable costs for the ELC grant. CLA noted that 9 transactions of the 40 were submitted by the supervisor and not the employee. Cause: The program is new and procedures weren?t fully established. Effect: Payroll charged to the grant wasn?t processed in accordance with internal control policies. Repeat Finding: Not a repeat finding. Recommendation: CLA recommends that the County require employees to prepare and submit their own timecards allowing supervisors to perform an independent review. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S Department of Health and Human Services Federal program title: Medical Assistance Program CFDA Number: 93.778 Pass-Through Agency: California Department of Health Care Services Award Period: July 1, 2019 ? June 30, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Noncompliance Criteria or specific requirement: The compliance supplement notes in section E part 1 that the agency is required to determine client eligibility in accordance with eligibility requirements defined in the approved State plan. Annual redeterminations are required as part of these eligibility requirements. Condition: During eligibility compliance testing, four of forty case files selected documented eligibility redeterminations late or did not document a current eligibility determination during the fiscal year. Questioned costs: None noted. Context: CLA randomly selected forty casefiles to test eligibility compliance for Medical Assistance program. Sample was a statistically valid sample. CLA noted four of the forty casefiles were not in compliance as cases did not have current renewals performed or were performed well past the annual due date. Three of the four case delays appeared to be due to the Public Health Emergency. The state of California granted a waiver of compliance for delays due to the Public Health Emergency. Cause: The cause for three of the four delayed cases in the noted finding is related to the Public Health Emergency. Effect: The effect is that participants in the program are not having eligibility renewals completed could be receiving benefits for which they are no longer be eligible. Repeat Finding: Repeat finding from prior year, finding 2019-001. Recommendation: CLA recommends that the County focus on casefiles with due and overdue redeterminations to reduce backlog and become current with renewals. Views of responsible officials: There is no disagreement with the audit finding.

2019 ? 001 Federal agency: U.S Department of Health and Human Services Federal program title: Medical Assistance Program CFDA Number: 93.778 Pass-Through Agency: California Department of Health Care Services Award Period: July 1, 2018 ? June 30, 2019 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Other Noncompliance Criteria or specific requirement: The compliance supplement notes in section E part 1 that the agency is required to determine client eligibility in accordance with eligibility requirements defined in the approved State plan. Annual redeterminations are required as part of these eligibility requirements. Condition: During eligibility compliance testing, two of forty case files selected documented eligibility redeterminations late or did not document a current eligibility determination during the fiscal year. Questioned costs: None noted. Context: CLA randomly selected forty casefiles to test eligibility compliance for Medical Assistance program. Sample was a statistically valid sample. CLA noted two of the forty casefiles were not in compliance as cases did not have current renewals performed or were performed well past the annual due date. The findings noted appeared to be systemic due to the staffing vacancies the Department has been experiencing over the last few years. Cause: The cause of the noted finding is related to the vacancies of eligibility workers at the County during the last few years. Resulting in a significant backlog of redeterminations. Effect: The effect is that participants in the program are not having eligibility renewals completed could be receiving benefits that they may no longer be eligible for. Repeat Finding: Repeat finding from prior year, finding 2018-002. Recommendation: CLA recommends that the County focus on casefiles with due and overdue redeterminations to reduce backlog and become current with renewals. Views of responsible officials: There is no disagreement with the audit finding.

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