EIN: 956000928
UEI: Z27AVTCCKHU3
Audited by: EIDE BAILLY LLP
Cognizant agency: 14 [Department of Housing and Urban Development]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 30, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 30, 2026 (26 days from today).
What is a management decision? →During our audit procedures performed over the SEFA we noted the following: • The Sheriff-Coroner Department did not properly identify the amount expended for the Congressionally Recommended Awards, AL No. 16.753. The expenditures reported by the Department were overstated by $2,638,516. • The Orange County Community Resources Department did not properly identify the amount of Federal funding passed through to subrecipients for the HOME Investment Partnerships Program, AL No. 14.239. The amount passed through to subrecipients reported by the Department was overstated by $4,500,624. • The Sheriff-Coroner Department did not properly identify the amounts expended for the Homeland Security Grant Program, AL No. 97.067. The expenditures reported by the Department were overstated by $715,489. • The Orange County Health Care Agency (HCA) did not properly identify the amount expended for the Epidemiology and Laboratory Capacity for Infectious Disease program, AL No. 93.323. The expenditures reported by the Agency were overstated by $486,000. Cause: As a result, the County lacked adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the County’s processes for recording and tracking expenditures of Federal awards are not designed so that expenditures are identified when incurred. In addition, the County’s processes for identifying and reporting subrecipients are not designed to ensure appropriate reporting on the SEFA. Effect: Adjustments to the SEFA were required. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Finding from Prior Years: No. Recommendation: The County, including all its reporting departments, should follow existing policies, procedures and internal controls to ensure all expenditures and amounts passed through to subrecipients are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Congressionally Recommended Awards / HOME Investment Partnerships Program / Homeland Security Grant Program / Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 16.753 / 14.239 / 97.067 / 93.323 Federal Grantor: U.S. Department of Justice / U.S. Department of Housing and Urban Development / U.S. Department of Homeland Security / U.S. Department of Health and Human Services Award No. and Year: Multiple Compliance Requirements: Other – Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. §200.331 of the Uniform Guidance states the County is responsible for making case-by-case determinations to determine whether the entity receiving the Federal funds is a subrecipient. In addition, §200.303 of the Uniform Guidance states that the County must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA we noted the following: • The Sheriff-Coroner Department did not properly identify the amount expended for the Congressionally Recommended Awards, AL No. 16.753. The expenditures reported by the Department were overstated by $2,638,516. • The Orange County Community Resources Department did not properly identify the amount of Federal funding passed through to subrecipients for the HOME Investment Partnerships Program, AL No. 14.239. The amount passed through to subrecipients reported by the Department was overstated by $4,500,624. • The Sheriff-Coroner Department did not properly identify the amounts expended for the Homeland Security Grant Program, AL No. 97.067. The expenditures reported by the Department were overstated by $715,489. • The Orange County Health Care Agency (HCA) did not properly identify the amount expended for the Epidemiology and Laboratory Capacity for Infectious Disease program, AL No. 93.323. The expenditures reported by the Agency were overstated by $486,000. Cause: As a result, the County lacked adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the County’s processes for recording and tracking expenditures of Federal awards are not designed so that expenditures are identified when incurred. In addition, the County’s processes for identifying and reporting subrecipients are not designed to ensure appropriate reporting on the SEFA. Effect: Adjustments to the SEFA were required. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Finding from Prior Years: No. Recommendation: The County, including all its reporting departments, should follow existing policies, procedures and internal controls to ensure all expenditures and amounts passed through to subrecipients are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Congressionally Recommended Awards / HOME Investment Partnerships Program / Homeland Security Grant Program / Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 16.753 / 14.239 / 97.067 / 93.323 Federal Grantor: U.S. Department of Justice / U.S. Department of Housing and Urban Development / U.S. Department of Homeland Security / U.S. Department of Health and Human Services Award No. and Year: Multiple Compliance Requirements: Other – Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of expenditures of Federal awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. §200.331 of the Uniform Guidance states the County is responsible for making case-by-case determinations to determine whether the entity receiving the Federal funds is a subrecipient. In addition, §200.303 of the Uniform Guidance states that the County must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA we noted the following: • The Sheriff-Coroner Department did not properly identify the amount expended for the Congressionally Recommended Awards, AL No. 16.753. The expenditures reported by the Department were overstated by $2,638,516. • The Orange County Community Resources Department did not properly identify the amount of Federal funding passed through to subrecipients for the HOME Investment Partnerships Program, AL No. 14.239. The amount passed through to subrecipients reported by the Department was overstated by $4,500,624. • The Sheriff-Coroner Department did not properly identify the amounts expended for the Homeland Security Grant Program, AL No. 97.067. The expenditures reported by the Department were overstated by $715,489. • The Orange County Health Care Agency (HCA) did not properly identify the amount expended for the Epidemiology and Laboratory Capacity for Infectious Disease program, AL No. 93.323. The expenditures reported by the Agency were overstated by $486,000. Cause: As a result, the County lacked adequate internal controls to ensure the SEFA is completely and accurately stated. Specifically, the County’s processes for recording and tracking expenditures of Federal awards are not designed so that expenditures are identified when incurred. In addition, the County’s processes for identifying and reporting subrecipients are not designed to ensure appropriate reporting on the SEFA. Effect: Adjustments to the SEFA were required. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures and amounts passed through to subrecipients were reconciled to the supporting records. Repeat Finding from Prior Years: No. Recommendation: The County, including all its reporting departments, should follow existing policies, procedures and internal controls to ensure all expenditures and amounts passed through to subrecipients are accurately tracked and reported on the SEFA. Personnel knowledgeable of federal expenditures should review amounts coded to federal programs for completeness and accuracy. The SEFA should be prepared and reviewed in a timely manner and reconciled to underlying records as well as the basic financial statements. Management Response and Corrective Action Plan: Health Care Agency: 1. Person Responsible: David Santalahti, HCA Claims & Financial Reporting Manager 2. Corrective action plan: HCA Accounting will review and enhance its procedures and training for analysis and tracking federal award expenditures to ensure expenditures are reported in the appropriate fiscal year period. 3. Anticipated Implementation date: June 30, 2026 Orange County Community Resources: 1. Person Responsible: Bill Malohn, OCCR Accounting Manager 2. Corrective action plan: Concur. OCCR has established policies and internal controls to ensure all expenditures and amounts passed through to subrecipients are accurately tracked and reported on the SEFA. Appropriate personnel review amounts coded to federal programs for completeness and accuracy. We prepare and review the SEFA in a timely manner and reconcile to underlying records as well as the basic financial statements. In this particular situation, we miscategorized one provider as a subrecipient and reported the related funding as such on the SEFA. This oversight had no impact on the total amount we reported on the SEFA. We will be sure to follow our policies and procedures to ensure accurate SEFA reporting. 3. Anticipated Implementation date: February 2, 2026 Sheriff-Coroner: 1. Person Responsible: Monique Vansuch, Fiscal Administrator 2. Corrective action plan: The Sheriff-Coroner Department acknowledges the finding and recognized federal grant expenditure incurred is defined as when expenditures are delivered and/or services are performed rather than when the expenditures are paid. We will strengthen the internal controls to ensure grant expenditures are reported per the Uniform Guidance. 3. Anticipated Implementation date: June 30, 2026
Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the Agency’s property records in total. Repeat Finding from Prior Years: Yes. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Multiple Compliance Requirements: Equipment and Real Property Management Type of Finding: Material Weakness in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: In accordance with 2 CFR section 200.313(d)(1), 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 Federal Award Identification Number), who holds title, the acquisition date, 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: Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the Agency’s property records in total. Repeat Finding from Prior Years: Yes. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Multiple Compliance Requirements: Equipment and Real Property Management Type of Finding: Material Weakness in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: In accordance with 2 CFR section 200.313(d)(1), 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 Federal Award Identification Number), who holds title, the acquisition date, 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: Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the Agency’s property records in total. Repeat Finding from Prior Years: Yes. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Management Response and Corrective Action Plan: 1. Person Responsible: Anna Peters, HCA Operations & Support Assistant Deputy Director 2. Corrective action plan: The County of Orange implemented a new Asset Tracking system in 2025 and HCA migrated data from an old legacy system. A funding source field was recently added to the new system to capture job numbers. HCA will ensure all ELC funded property and equipment are properly tracked. 3. Anticipated Implementation date: June 30, 2026
2024-013
During our testing of the County’s compliance with reporting requirements, we noted the County did not submit the required subaward data to FSRS. Cause: The department was unaware of this compliance requirement. Effect: Reports were not submitted to FSRS in accordance with the reporting requirements per Appendix A to Part 170I(a)(2). Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: We identified that the FFATA reporting was not completed as required by 2 CFR Part 170 for the following instances: (See Chart/Table) Amounts shown above as “N/A” represent that, since none of the reports were submitted via FSRS, the remaining categories were not applicable and/or we were unable to test them. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR Appendix A to Part 170I(a)(2). Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Community Development Block Grant Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: B-24-UC-06-0504 and 2025; B-20-UW-06-0504 and 2021 Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: CFR Appendix A to Part 170I(a)(2), Reporting Requirements, states the recipient must report each subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the subaward was issued. Condition: During our testing of the County’s compliance with reporting requirements, we noted the County did not submit the required subaward data to FSRS. Cause: The department was unaware of this compliance requirement. Effect: Reports were not submitted to FSRS in accordance with the reporting requirements per Appendix A to Part 170I(a)(2). Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: We identified that the FFATA reporting was not completed as required by 2 CFR Part 170 for the following instances: (See Chart/Table) Amounts shown above as “N/A” represent that, since none of the reports were submitted via FSRS, the remaining categories were not applicable and/or we were unable to test them. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR Appendix A to Part 170I(a)(2). Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Community Development Block Grant Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: B-24-UC-06-0504 and 2025; B-20-UW-06-0504 and 2021 Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: CFR Appendix A to Part 170I(a)(2), Reporting Requirements, states the recipient must report each subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the subaward was issued. Condition: During our testing of the County’s compliance with reporting requirements, we noted the County did not submit the required subaward data to FSRS. Cause: The department was unaware of this compliance requirement. Effect: Reports were not submitted to FSRS in accordance with the reporting requirements per Appendix A to Part 170I(a)(2). Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling : We identified that the FFATA reporting was not completed as required by 2 CFR Part 170 for the following instances: (Refer to Chart/Table to Finding 2025-003) Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR Appendix A to Part 170I(a)(2). Management Response and Corrective Action Plan: 1. Person Responsible: Francisco Padilla, Community Development Analyst 2. Corrective action plan: Concur. We will adhere to our policies and procedures to ensure reports are submitted to FSRS in accordance with 2 CFR Appendix A to Part 170I(a)(2). 3. Anticipated Implementation date: April 30, 2026
During our testing of the HCA’s provisions for activities allowed or unallowed and allowable costs/cost principles requirements, we noted that for one (1) of sixty (60) payroll samples tested, the employee was able to review and approve their own timecard. Cause: It was determined that the control deficiency resulted from a system configuration error that permitted the employee to approve their own timecard under the supervisor/manager review role. Effect: Failure to consistently apply internal controls over payroll charges increases the risk that unallowable or unsupported payroll costs could be charged to the Federal program and not be detected in a timely manner. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards was selected for testing out of a population of 1,144. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: Management should ensure appropriate segregation of duties within the payroll system by restricting approval authority to independent supervisors or managers and implementing controls to prevent self-approval. In addition, management should periodically review user access roles and system configurations to confirm that approval controls are operating as designed and that payroll charges to Federal programs are allowable, properly allocated, and adequately supported. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing Number: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-Through: California Department of Public Health Award No. and Year: 22-10270 A03 and 2022 Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the HCA’s provisions for activities allowed or unallowed and allowable costs/cost principles requirements, we noted that for one (1) of sixty (60) payroll samples tested, the employee was able to review and approve their own timecard. Cause: It was determined that the control deficiency resulted from a system configuration error that permitted the employee to approve their own timecard under the supervisor/manager review role. Effect: Failure to consistently apply internal controls over payroll charges increases the risk that unallowable or unsupported payroll costs could be charged to the Federal program and not be detected in a timely manner. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards was selected for testing out of a population of 1,144. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: Management should ensure appropriate segregation of duties within the payroll system by restricting approval authority to independent supervisors or managers and implementing controls to prevent self-approval. In addition, management should periodically review user access roles and system configurations to confirm that approval controls are operating as designed and that payroll charges to Federal programs are allowable, properly allocated, and adequately supported. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing Number: 10.557 Federal Grantor: U.S. Department of Agriculture Pass-Through: California Department of Public Health Award No. and Year: 22-10270 A03 and 2022 Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the HCA’s provisions for activities allowed or unallowed and allowable costs/cost principles requirements, we noted that for one (1) of sixty (60) payroll samples tested, the employee was able to review and approve their own timecard. Cause: It was determined that the control deficiency resulted from a system configuration error that permitted the employee to approve their own timecard under the supervisor/manager review role. Effect: Failure to consistently apply internal controls over payroll charges increases the risk that unallowable or unsupported payroll costs could be charged to the Federal program and not be detected in a timely manner. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards was selected for testing out of a population of 1,144. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: Management should ensure appropriate segregation of duties within the payroll system by restricting approval authority to independent supervisors or managers and implementing controls to prevent self-approval. In addition, management should periodically review user access roles and system configurations to confirm that approval controls are operating as designed and that payroll charges to Federal programs are allowable, properly allocated, and adequately supported. Management Response and Corrective Action Plan: 1. Person Responsible: Barbara Harano, HCA Disbursements Manager 2. Corrective action plan: An unexpected change occurred in the OC Time system that allowed an employee to both submit and approve their own timesheet. This issue had been previously reported and resolved. Auditor-Controller IT has reported the issue again to the timekeeping system vendor and is currently validating and testing the updated configuration to ensure the problem does not recur. 3. Anticipated Implementation date: June 30, 2026
During our testing, for one (1) out of sixty (60) payroll expenditures, we noted the timecard did not contain documented evidence of supervisory approval. Cause: The County’s internal control procedures were not consistently followed to ensure that the review and approval of timecards was documented. Effect: Lack of documented review for personnel hours could lead to an increased risk that unallowable or inaccurate activities and costs to be charged to the Federal program. Question Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards were selected for testing out of a population of 5,994. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Findings from Prior Years: No. Recommendation: We recommend that the County strengthen its policies and procedures to ensure that timecards consistently include documented evidence of supervisor approval prior to payroll processing. The County should also establish compensating controls for circumstances where timely supervisory approvals is not possible, and ensure such controls are consistently documented. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: HIV Emergency Relief Project Grants (Ryan White) Federal Financial Assistance Listing Number: 93.914 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 6H89HA00019-32-04; 2024 Compliance Requirements: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing, for one (1) out of sixty (60) payroll expenditures, we noted the timecard did not contain documented evidence of supervisory approval. Cause: The County’s internal control procedures were not consistently followed to ensure that the review and approval of timecards was documented. Effect: Lack of documented review for personnel hours could lead to an increased risk that unallowable or inaccurate activities and costs to be charged to the Federal program. Question Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards were selected for testing out of a population of 5,994. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Findings from Prior Years: No. Recommendation: We recommend that the County strengthen its policies and procedures to ensure that timecards consistently include documented evidence of supervisor approval prior to payroll processing. The County should also establish compensating controls for circumstances where timely supervisory approvals is not possible, and ensure such controls are consistently documented. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: HIV Emergency Relief Project Grants (Ryan White) Federal Financial Assistance Listing Number: 93.914 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 6H89HA00019-32-04; 2024 Compliance Requirements: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing, for one (1) out of sixty (60) payroll expenditures, we noted the timecard did not contain documented evidence of supervisory approval. Cause: The County’s internal control procedures were not consistently followed to ensure that the review and approval of timecards was documented. Effect: Lack of documented review for personnel hours could lead to an increased risk that unallowable or inaccurate activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of sixty (60) timecards were selected for testing out of a population of 5,994. The condition noted above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County strengthen its policies and procedures to ensure that timecards consistently include documented evidence of supervisor approval prior to payroll processing. The County should also establish compensating controls for circumstances where timely supervisory approvals is not possible, and ensure such controls are consistently documented. Management Response and Corrective Action Plan: 1. Person Responsible: Barbara Harano, HCA Disbursements Manager 2. Corrective action plan: HCA Payroll will continue to review the Unapproved Timesheets Report in OC Time and send reminder emails to all supervisors with pending approvals. If supervisory approvals cannot be obtained by the OC Time timesheet upload deadlines, HCA Payroll will ensure documented timesheet approvals are appended through the OC Time amendment process and archived in the Unit’s shared drive. 3. Anticipated Implementation date: January 22, 2026
The following information was not provided at the time of the subaward for three (3) out of five (5) subawards selected for testing from the HCA’s Block Grants for Community Mental Health Services program • Federal Award Identification Number (FAIN) • Federal award date of award to recipient by the Federal Agency • Identification of whether or not the award is R&D • Indirect cost rate for the Federal award (including if the de-minimus rate is charged) Cause: The HCA’s procedures did not consistently ensure that the required award information and applicable requirements were communicated to the subrecipients at the time of subaward. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements as found in 2 CFR 200.332. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of three (3) of five (5) subrecipients were sampled. The condition noted above was identified during our procedures related to subrecipient monitoring. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Block Grants for Community Mental Health Services Federal Financial Assistance Listing Number: 93.958 Federal Grantor: U.S. Department of Health and Human Services Pass Through: California Department of Health Care Services Award No. and Year: 68-0317191 and 2024 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all passthrough entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of the subaward for three (3) out of five (5) subawards selected for testing from the HCA’s Block Grants for Community Mental Health Services program • Federal Award Identification Number (FAIN) • Federal award date of award to recipient by the Federal Agency • Identification of whether or not the award is R&D • Indirect cost rate for the Federal award (including if the de-minimus rate is charged) Cause: The HCA’s procedures did not consistently ensure that the required award information and applicable requirements were communicated to the subrecipients at the time of subaward. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements as found in 2 CFR 200.332. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of three (3) of five (5) subrecipients were sampled. The condition noted above was identified during our procedures related to subrecipient monitoring. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Block Grants for Community Mental Health Services Federal Financial Assistance Listing Number: 93.958 Federal Grantor: U.S. Department of Health and Human Services Pass Through: California Department of Health Care Services Award No. and Year: 68-0317191 and 2024 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all passthrough entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of the subaward for three (3) out of five (5) subawards selected for testing from the HCA’s Block Grants for Community Mental Health Services program • Federal Award Identification Number (FAIN) • Federal award date of award to recipient by the Federal Agency • Identification of whether or not the award is R&D • Indirect cost rate for the Federal award (including if the de-minimus rate is charged) Cause: The HCA’s procedures did not consistently ensure that the required award information and applicable requirements were communicated to the subrecipients at the time of subaward. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements as found in 2 CFR 200.332. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A nonstatistical sample of three (3) of five (5) subrecipients were sampled. The condition noted above was identified during our procedures related to subrecipient monitoring. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Management Response and Corrective Action Plan: 1. Person Responsible: Brittany Davis, HCA Procurement & Contract Services Division Manager 2. Corrective action plan: HCA will coordinate with internal stakeholders on the review of all subrecipient contracts and applicable funding source requirements to ensure that subaward criteria and subrecipient responsibilities are included. Amendments or subrecipient notification letters will be issued, as needed, to notify contractors of subrecipient responsibilities. 3. Anticipated Implementation date: June 30, 2026
For one sample selected for testing, the County did not timely enforce HQS requirements. Cause: The cause of the finding was an administrative oversight that resulted in delays in issuing the final inspection notice following a missed inspection appointment. The County’s existing procedures did not adequately ensure timely follow-up and escalation when an inspection resulted in a noshow. Effect: Because the required inspection and notification were not completed timely, the County did not fully comply with the HQS enforcement requirements. This delay increased the risk that housing assistance payments could continue for a unit that did not meet HUD’s minimum housing quality standards, potentially affecting program compliance and participant health and safety. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty (60) out of a total population of 1,029 instances of failed HQS were selected. The condition noted above was identified during our procedures related to special tests and provisions – HQS Enforcement. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its HQS enforcement procedures by implementing controls to ensure timely follow-up on failed inspections, including missed appointments. Such controls may include automated tracking of inspection deadlines, supervisory review of no-show appointments, and escalation procedures to ensure owners are notified within required time frames. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Housing Voucher Cluster Federal Financial Assistance Listing Number: 14.871 / 14.879 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: Multiple Compliance Requirements: Special Tests and Provisions – HQS Enforcement Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: The 2025 OMB Compliance Supplement requires that for dwellings under Housing Assistance Payment (HAP) contracts that fail a Housing Quality Standards (HQS) inspection, the County must enforce HQS requirements. Specifically, upon notification that a unit has failed HQS, the County must inspect the unit within 15 days to confirm the deficiency and notify the owner if the deficiency is confirmed. Once notified, the owner is required to make the necessary repairs within the prescribed time frame. If the owner does not correct the cited HQS deficiencies within the specified correction period, the County must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition: For one sample selected for testing, the County did not timely enforce HQS requirements. Cause: The cause of the finding was an administrative oversight that resulted in delays in issuing the final inspection notice following a missed inspection appointment. The County’s existing procedures did not adequately ensure timely follow-up and escalation when an inspection resulted in a noshow. Effect: Because the required inspection and notification were not completed timely, the County did not fully comply with the HQS enforcement requirements. This delay increased the risk that housing assistance payments could continue for a unit that did not meet HUD’s minimum housing quality standards, potentially affecting program compliance and participant health and safety. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty (60) out of a total population of 1,029 instances of failed HQS were selected. The condition noted above was identified during our procedures related to special tests and provisions – HQS Enforcement. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its HQS enforcement procedures by implementing controls to ensure timely follow-up on failed inspections, including missed appointments. Such controls may include automated tracking of inspection deadlines, supervisory review of no-show appointments, and escalation procedures to ensure owners are notified within required time frames. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Housing Voucher Cluster Federal Financial Assistance Listing Number: 14.871 / 14.879 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: Multiple Compliance Requirements: Special Tests and Provisions – HQS Enforcement Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: The 2025 OMB Compliance Supplement requires that for dwellings under Housing Assistance Payment (HAP) contracts that fail a Housing Quality Standards (HQS) inspection, the County must enforce HQS requirements. Specifically, upon notification that a unit has failed HQS, the County must inspect the unit within 15 days to confirm the deficiency and notify the owner if the deficiency is confirmed. Once notified, the owner is required to make the necessary repairs within the prescribed time frame. If the owner does not correct the cited HQS deficiencies within the specified correction period, the County must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition: For one sample selected for testing, the County did not timely enforce HQS requirements. Cause: The cause of the finding was an administrative oversight that resulted in delays in issuing the final inspection notice following a missed inspection appointment. The County’s existing procedures did not adequately ensure timely follow-up and escalation when an inspection resulted in a noshow. Effect: Because the required inspection and notification were not completed timely, the County did not fully comply with the HQS enforcement requirements. This delay increased the risk that housing assistance payments could continue for a unit that did not meet HUD’s minimum housing quality standards, potentially affecting program compliance and participant health and safety. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty (60) out of a total population of 1,029 instances of failed HQS were selected. The condition noted above was identified during our procedures related to special tests and provisions – HQS enforcement. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its HQS enforcement procedures by implementing controls to ensure timely follow-up on failed inspections, including missed appointments. Such controls may include automated tracking of inspection deadlines, supervisory review of no-show appointments, and escalation procedures to ensure owners are notified within required time frames. Management Response and Corrective Action Plan: 1. Person Responsible: Linda Tarzjani, Leasing Manager 2. Corrective action plan: Concur. We will strengthen our HQS enforcement procedures by implementing controls to ensure timely follow-up on failed inspections, including missed appointments. In doing so we will consider automated tracking of inspection deadlines, supervisory review of noshow appointments, and escalation procedures to ensure owners are notified within required time frames. 3. Anticipated Implementation date: February 1, 2026
During our testing of the Social Service Agency’s (SSA) compliance with eligibility and allowable cost/cost principles, we noted the following: • One (1) instance of payment issued to a participant who did not meet eligible immigration status requirements. • One (1) instance of payment issued to a participant who was eligible for another federally funded cash assistance program. • One (1) instance of payment issued to a participant who failed to meet the mandatory work registrant requirements within the required time frame. • One (1) instance of payment issued to a participant using an incorrect benefit rate. Cause: Controls over eligibility determination and benefit rate calculation were not consistently applied, including insufficient verification and supervisory review of eligibility criteria and payment amounts. Effect: Program funds were expended for ineligible participants and an incorrect benefit rate was used, increasing the risk of noncompliance with federal requirements. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance was $1,814. Context/Sampling: A nonstatistical sample of sixty (60) out of all active program participants were sampled. For ineligible cases, we have projected questioned costs against the remaining population for a total of $24,276. The underpayment related to an incorrect benefit rate used was not projected as questioned costs as this did not result in an over-expenditure of federal funds. The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding from Prior Years: Yes. Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria and benefit determinations are properly supported. Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.566 Federal Grantor: U.S. Department of Health and Human Services Pass Through: California Department of Social Services Award No. and Year: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 45 CFR Part 400, prescribes the eligibility conditions refugees must meet to receive RCA including the following: • RCA recipients must meet the general eligibility requirements for immigration status and refugee identification in accordance with 45 CFR §400.40 - §400.44. • RCA is limited to refugees who are ineligible for TANF, SSI, OAA, AB, APTD, and AABD in accordance with 45 CFR §400.53. • Mandatory work registrants must comply with work requirements and may not voluntarily quit or refuse suitable employment within 30 days prior to application; benefits must be terminated when requirements are not met (45 CFR §§400.75(a), 400.77, and 400.82(a)). • RCA payments may not exceed ORR-authorized rates and may not be less than the State TANF payment rate (45 CFR §§400.60(b) and 400.60(d); ORR PL 22-01). Condition: During our testing of the Social Service Agency’s (SSA) compliance with eligibility and allowable cost/cost principles, we noted the following: • One (1) instance of payment issued to a participant who did not meet eligible immigration status requirements. • One (1) instance of payment issued to a participant who was eligible for another federally funded cash assistance program. • One (1) instance of payment issued to a participant who failed to meet the mandatory work registrant requirements within the required time frame. • One (1) instance of payment issued to a participant using an incorrect benefit rate. Cause: Controls over eligibility determination and benefit rate calculation were not consistently applied, including insufficient verification and supervisory review of eligibility criteria and payment amounts. Effect: Program funds were expended for ineligible participants and an incorrect benefit rate was used, increasing the risk of noncompliance with federal requirements. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance was $1,814. Context/Sampling: A nonstatistical sample of sixty (60) out of all active program participants were sampled. For ineligible cases, we have projected questioned costs against the remaining population for a total of $24,276. The underpayment related to an incorrect benefit rate used was not projected as questioned costs as this did not result in an over-expenditure of federal funds. The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding from Prior Years: Yes. Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria and benefit determinations are properly supported. Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.566 Federal Grantor: U.S. Department of Health and Human Services Pass Through: California Department of Social Services Award No. and Year: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 45 CFR Part 400, prescribes the eligibility conditions refugees must meet to receive RCA including the following: • RCA recipients must meet the general eligibility requirements for immigration status and refugee identification in accordance with 45 CFR §400.40 - §400.44. • RCA is limited to refugees who are ineligible for TANF, SSI, OAA, AB, APTD, and AABD in accordance with 45 CFR §400.53. • Mandatory work registrants must comply with work requirements and may not voluntarily quit or refuse suitable employment within 30 days prior to application; benefits must be terminated when requirements are not met (45 CFR §§400.75(a), 400.77, and 400.82(a)). • RCA payments may not exceed ORR-authorized rates and may not be less than the State TANF payment rate (45 CFR §§400.60(b) and 400.60(d); ORR PL 22-01). Condition: During our testing of the Social Services Agency’s (SSA) compliance with eligibility and allowable cost/cost principles, we noted the following: • One (1) instance of payment issued to a participant who did not meet eligible immigration status requirements. • One (1) instance of payment issued to a participant who was eligible for another federally funded cash assistance program. • One (1) instance of payment issued to a participant who failed to meet the mandatory work registrant requirements within the required time frame. • One (1) instance of payment issued to a participant using an incorrect benefit rate. Cause: Controls over eligibility determination and benefit rate calculation were not consistently applied, including insufficient verification and supervisory review of eligibility criteria and payment amounts. Effect: Program funds were expended for ineligible participants and an incorrect benefit rate was used, increasing the risk of noncompliance with federal requirements. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance was $1,814. Context/Sampling: A nonstatistical sample of sixty (60) out of all active program participants were sampled. For ineligible cases, we have projected questioned costs against the remaining population for a total of $24,276. The underpayment related to an incorrect benefit rate used was not projected as questioned costs as this did not result in an over-expenditure of federal funds The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding from Prior Years: Yes. Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria and benefit determinations are properly supported. Management Response and Corrective Action Plan: 1. Person Responsible: Rosa Palacios, Human Services Manager 2. Corrective action plan: Staff Guidance and Eligibility Reminder: Program will issue a reminder to all eligibility staff reinforcing program eligibility requirements and the importance of thoroughly reviewing documentation when making eligibility determinations. The reminder will highlight key areas identified in the audit findings, including verification of immigration eligibility, identifying applicants who may qualify for other federally funded cash assistance programs, and ensuring accurate benefit determinations. Work Requirement Reporting Coordination: Program will also communicate with the contracted provider responsible for monitoring work participation requirements to reinforce expectations regarding timely reporting of participant non-compliance. Internal staff will be reminded to take timely action once non-compliance is reported to ensure benefits are discontinued in accordance with program requirements. System Correction: The incorrect benefit rate identified during the audit was related to a prior system configuration issue that required manual processing. The system has since been updated. Program staff will continue to monitor system updates and verify benefit calculations as needed. 3. Anticipated Implementation date: June 30, 2026
2024-014
For two (2) out of two (2) subrecipients selected for testing, the subrecipient risk assessments were not performed by the department and the subrecipient was not checked for suspension or debarment prior to entering into the agreement. For one (1) out of two (2) subrecipients selected for testing, evidence could not be provided to verify the County reviewed the subrecipient’s single audit report to ensure timely corrective action was taken on audit findings, as applicable. Cause: Internal controls were not in place to ensure compliance with subrecipient monitoring requirements. Effect: Ineffective controls over this area of compliance could result in noncompliance occurring for a subrecipient and not being detected. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) subrecipients out of a population of two (2) was selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend the department enhance internal controls to ensure compliance with subrecipient monitoring requirements Views of Responsible Officials: See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Homeland Security Grant Program Federal Financial Assistance Listing Number: 97.067 Federal Grantor: U.S. Department of Homeland Security Pass-Through Entity: California Governor’s Office of Emergency Services Award No. and Year: Multiple Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.332, requires that pass-through entities: • Evaluate the risk of noncompliance with a subaward to determine the appropriate monitoring. • Verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient take timely corrective action on all audit findings, as applicable. • Verify whether the subrecipient is suspended, debarred, or otherwise excluded before entering into a covered transaction. Condition: For two (2) out of two (2) subrecipients selected for testing, the subrecipient risk assessments were not performed by the department and the subrecipient was not checked for suspension or debarment prior to entering into the agreement. For one (1) out of two (2) subrecipients selected for testing, evidence could not be provided to verify the County reviewed the subrecipient’s single audit report to ensure timely corrective action was taken on audit findings, as applicable. Cause: Internal controls were not in place to ensure compliance with subrecipient monitoring requirements. Effect: Ineffective controls over this area of compliance could result in noncompliance occurring for a subrecipient and not being detected. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) subrecipients out of a population of two (2) was selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend the department enhance internal controls to ensure compliance with subrecipient monitoring requirements Views of Responsible Officials: See separately issued Corrective Action Plan.
Program: Homeland Security Grant Program Federal Financial Assistance Listing Number: 97.067 Federal Grantor: U.S. Department of Homeland Security Pass-Through Entity: California Governor’s Office of Emergency Services Award No. and Year: Multiple Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.332, requires that pass-through entities: • Evaluate the risk of noncompliance with a subaward to determine the appropriate monitoring. • Verify every subrecipient is audited as required by Uniform Guidance, issue management decisions for audit findings, as applicable, and ensure the subrecipient take timely corrective action on all audit findings, as applicable. • Verify whether the subrecipient is suspended, debarred, or otherwise excluded before entering into a covered transaction. Condition: For two (2) out of two (2) subrecipients selected for testing, the subrecipient risk assessments were not performed by the department and the subrecipient was not checked for suspension or debarment prior to entering into the agreement. For one (1) out of two (2) subrecipients selected for testing, evidence could not be provided to verify the County reviewed the subrecipient’s single audit report to ensure timely corrective action was taken on audit findings, as applicable. Cause: Internal controls were not in place to ensure compliance with subrecipient monitoring requirements. Effect: Ineffective controls over this area of compliance could result in noncompliance occurring for a subrecipient and not being detected. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) subrecipients out of a population of two (2) was selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the department enhance internal controls to ensure compliance with subrecipient monitoring requirements. Management Response and Corrective Action Plan: 1. Person Responsible: Monique Vansuch, Fiscal Administrator 2. Corrective action plan: The Sheriff-Coroner Department will complete and document risk assessments, suspension/debarment status and verify subrecipient’s single audit report is reviewed and corrective actions are implemented prior to subaward issuance. 3. Anticipated Implementation date: June 30, 2026
FAC accepted this audit on March 31, 2025 — management decision was due October 1, 2025.
The Social Services Agency (SSA) did not maintain documentation that the subrecipient risk assessment or the monitoring activity tracker was reviewed. Cause: The SSA department did not document its review of the subrecipient risk assessment or the monitoring activity tracker. Effect: The County’s control policies were not consistently followed and documented. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of twelve (12) out of fifty-eight (58) subrecipients were sampled, which included seven (7) Foster Family Agency, four (4) Short Term Residential Therapeutic Programs, and one (1) Transitional Housing Placement-Plus Foster Care types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2023-001. Recommendation: We recommend that the County ensure the review over subrecipient monitoring activity is appropriately documented. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-004 Program: Foster Care Title IV-E Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2401CAFOST and 2024, 2301CAFOST and 2023 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). 2 CFR 200.332(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. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). The California Department of Social Services further clarifies in its County Fiscal Letter No. 23/24- 80 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any followup to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management) Condition: The Social Services Agency (SSA) did not maintain documentation that the subrecipient risk assessment or the monitoring activity tracker was reviewed. Cause: The SSA department did not document its review of the subrecipient risk assessment or the monitoring activity tracker. Effect: The County’s control policies were not consistently followed and documented. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of twelve (12) out of fifty-eight (58) subrecipients were sampled, which included seven (7) Foster Family Agency, four (4) Short Term Residential Therapeutic Programs, and one (1) Transitional Housing Placement-Plus Foster Care types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2023-001. Recommendation: We recommend that the County ensure the review over subrecipient monitoring activity is appropriately documented. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-004 Program: Foster Care Title IV-E Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2401CAFOST and 2024, 2301CAFOST and 2023 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). The California Department of Social Services further clarifies in its County Fiscal Letter No. 23/24-80 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management) Condition: The Social Services Agency (SSA) did not maintain documentation that the subrecipient risk assessment or the monitoring activity tracker was reviewed. Cause: The SSA department did not document its review of the subrecipient risk assessment or the monitoring activity tracker. Effect: The County’s control policies were not consistently followed and documented. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of twelve (12) out of fifty-eight (58) subrecipients were sampled, which included seven (7) Foster Family Agency, four (4) Short Term Residential Therapeutic Programs, and one (1) Transitional Housing Placement-Plus Foster Care types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2023-001. Recommendation: We recommend that the County ensure the review over subrecipient monitoring activity is appropriately documented. Management Response and Corrective Action: 1. Person Responsible: Karen Vu, Procurement Contract Manager, Senior 2. Corrective Action Plan: An activity tracker spreadsheet (check list) was developed and implemented in September 2023 to ensure timely completion of subrecipient monitoring activities. The check list is not a requirement of 2 CFR 200.332, the checklist and risk assessment form were shared with the Auditors during prior year's Single Audit, and the auditors did not raise any concerns related to either during the audit. The subrecipient risk assessment and the monitoring activity tracker is reviewed by supervisors; however, review was not documented. We will accept the auditor’s recommendation and add a signature line to the risk assessment and activity tracker to document review by a supervisor. 3. Anticipated Implementation Date: April 2025
2023-001
For three (3) of eight (8) vendors tested, we were not able to verify that the Sheriff Department followed their internal control to ensure the vendor was not suspended or debarred prior to entering the transaction. Cause: The Sheriff department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County’s policy was not consistently followed, which required verification of suspension or debarment prior to entering the contract. The department subsequently verified that the vendor was not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of thirty-three (33) procurement contracts were tested. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff’s Department adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-005 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: For three (3) of eight (8) vendors tested, we were not able to verify that the Sheriff Department followed their internal control to ensure the vendor was not suspended or debarred prior to entering the transaction. Cause: The Sheriff department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County’s policy was not consistently followed, which required verification of suspension or debarment prior to entering the contract. The department subsequently verified that the vendor was not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of thirty-three (33) procurement contracts were tested. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff’s Department adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-005 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: For three (3) of eight (8) vendors tested, we were not able to verify that the Sheriff Department followed their internal control to ensure the vendor was not suspended or debarred prior to entering the transaction. Cause: The Sheriff department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County’s policy was not consistently followed, which required verification of suspension or debarment prior to entering the contract. The department subsequently verified that the vendor was not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of thirty-three (33) procurement contracts were tested. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff’s Department adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Management Response and Corrective Action: 1. Person Responsible: Yvette Torres, Procurement Contract Manager, Senior 2. Corrective Action Plan: The Sheriff’s Department acknowledges the audit finding and is committed to implementing a robust due diligence process to ensure compliance with procurement and suspension/debarment regulations. The following corrective actions will be taken: a. Policy Reinforcement and SAM.gov Checks: The department will reinforce adherence to existing procurement procedures that require suspension or debarment verification prior to entering into any contract by requiring all procurement staff to verify vendor status on the System for Award Management (SAM.gov) before executing any contracts. Proof of verification including the applicable date printed will be retained and included in the contract file to ensure compliance with federal regulations and internal policies. Additionally, as an added layer to ensure compliance with all federal, state and local laws, the County Procurement Office has required that all Deputy Purchasing Agents (DPA’s) conduct a Due Diligence check on all County Contracts which includes a SAM.gov check. b. Refresher Training: All procurement staff will participate in refresher training to reinforce the importance of compliance with 2 CFR section 180.300. This training will cover proper procedures for conducting suspension and debarment checks using SAM.gov and emphasize the documentation requirements to maintain compliance. c. Enhanced Internal Controls and Monitoring A secondary review process will be implemented, requiring a supervisor or manager to verify the suspension or debarment check documentation prior to contract execution. Additionally, periodic internal audits will be conducted to ensure compliance with federal regulations and internal policies. Any identified discrepancies will be promptly addressed with corrective actions to maintain robust internal controls. 3. Anticipated Implementation Date: April 2025
During our testing of the Sheriff Department’s compliance with allowable costs/cost principles requirements, we noted that thirty-three (33) of forty (40) overtime cost calculations were miscalculated. Cause: Equitable sharing funds may not be used for salaries, except under certain provisions outlined in Section V.B.3 of the Equitable Sharing Guide including overtime. The Sheriff’s Department calculates the allowable portion of personnel salaries using a separate template that contained a formula error which inaccurately calculated the total salaries costs allocated to the program. The Sheriff’s department did not have internal controls in place to ensure that the allowed salaries were being calculated correctly. However, the error was detected after the 5th out of 6 months in which these types of costs were allocated to the program. Effect: Salary costs were allocated to the program in an incorrect amount. Questioned Costs: Our testing resulted in questioned costs in the amount of $3,550. However, the total questioned costs for the total population was $23,409. Context/Sampling: A sample of forty (40) individuals were selected from a population consisting of (840) payroll transactions. Repeat Finding from Prior Years: No. Recommendation: We recommend the Sheriff’s Department establish and maintain internal controls to ensure the overtime calculations are being accurately allocated to the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-006 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the Sheriff Department’s compliance with allowable costs/cost principles requirements, we noted that thirty-three (33) of forty (40) overtime cost calculations were miscalculated. Cause: Equitable sharing funds may not be used for salaries, except under certain provisions outlined in Section V.B.3 of the Equitable Sharing Guide including overtime. The Sheriff’s Department calculates the allowable portion of personnel salaries using a separate template that contained a formula error which inaccurately calculated the total salaries costs allocated to the program. The Sheriff’s department did not have internal controls in place to ensure that the allowed salaries were being calculated correctly. However, the error was detected after the 5th out of 6 months in which these types of costs were allocated to the program. Effect: Salary costs were allocated to the program in an incorrect amount. Questioned Costs: Our testing resulted in questioned costs in the amount of $3,550. However, the total questioned costs for the total population was $23,409. Context/Sampling: A sample of forty (40) individuals were selected from a population consisting of (840) payroll transactions. Repeat Finding from Prior Years: No. Recommendation: We recommend the Sheriff’s Department establish and maintain internal controls to ensure the overtime calculations are being accurately allocated to the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-006 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the Sheriff Department’s compliance with allowable costs/cost principles requirements, we noted that thirty-three (33) of forty (40) overtime cost calculations were miscalculated. Cause: Equitable sharing funds may not be used for salaries, except under certain provisions outlined in Section V.B.3 of the Equitable Sharing Guide including overtime. The Sheriff’s Department calculates the allowable portion of personnel salaries using a separate template that contained a formula error which inaccurately calculated the total salaries costs allocated to the program. The Sheriff’s department did not have internal controls in place to ensure that the allowed salaries were being calculated correctly. However, the error was detected after the 5th out of 6 months in which these types of costs were allocated to the program. Effect: Salary costs were allocated to the program in an incorrect amount. Questioned Costs: Our testing resulted in questioned costs in the amount of $3,550. However, the total questioned costs for the total population was $23,409. Context/Sampling: A sample of forty (40) individuals were selected from a population consisting of (840) payroll transactions. Repeat Finding from Prior Years: No. Recommendation: We recommend the Sheriff’s Department establish and maintain internal controls to ensure the overtime calculations are being accurately allocated to the program. Management Response and Corrective Action: 1. Person Responsible: Tiffany Mui, Fiscal Administrator 2. Corrective Action Plan: a. Staff corrected the formula error in the Overtime (OT) calculation workpapers. Detailed workpapers, including formulas, will be reviewed by Fiscal Administrator. b. Updated desk procedures for Sheriff’s Narcotics task will include updated OT calculation change. Procedures will be reviewed and initialed by Fiscal Administrator and Sr. Fiscal Manager. 3. Anticipated Implementation date: March 2025
During our testing of the Orange County Public Works’ (OCPW) compliance with procurement and suspension and debarment requirements, we noted for three (3) of three (3) contracts selected for testing, there was no evidence that the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County Policy. In addition, the following information was not provided at the time of the contract award for three (3) of three (3) contracts selected: - Byrd Anti-Lobbying Amendment - Debarment and Suspension Cause: The OCPW did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The County’s control and compliance were not consistently followed, which required verification of suspension and debarment prior to entering the contract. Additionally, the OCPW department did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) of ten (10) procurement contracts were sampled. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the OCPW department adhere to its procurement procedures requiring the suspension and debarment verification is performed prior to entering into a covered transaction. Additionally, we recommend the OCPW modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contracts in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-007 Program: Santa Ana River Mainstem Project Federal Financial Assistance Listing Number: 12.U01 Federal Grantor: U.S. Department of Defense Award No. and Year: 2020 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non- Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: During our testing of the Orange County Public Works’ (OCPW) compliance with procurement and suspension and debarment requirements, we noted for three (3) of three (3) contracts selected for testing, there was no evidence that the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County Policy. In addition, the following information was not provided at the time of the contract award for three (3) of three (3) contracts selected: - Byrd Anti-Lobbying Amendment - Debarment and Suspension Cause: The OCPW did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The County’s control and compliance were not consistently followed, which required verification of suspension and debarment prior to entering the contract. Additionally, the OCPW department did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) of ten (10) procurement contracts were sampled. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the OCPW department adhere to its procurement procedures requiring the suspension and debarment verification is performed prior to entering into a covered transaction. Additionally, we recommend the OCPW modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contracts in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-007 Program: Santa Ana River Mainstem Project Federal Financial Assistance Listing Number: 12.U01 Federal Grantor: U.S. Department of Defense Award No. and Year: 2020 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: During our testing of the Orange County Public Works’ (OCPW) compliance with procurement and suspension and debarment requirements, we noted for three (3) of three (3) contracts selected for testing, there was no evidence that the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County Policy. In addition, the following information was not provided at the time of the contract award for three (3) of three (3) contracts selected: •Byrd Anti-Lobbying Amendment •Debarment and Suspension Cause: The OCPW did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The County’s control and compliance were not consistently followed, which required verification of suspension and debarment prior to entering the contract. Additionally, the OCPW department did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) of ten (10) procurement contracts were sampled. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the OCPW department adhere to its procurement procedures requiring the suspension and debarment verification is performed prior to entering into a covered transaction. Additionally, we recommend the OCPW modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contracts in accordance with 2 CFR Appendix II to Part 200. Management Response and Corrective Action: 1. Person Responsible: Joe Sly 2. Corrective Action Plan: OCPW will send a memo to impacted vendors requesting a contract modification to include the federal requirement 3. Anticipated Implementation date: September 15, 2025
During our testing of the Social Service Agency’s (SSA) provisions for eligibility requirements, we noted that for one (1) of sixty (60) samples tested the department did not suspend, or pause, program eligibility despite being over the income limit for MAGI. Cause: The SSA department did not ensure the department’s policies and procedures relating to eligibility determination were followed. We noted that when a participant is determined to be over the income limit for MAGI, the participant is placed on a “soft pause” until a determination of eligibility under non-MAGI or Covered California is made. The department had erroneously marked the application as complete rather than placing the account on “soft pause” which caused the case to auto-renew. Effect: The County’s control was not consistently followed which caused an inaccurate determination of eligibility. Questioned Costs: None noted. Context/Sampling: A non-statistical sample of sixty (60) out of all active program participants were selected for testing. The condition noted above was identified during our procedures related to eligibility. Repeat Finding: No. Recommendation: We recommend the SSA department adhere to their policies and procedures to ensure that participant eligibility determinations and redeterminations are performed accurately. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-008 Program: Medicaid Cluster Federal Financial Assistance Listing Number: 93.778 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Health Care Services Award No. and Year: Various Compliance Requirements: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: Title 42 Chapter IV Subchapter C Part 435 Subpart J Section 435.916, Regularly Scheduled Renewals of Medicaid Eligibility, states that the agency must renew MAGI-based determination of eligibility once every 12 months and no more frequently than once every 12 months. For non- MAGI beneficiaries, entities must renew eligibility at least once every 12 months. Condition: During our testing of the Social Service Agency’s (SSA) provisions for eligibility requirements, we noted that for one (1) of sixty (60) samples tested the department did not suspend, or pause, program eligibility despite being over the income limit for MAGI. Cause: The SSA department did not ensure the department’s policies and procedures relating to eligibility determination were followed. We noted that when a participant is determined to be over the income limit for MAGI, the participant is placed on a “soft pause” until a determination of eligibility under non-MAGI or Covered California is made. The department had erroneously marked the application as complete rather than placing the account on “soft pause” which caused the case to auto-renew. Effect: The County’s control was not consistently followed which caused an inaccurate determination of eligibility. Questioned Costs: None noted. Context/Sampling: A non-statistical sample of sixty (60) out of all active program participants were selected for testing. The condition noted above was identified during our procedures related to eligibility. Repeat Finding: No. Recommendation: We recommend the SSA department adhere to their policies and procedures to ensure that participant eligibility determinations and redeterminations are performed accurately. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-008 Program: Medicaid Cluster Federal Financial Assistance Listing Number: 93.778 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Health Care Services Award No. and Year: Various Compliance Requirements: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: Title 42 Chapter IV Subchapter C Part 435 Subpart J Section 435.916, Regularly Scheduled Renewals of Medicaid Eligibility, states that the agency must renew MAGI-based determination of eligibility once every 12 months and no more frequently than once every 12 months. For non- MAGI beneficiaries, entities must renew eligibility at least once every 12 months. Condition: During our testing of the Social Service Agency’s (SSA) provisions for eligibility requirements, we noted that for one (1) of sixty (60) samples tested the department did not suspend, or pause, program eligibility despite being over the income limit for MAGI. Cause: The SSA department did not ensure the department’s policies and procedures relating to eligibility determination were followed. We noted that when a participant is determined to be over the income limit for MAGI, the participant is placed on a “soft pause” until a determination of eligibility under non-MAGI or Covered California is made. The department had erroneously marked the application as complete rather than placing the account on “soft pause” which caused the case to auto-renew. Effect: The County’s control was not consistently followed which caused an inaccurate determination of eligibility. Questioned Costs: None noted. Context/Sampling: A non-statistical sample of sixty (60) out of all active program participants were selected for testing. The condition noted above was identified during our procedures related to eligibility. Repeat Finding: No. Recommendation: We recommend the SSA department adhere to their policies and procedures to ensure that participant eligibility determinations and redeterminations are performed accurately. Management Response and Corrective Action: 1. Person Responsible: Michael Ueda, Human Services Manager and Yesenia Zapien, Human Service Manager 2. Corrective Action Plan: SSA will add administrative controls to track cases in soft pause to ensure eligibility determinations and redeterminations are performed accurately. Additionally, staff will be reminded of the policy and procedures surrounding soft pause. 3. Anticipated Implementation date: May 2025
During our testing of the Orange County Community Resources (OCCR) department’s provisions for subrecipient monitoring requirements, we noted that for one (1) of four (4) subrecipients tested, onsite monitoring and follow-up on documented deficiencies was not performed timely. Cause: Established policies and procedures related to subrecipient monitoring do not specify the timeframe within which monitoring must be completed. Effect: There is an increased risk that the department’s monitoring procedure may not address the subrecipient’s risk of noncompliance. Question Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of four (4) out of (10) subrecipients were selected for testing. The condition above was identified during our procedures over subrecipient monitoring. Repeat Finding: No. Recommendation: We recommend the department review its established policies and procedures to ensure subrecipient monitoring is performed timely. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-009 Program: Aging Cluster Federal Financial Assistance Listing Number: 93.041, 93.042, 93.043, 93.044, 93.045, 93.052, 93.053 Federal Grantor: U.S. Department of Health and Human Services Passed-Through: California Department of Aging Award No. and Year: AP-2122-22 and 2022, AP-2324-22 and 2024 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: Per 2 CFR 200.332, a pass-through entity must 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. In monitoring a subrecipient, a pass-through entity must include the information at 2 CFR 200.332(1) through (4). Condition: During our testing of the Orange County Community Resources (OCCR) department’s provisions for subrecipient monitoring requirements, we noted that for one (1) of four (4) subrecipients tested, onsite monitoring and follow-up on documented deficiencies was not performed timely. Cause: Established policies and procedures related to subrecipient monitoring do not specify the timeframe within which monitoring must be completed. Effect: There is an increased risk that the department’s monitoring procedure may not address the subrecipient’s risk of noncompliance. Question Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of four (4) out of (10) subrecipients were selected for testing. The condition above was identified during our procedures over subrecipient monitoring. Repeat Finding: No. Recommendation: We recommend the department review its established policies and procedures to ensure subrecipient monitoring is performed timely. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-009 Program: Aging Cluster Federal Financial Assistance Listing Number: 93.041, 93.042, 93.043, 93.044, 93.045, 93.052, 93.053 Federal Grantor: U.S. Department of Health and Human Services Passed-Through: California Department of Aging Award No. and Year: AP-2122-22 and 2022, AP-2324-22 and 2024 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: Per 2 CFR 200.332, a pass-through entity must 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. In monitoring a subrecipient, a pass-through entity must include the information at 2 CFR 200.332(1) through (4). Condition: During our testing of the Orange County Community Resources (OCCR) department’s provisions for subrecipient monitoring requirements, we noted that for one (1) of four (4) subrecipients tested, onsite monitoring and follow-up on documented deficiencies was not performed timely. Cause: Established policies and procedures related to subrecipient monitoring do not specify the timeframe within which monitoring must be completed. Effect: There is an increased risk that the department’s monitoring procedure may not address the subrecipient’s risk of noncompliance. Question Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of four (4) out of (10) subrecipients were selected for testing. The condition above was identified during our procedures over subrecipient monitoring. Repeat Finding: No. Recommendation: We recommend the department review its established policies and procedures to ensure subrecipient monitoring is performed timely. Management Response and Corrective Action: 1. Person Responsible: Elsa Rivera, Compliance & Monitoring Manager 2. Corrective Action Plan: Concur. Onsite monitoring and follow-up on documented deficiencies have been performed and/or scheduled in compliance with 2 CFR § 200.332. CFR § 200.332 provides guidance on subrecipient monitoring but does not specify exact timelines for when monitoring must be completed. We provided documentation to demonstrate that we are meeting monitoring requirements. Also, we will follow through with the monitoring activities that have already been scheduled for the subrecipient in question. We will review our departmental subrecipient monitoring practices to ensure compliance with County policy. 3. Anticipated Implementation date: June 30, 2025
For two (2) out of three (3) project application summary reports tested, the OCPW did not retain evidence to document the individual who reviewed and approved the required reports. Cause: The department’s procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A non-statistical sample of three (3) of nine (9) Grant Project Application Summary Reports were selecting for testing. The condition above was identified during our procedures over reporting testing. Repeat Finding: No. Recommendation: We recommend the OCPW department revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-010 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Financial Assistance Listing Number: 97.036 Federal Grantor: U.S. Department of Homeland Security Pass Through: California Office of Emergency Services Award No. and Year: 059-00000 and 2019 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: For two (2) out of three (3) project application summary reports tested, the OCPW did not retain evidence to document the individual who reviewed and approved the required reports. Cause: The department’s procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A non-statistical sample of three (3) of nine (9) Grant Project Application Summary Reports were selecting for testing. The condition above was identified during our procedures over reporting testing. Repeat Finding: No. Recommendation: We recommend the OCPW department revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-010 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Financial Assistance Listing Number: 97.036 Federal Grantor: U.S. Department of Homeland Security Pass Through: California Office of Emergency Services Award No. and Year: 059-00000 and 2019 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: For two (2) out of three (3) project application summary reports tested, the OCPW did not retain evidence to document the individual who reviewed and approved the required reports. Cause: The department’s procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A non-statistical sample of three (3) of nine (9) Grant Project Application Summary Reports were selecting for testing. The condition above was identified during our procedures over reporting testing. Repeat Finding: No. Recommendation: We recommend the OCPW department revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. Management Response and Corrective Action: 1. Person Responsible: • FEMA Public Assistance Grants Coordinator – Responsible for completing reports, uploading documents to the FEMA Grants Portal, and ensuring accurate records. • OCPW Emergency Manager Responsible for reviewing, approving, and submitting project applications. 2. Corrective Action Plan: • Revised Procedures for Review and Approval: i. The FEMA Public Assistance Grants Coordinator will be responsible for completing the Project Application Summary Reports. ii. Upon completion, the Grants Coordinator will upload all supporting documents into the FEMA Grants Portal. The system automatically timestamps each document and records the name of the individual who uploaded it, ensuring clear documentation of the review process. iii. After all required documents are uploaded, the OCPW Emergency Manager will be notified that the project application is ready for review. iv. The OCPW Emergency Manager will then: 1. Review the submitted documents in the FEMA Grants Portal. 2. Confirm that the reported costs align with the information provided by the reporting County agency. 3. Approve and submit the project application to Cal OES and FEMA for project approval. • Retention of Documentation: i. The FEMA Grants Portal serves as the official system of record, ensuring all uploaded documents are timestamped and traceable. ii. All project application approvals, cost documentation, and required forms will be retained electronically within the system for audit and compliance purposes. • Training and Implementation: i. Staff responsible for grant reporting will receive training on the revised process, including proper document upload procedures and compliance expectations. ii. The updated process will be implemented immediately. • Monitoring and Compliance: i. The OCPW Emergency Manager will conduct semiannual internal reviews of project applications to ensure compliance with the updated procedures. ii. Any issues identified during internal reviews will be addressed through additional staff training and process improvements. 3. Anticipated Implementation date: Immediate, March 18, 2025 • Staff Training: Within 30 days • Semiannual Compliance Review: Beginning next quarter i. First review will take place May 1, 2025. Followed by another review in October 2025.
During our audit procedures performed over the Schedule of Expenditures of Federal Awards and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) we noted the County reported expenditures totaling $5,820,436 that should have been reported on the FY 2023 SEFA, as the granting agency approved the expenditures in FY 2023 and the County incurred the expenditures prior to June 30, 2023. Cause: The County lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Effect: The initial FY 2024 SEFA provided was overstated by $5,820,436. However, we noted these expenditures would not have had a material effect on the FY 2023 SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish policies and implement internal controls to ensure that expenditures are reported on the SEFA in accordance with program requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-011 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Financial Assistance Listing Number: 97.036 Federal Grantor: U.S. Department of Homeland Security Pass Through: California Office of Emergency Services Award No. and Year: 059-00000 Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: In accordance with the 2024 OMB Compliance Supplement, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when (1) FEMA has approved the nonfederal entity’s Project, and (2) the nonfederal entity has incurred the eligible expenditures. FEMA’s approval of a subaward is indicated when FEMA obligates the federal share of the eligible project cost to the recipient. Federal awards expended in years subsequent to the fiscal year in which the Project is approved are to be recorded on the nonfederal entity’s SEFA in those subsequent years. In addition, section 200.303 of the Uniform Guidance states that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the Schedule of Expenditures of Federal Awards and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) we noted the County reported expenditures totaling $5,820,436 that should have been reported on the FY 2023 SEFA, as the granting agency approved the expenditures in FY 2023 and the County incurred the expenditures prior to June 30, 2023. Cause: The County lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Effect: The initial FY 2024 SEFA provided was overstated by $5,820,436. However, we noted these expenditures would not have had a material effect on the FY 2023 SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish policies and implement internal controls to ensure that expenditures are reported on the SEFA in accordance with program requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-011 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Financial Assistance Listing Number: 97.036 Federal Grantor: U.S. Department of Homeland Security Pass Through: California Office of Emergency Services Award No. and Year: 059-00000 Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: In accordance with the 2024 OMB Compliance Supplement, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when (1) FEMA has approved the nonfederal entity’s Project, and (2) the nonfederal entity has incurred the eligible expenditures. FEMA’s approval of a subaward is indicated when FEMA obligates the federal share of the eligible project cost to the recipient. Federal awards expended in years subsequent to the fiscal year in which the Project is approved are to be recorded on the nonfederal entity’s SEFA in those subsequent years. In addition, section 200.303 of the Uniform Guidance states that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the Schedule of Expenditures of Federal Awards and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) we noted the County reported expenditures totaling $5,820,436 that should have been reported on the FY 2023 SEFA, as the granting agency approved the expenditures in FY 2023 and the County incurred the expenditures prior to June 30, 2023. Cause: The County lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Effect: The initial FY 2024 SEFA provided was overstated by $5,820,436. However, we noted these expenditures would not have had a material effect on the FY 2023 SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We the recommend that the County establish policies and implement internal controls to ensure that expenditures are reported on the SEFA in accordance with program requirements. Management Response and Corrective Action: 1. Person Responsible: Trevor Richardson, OCPW Emergency Manager 2. Corrective Action Plan: Due to the change in reporting guidance, we will now report the full amount of the award in the fiscal year it is approved, based on the obligation letter, instead of on a cash basis. 3. Anticipated Implementation date: Effective immediately for FY24-25.
During our testing of the HCA’s compliance with procurement and suspension and debarment requirements, we noted for two (2) of four (4) samples tested the following information was not provided at the time of the contract award: - Clean Air Act and the Federal Water Pollution Control Act We noted that the tested vendors had been notified of these contract provisions via email. However, there was no certification or acknowledgement obtained from the vendors to accept the contract provisions. Cause: The HCA did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors at the time the contract was entered into. Effect: The HCA department did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) of eleven (11) procurement contracts were sampled. The condition above was identified during our procedures over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA department modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contracts in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-012 Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non- Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: During our testing of the HCA’s compliance with procurement and suspension and debarment requirements, we noted for two (2) of four (4) samples tested the following information was not provided at the time of the contract award: - Clean Air Act and the Federal Water Pollution Control Act We noted that the tested vendors had been notified of these contract provisions via email. However, there was no certification or acknowledgement obtained from the vendors to accept the contract provisions. Cause: The HCA did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors at the time the contract was entered into. Effect: The HCA department did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) of eleven (11) procurement contracts were sampled. The condition above was identified during our procedures over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA department modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contracts in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-012 Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: During our testing of the HCA’s compliance with procurement and suspension and debarment requirements, we noted for two (2) of four (4) samples tested the following information was not provided at the time of the contract award: • Clean Air Act and the Federal Water Pollution Control Act We noted that the tested vendors had been notified of these contract provisions via email. However, there was no certification or acknowledgement obtained from the vendors to accept the contract provisions. Cause: The HCA did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors at the time the contract was entered into. Effect: The HCA department did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) of eleven (11) procurement contracts were sampled. The condition above was identified during our procedures over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA department modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contracts in accordance with 2 CFR Appendix II to Part 200. Management Response and Corrective Action: 1. Person Responsible: Juan Corral, HCA Procurement & Contracts Division Manager 2. Corrective Action Plan: HCA will review all federally funded contracts to ensure all necessary federal provisions, including Clean Air Act and Federal Water Pollution Control Act are included. If they are not, HCA will issue contract amendments to cure this deficiency. HCA conducted an all-staff training regarding the federal audit requirements on March 20, 2025. 3. Anticipated Implementation date: June 30, 2025
Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether there were any differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the department’s property records in total. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-013 Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Equipment and Real Property Management Type of Finding: Material Weakness in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: In accordance with 2 CFR section 200.313(d)(1), 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 Federal Award Identification Number), who holds title, the acquisition date, 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: Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether there were any differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the department’s property records in total. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-013 Program: Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Equipment and Real Property Management Type of Finding: Material Weakness in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: In accordance with 2 CFR section 200.313(d)(1), 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 Federal Award Identification Number), who holds title, the acquisition date, 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: Property records were not maintained in accordance with Uniform Guidance for all property and equipment purchased. As a result, we were unable to (1) test whether there were any differences between the physical inventory and equipment records were resolved and (2) sample equipment from the property records and physically inspect the equipment and determine whether the equipment is appropriately safeguarded and maintained. Cause: The HCA department did not have adequate internal controls to ensure its property records included all the requirements under Uniform Guidance or properly identify all property and equipment purchased with federal funds. Effect: Property records were not adequately maintained. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. We examined the department’s property records in total. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA department enhance internal controls to ensure its property records include all the requirements under Uniform Guidance and properly identify all property and equipment purchased with federal funds. Management Response and Corrective Action: 1. Person Responsible: Tommy Bui, HCA Property Officer 2. Corrective Action Plan: County of Orange has implemented a new Asset tracking system that has fields which allow departments to identify the funding source. HCA is currently migrating and cleansing data from a legacy asset solution to this new system, OpenGov. 3. Anticipated Implementation date: June 30, 2025
During our testing of the SSA’s compliance with eligibility and allowable cost/cost principles, we noted the following: For two (2) out of forty (40) cases selected for testing, the participants’ country of origin did not meet the general eligibility requirements of the program. For two (2) out of forty (40) cases selected for testing, participants received cash assistance outside of the eligibility period. For six (6) out of forty (40) cases selected for testing, the SSA did not retain the required documentation to evidence eligibility under the program. Cause: The SSA did not follow their policies to verify and withhold the information described in the condition and did not consistently ensure that participants were eligible. Effect: Benefits were provided to ineligible participants. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance or cases in which there was insufficient documentation to substantiate the eligibility determination was $7,578. Context/Sampling: A nonstatistical sample of forty (40) out of all active program participants were sampled. For ineligible or unsupported cases we have projected the amount of questioned costs against the remaining population for a total of $460,581. The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding: No. Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria are properly supported and retained in case files. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-014 Program: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Eligibility Type of Finding: Material Deficiency in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. Per Title 45 Subtitle B Chapter IV Part 400 Subpart E Section 400.53, General Eligibility Requirement, states that eligibility for refugee cash assistance is limited to those who: (1) Are new arrivals who have resided in the U.S. less than the RCA eligibility period determined by the Office of Refugee Resettlement (ORR) Director in accordance with Section 400.211; (2) Are ineligible for TANF, SSI, OAA, AB, APTDD, and AABD programs; (3) Meet immigration status and identification requirements in Subpart D (Immigration Status and Identification of Refugees); (4) Are not full-time students in institutions of higher education, as defined by the ORR. Per Title 45 Subtitle B Chapter IV Part 400 Subpart E Section 400.66, Eligibility and payment levels in a publicly-administered RCA program, states that in administering a publicly-administered refugee cash assistance program, the agency must operate its refugee cash assistance program consistent with the provisions of its TANF program including the determination of initial and ongoing eligibility. Condition: During our testing of the SSA’s compliance with eligibility and allowable cost/cost principles, we noted the following: For two (2) out of forty (40) cases selected for testing, the participants’ country of origin did not meet the general eligibility requirements of the program. For two (2) out of forty (40) cases selected for testing, participants received cash assistance outside of the eligibility period. For six (6) out of forty (40) cases selected for testing, the SSA did not retain the required documentation to evidence eligibility under the program. Cause: The SSA did not follow their policies to verify and withhold the information described in the condition and did not consistently ensure that participants were eligible. Effect: Benefits were provided to ineligible participants. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance or cases in which there was insufficient documentation to substantiate the eligibility determination was $7,578. Context/Sampling: A nonstatistical sample of forty (40) out of all active program participants were sampled. For ineligible or unsupported cases we have projected the amount of questioned costs against the remaining population for a total of $460,581. The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding: No. Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria are properly supported and retained in case files. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-014 Program: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Eligibility Type of Finding: Material Deficiency in Internal Control Over Compliance and Material Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. Per Title 45 Subtitle B Chapter IV Part 400 Subpart E Section 400.53, General Eligibility Requirement, states that eligibility for refugee cash assistance is limited to those who: (1) Are new arrivals who have resided in the U.S. less than the RCA eligibility period determined by the Office of Refugee Resettlement (ORR) Director in accordance with Section 400.211; (2) Are ineligible for TANF, SSI, OAA, AB, APTDD, and AABD programs; (3) Meet immigration status and identification requirements in Subpart D (Immigration Status and Identification of Refugees); (4) Are not full-time students in institutions of higher education, as defined by the ORR. Per Title 45 Subtitle B Chapter IV Part 400 Subpart E Section 400.66, Eligibility and payment levels in a publicly-administered RCA program, states that in administering a publicly-administered refugee cash assistance program, the agency must operate its refugee cash assistance program consistent with the provisions of its TANF program including the determination of initial and on-going eligibility. Condition: During our testing of the SSA’s compliance with eligibility and allowable cost/cost principles, we noted the following: For two (2) out of forty (40) cases selected for testing, the participants’ country of origin did not meet the general eligibility requirements of the program. For two (2) out of forty (40) cases selected for testing, participants received cash assistance outside of the eligibility period. For six (6) out of forty (40) cases selected for testing, the SSA did not retain the required documentation to evidence eligibility under the program. Cause: The SSA did not follow their policies to verify and withhold the information described in the condition and did not consistently ensure that participants were eligible. Effect: Benefits were provided to ineligible participants. Questioned Costs: Questioned costs for cases tested in which we determined to be ineligible to receive cash assistance or cases in which there was insufficient documentation to substantiate the eligibility determination was $7,578. Context/Sampling: A nonstatistical sample of forty (40) out of all active program participants were sampled. For ineligible or unsupported cases we have projected the amount of questioned costs against the remining population for a total of $460,581. The condition above was identified during our procedures over eligibility, activities allowed or unallowed, and allowable costs/cost principles testing. Repeat Finding: No Recommendation: We recommend that the SSA department strengthen its internal controls to ensure that program eligibility criteria are properly supported and retained in case files. Management Response and Corrective Action: 1. Person Responsible: Rosa Palacios, Human Services Manager 2. Corrective Action Plan: SSA will implement the following to enhance internal controls over compliance with eligibility: • Policy and Procedure Review & Update: Review and update existing policies and procedures to ensure clarity of eligibility criteria, including country of origin, eligibility period, and documentation retention requirements. These actions will provide clearer guidelines to prevent future eligibility issues and ensure proper documentation retention. Complete by April 2025. • Ongoing Monitoring & Compliance Review: Establish a dedicated team to perform monthly reviews of all approved cases, ensuring compliance with eligibility requirements. A monthly report will detail trends, non-compliance issues, and corrective actions results. With these actions, we will have continuous oversight and prompt corrective actions to maintain program integrity. Implement reviews by May 2025. • Mandatory Eligibility Checklist: Implement a mandatory eligibility checklist for all staff to confirm the required eligibility documents, system entries, and action notices at initial application and semi-annual reporting. These actions ensure staff consistently follow eligibility requirements and semi-annual reporting processes. Implement by May 2025. 3. Anticipated Implementation date: April 2025 and May 2025
During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: Medicaid Cluster (93.558) - $16,329 Foster Care Title IV-E (93.658) - $17,009 Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴2024-015 Program: Medicaid Cluster, Foster Care Title IV-E, Temporary Assistance for Needy Families, Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.778, 93.658, 93.558, 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.413(c)(1), Direct Costs, state that direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs. 2 CFR Section 200.416(b), Cost Allocation Plans and Indirect Cost Proposals, states that individual departments typically charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate proposal for each operating department is usually necessary to claim indirect costs under Federal awards. Indirect costs include (1) the indirect costs originating in each operating department of the State, local government, or Indian Tribe carrying out Federal awards; and (2) the costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs. Condition: During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: Medicaid Cluster (93.558) - $16,329 Foster Care Title IV-E (93.658) - $17,009 Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-015 Program: Medicaid Cluster, Foster Care Title IV-E, Temporary Assistance for Needy Families, Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.778, 93.658, 93.558, 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.413(c)(1), Direct Costs, state that direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs. 2 CFR Section 200.416(b), Cost Allocation Plans and Indirect Cost Proposals, states that individual departments typically charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate proposal for each operating department is usually necessary to claim indirect costs under Federal awards. Indirect costs include (1) the indirect costs originating in each operating department of the State, local government, or Indian Tribe carrying out Federal awards; and (2) the costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs. Condition: During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: • Medicaid Cluster (93.558) - $16,329 • Foster Care Title IV-E (93.658) - $17,009 • Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Management Response and Corrective Action: 1. Person Responsible: Jackqueline Ly, Financial Services Fiscal Administrator 2. Corrective Action Plan: SSA will work with other county agency’s financial team to ensure all transactions affecting SSA's ledger are reviewed and posted correctly. Conduct a monthly reconciliation of cost pool to verify compliance with allowable cost principles and provide more regular trainings for staff involved in cost allocations and expense tracking/reporting. 3. Anticipated Implementation date: April 2025
FAC accepted this audit on March 19, 2024 — management decision was due September 19, 2024.
The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2301CAFOST and 2023, 2201CAFOST and 2022 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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 200.501. The California Department of Social Services further clarifies in its County Fiscal Letter No. 22/23-91 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-001 Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2301CAFOST and 2023, 2201CAFOST and 2022 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: • 2 CFR Part 200.332(a), Requirements for Pass-Through Entities, states that all pass- through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. • 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). • 2 CFR 200.332(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. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). • 2 CFR 200.332(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 200.501. The California Department of Social Services further clarifies in its County Fiscal Letter No. 22/23- 91 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are “considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients”. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, “counties are still ultimately responsible for review of these audits and their findings, any follow- up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.” 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 – 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: The Social Services Agency (SSA) did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring or for subrecipient monitoring for the Foster Care program. Additionally, the following information was not provided at the time of the subaward for ten (10) of fourteen (14) subawards selected for testing from the SSA’s for the Foster Care program: • Subrecipient’s unique entity identifier • Federal award identification number • Federal award date of award to recipient by the Federal agency • Subaward period of performance • Amount of federal funds obligated to the subrecipient • Amount of federal funds committed to the subrecipient • Federal award project description • Name of federal awarding agency • CFDA/Assistance Listing number • Identification of whether the award is research and development • Indirect cost rate During our testing, we noted for four (4) of fourteen (14) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County’s policy was to verify the subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA’s procedures did not consistently ensure that the required award information and applicable requires were communicated to the subrecipients. The SSA did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the SSA did not maintain documentation of their verification that every subrecipient is audited, as required. Additionally, the SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County’s control policies were not consistently followed which require compliance with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Additionally, the County’s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of fourteen (14) out of seventy (70) subrecipients were sampled, which included seven (7) FFA, and seven (7) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Findings from Prior Years: Yes, Finding 2022-002,2022-005 and 2022-006. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. We recommend that the County adhere to their procedures requiring documentation of the SAM clearance prior to entering the contract. Management Response and Corrective Action: Social Services Agency: 1. Person Responsible: Kristi Fiskum, Human Services Deputy Director and Karen Vu, Procurement Contract Manager, Senior 2. Corrective Action Plan: SSA has revised its Subrecipient Monitoring Policy in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements and the updated policy was implemented in September 2023. A check list has been developed to track monitoring requirements and was also implemented in September 2023. 3. Anticipated Implementation Date: Fully implemented as of September 2023
2022-002, 2022-005, 2022-006
During our testing of the Orange County Public Works (OCPW), Orange County Community Resources (OCCR) and the Social Services Agency’s (SSA) provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted the following instances where there was no evidence that the OCPW, OCCR or SSA departments verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: • Four (4) of four (4) contracts through the OCPW department selected for testing. • Three (3) of eight (8) contracts through the OCCR department selected for testing. • One (1) of one (1) contract through the SSA department selected for testing. The following information was not provided at the time of the contract award for four (4) of four (4) contracts selected for testing within the OCPW department, one (1) of one (1) contract selected within SSA, and five (5) of eight (8) contracts selected for testing within the OCCR department: • Byrd Anti-Lobbying Amendment • Clean Air Act and Federal Pollution Control Act provision The following information was not provided at the time of the contract award for two (2) of four (4) contracts selected for testing within the OCPW department and one (1) of one (1) contract selected for testing within SSA: • Contract Work Hours and Safety Standards Act provision The following information was not provided at the time of the contract award for one (1) of one contract selected for testing within SSA: • Davis-Bacon Act provision • Equal Employment Opportunity provision Cause: The OCPW, OCCR and SSA departments did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The County’s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. EB reviewed the vendor’s status on SAM.gov and verified the vendors selected for testing were not suspended and debarred at the date of the audit. Additionally, the OCPW, SSA and OCCR departments did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) out of twelve (12) procurement contracts were sampled from OCPW and eight (8) out of nineteen (19) procurement contracts were sampled from OCCR for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. The entire population of 1 (contract) was tested from SSA for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Repeat Finding from Prior Years: Yes, Finding 2022-003 and 2022-009. Recommendation: We recommend that the OCPW, OCCR and SSA departments adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Additionally, we recommend the OCPW, SSA and OCCR departments modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: During our testing of the Orange County Public Works (OCPW), Orange County Community Resources (OCCR) and the Social Services Agency’s (SSA) provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted the following instances where there was no evidence that the OCPW, OCCR or SSA departments verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: • Four (4) of four (4) contracts through the OCPW department selected for testing. • Three (3) of eight (8) contracts through the OCCR department selected for testing. • One (1) of one (1) contract through the SSA department selected for testing. The following information was not provided at the time of the contract award for four (4) of four (4) contracts selected for testing within the OCPW department, one (1) of one (1) contract selected within SSA, and five (5) of eight (8) contracts selected for testing within the OCCR department: • Byrd Anti-Lobbying Amendment • Clean Air Act and Federal Pollution Control Act provision The following information was not provided at the time of the contract award for two (2) of four (4) contracts selected for testing within the OCPW department and one (1) of one (1) contract selected for testing within SSA: • Contract Work Hours and Safety Standards Act provision The following information was not provided at the time of the contract award for one (1) of one contract selected for testing within SSA: • Davis-Bacon Act provision • Equal Employment Opportunity provision Cause: The OCPW, OCCR and SSA departments did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The County’s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. EB reviewed the vendor’s status on SAM.gov and verified the vendors selected for testing were not suspended and debarred at the date of the audit. Additionally, the OCPW, SSA and OCCR departments did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) out of twelve (12) procurement contracts were sampled from OCPW and eight (8) out of nineteen (19) procurement contracts were sampled from OCCR for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. The entire population of 1 (contract) was tested from SSA for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Repeat Finding from Prior Years: Yes, Finding 2022-003 and 2022-009. Recommendation: We recommend that the OCPW, OCCR and SSA departments adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Additionally, we recommend the OCPW, SSA and OCCR departments modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-002 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non- Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: During our testing of the Orange County Public Works (OCPW), Orange County Community Resources (OCCR) and the Social Services Agency’s (SSA) provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted the following instances where there was no evidence that the OCPW, OCCR or SSA departments verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: • Four (4) of four (4) contracts through the OCPW department selected for testing. • Three (3) of eight (8) contracts through the OCCR department selected for testing. • One (1) of one (1) contract through the SSA department selected for testing. The following information was not provided at the time of the contract award for four (4) of four (4) contracts selected for testing within the OCPW department, one (1) of one (1) contract selected within SSA, and five (5) of eight (8) contracts selected for testing within the OCCR department: • Byrd Anti-Lobbying Amendment • Clean Air Act and Federal Pollution Control Act provision The following information was not provided at the time of the contract award for two (2) of four (4) contracts selected for testing within the OCPW department and one (1) of one (1) contract selected for testing within SSA: • Contract Work Hours and Safety Standards Act provision The following information was not provided at the time of the contract award for one (1) of one contract selected for testing within SSA: • Davis-Bacon Act provision • Equal Employment Opportunity provision Cause: The OCPW, OCCR and SSA departments did not follow their policy to verify the information described in the condition prior to entering the transactions and did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The County’s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. EB reviewed the vendor’s status on SAM.gov and verified the vendors selected for testing were not suspended and debarred at the date of the audit. Additionally, the OCPW, SSA and OCCR departments did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) out of twelve (12) procurement contracts were sampled from OCPW and eight (8) out of nineteen (19) procurement contracts were sampled from OCCR for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. The entire population of 1 (contract) was tested from SSA for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Repeat Finding from Prior Years: Yes, Finding 2022-003 and 2022-009. Recommendation: We recommend that the OCPW, OCCR and SSA departments adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Additionally, we recommend the OCPW, SSA and OCCR departments modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. Management Response and Corrective Action: Orange County Community Resources: 1. Person Responsible: Isela Martinez, OCCR Procurement Manager 2. Corrective Action Plan: The contracts in question were originally funded by the County General Fund. OCCR Procurement team was not aware that the funding source changed to Coronavirus funds during the contract period. OCCR will update internal procedures to ensure procurement is notified when the contract funding source changes to federal funding, triggering the additional federal provisions mentioned above. 3. Anticipated Implementation Date: September 30, 2024 Orange County Public Works: 1. Person Responsible: Joseph Sly, OCPW Procurement Manager 2. Corrective Action Plan: The contracts in question were originally funded by the County. OCPW Procurement was not aware that the funding source changed during the contract period. OCPW will update internal procedures to ensure funding agency provisions are met. 3. Anticipated Implementation Date: September 30, 2024 Social Services Agency: 1. Person Responsible: Alin Buna, SSA Procurement Manager 2. Corrective Action Plan: SSA Procurement did not execute the specified contracts. When executing the specified contracts, OCPW, on behalf of SSA, was not aware of federal funding being included. SSA will ensure that agencies executing contracts on behalf of SSA will be notified if federal funding is included for specific projects to ensure proper procedures have been followed when the contracts have been executed. 3. Anticipated Implementation Date: September 30, 2024
2022-003, 2022-009
During our testing of the Health Care Agency’s (HCA) compliance with reporting requirements, we noted that four (4) of four (4) reports the department did not retain evidence of the review and approval over the performance report. Cause: HCA personnel prepared program required performance reports and submitted the reports without retaining documented evidence that the reports were reviewed and approved by a separate individual prior to submission. Effect: The County did not document their review and approval of the report. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of four (4) reports were selected for reporting testwork from HCA. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA to implement policies that ensure the review and approval of reports are clearly documented prior to the report’s submission. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health and Healthcare Crises Federal Financial Assistance Listing Number: 93.391 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 2022 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: During our testing of the Health Care Agency’s (HCA) compliance with reporting requirements, we noted that four (4) of four (4) reports the department did not retain evidence of the review and approval over the performance report. Cause: HCA personnel prepared program required performance reports and submitted the reports without retaining documented evidence that the reports were reviewed and approved by a separate individual prior to submission. Effect: The County did not document their review and approval of the report. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of four (4) reports were selected for reporting testwork from HCA. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA to implement policies that ensure the review and approval of reports are clearly documented prior to the report’s submission. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-003 Program: COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health and Healthcare Crises Federal Financial Assistance Listing Number: 93.391 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 2022 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: During our testing of the Health Care Agency’s (HCA) compliance with reporting requirements, we noted for four (4) of four (4) reports the department did not retain evidence of the review and approval over the performance report. Cause: HCA personnel prepared program required performance reports and submitted the reports without retaining documented evidence that the reports were reviewed and approved by a separate individual prior to submission. Effect: The County did not document their review and approval of the report. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of four (4) reports were selected for reporting testwork from HCA. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA to implement policies that ensure the review and approval of reports are clearly documented prior to the report’s submission. Management Response and Corrective Action: Health Care Agency: 1. Person Responsible: Hieu Nguyen, HCA Office of Population Health and Equity Director 2. Corrective Action Plan: HCA Office of Population Health and Equity will implement procedures that ensure review/approval prior to report submission to the Center for Disease Prevention and Control. 3. Anticipated Implementation Date: April 1, 2024
During our testing of the Health Care Agency’s (HCA) compliance with allowable activities and allowable costs and cost principles requirements, we noted for one (1) of forty-seven (47) transactions HCA did not retain evidence of the review and approval over the transaction. Cause: The transaction was with a specific vendor that requires orders to be placed on the vendor’s portal. At the time the order was placed, the vendor’s portal did not have a system control set up to require a separate approver for the order and HCA did not retain any other evidence to document the order’s review and approval. The vendor portal was later updated during the year to add the segregation of duties system control. Effect: The County’s control was not consistently followed, which requires transactions to be reviewed and approved by a separate individual prior to payment. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of forty-seven (47) of two hundred thirty-six (236) transactions were selected for HCA. The condition above was identified during our testwork of the HCA’s internal controls over allowable activities and allowable costs and cost principles. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and ensure the review and approval of transactions are clearly documented prior payment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Federal Financial Assistance Listing Number: 93.391 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 2022 Compliance Requirements: Allowable Activities and Allowable Costs and Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: During our testing of the Health Care Agency’s (HCA) compliance with allowable activities and allowable costs and cost principles requirements, we noted for one (1) of forty-seven (47) transactions HCA did not retain evidence of the review and approval over the transaction. Cause: The transaction was with a specific vendor that requires orders to be placed on the vendor’s portal. At the time the order was placed, the vendor’s portal did not have a system control set up to require a separate approver for the order and HCA did not retain any other evidence to document the order’s review and approval. The vendor portal was later updated during the year to add the segregation of duties system control. Effect: The County’s control was not consistently followed, which requires transactions to be reviewed and approved by a separate individual prior to payment. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of forty-seven (47) of two hundred thirty-six (236) transactions were selected for HCA. The condition above was identified during our testwork of the HCA’s internal controls over allowable activities and allowable costs and cost principles. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and ensure the review and approval of transactions are clearly documented prior payment. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-004 Program: COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises Federal Financial Assistance Listing Number: 93.391 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: 2022 Compliance Requirements: Allowable Activities and Allowable Costs and Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: During our testing of the Health Care Agency’s (HCA) compliance with allowable activities and allowable costs and cost principles requirements, we noted for one (1) of forty-seven (47) transactions HCA did not retain evidence of the review and approval over the transaction. Cause: The transaction was with a specific vendor that requires orders to be placed on the vendor’s portal. At the time the order was placed, the vendor’s portal did not have a system control set up to require a separate approver for the order and HCA did not retain any other evidence to document the order’s review and approval. The vendor portal was later updated during the year to add the segregation of duties system control. Effect: The County’s control was not consistently followed, which requires transactions to be reviewed and approved by a separate individual prior to payment. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of forty-seven (47) of two hundred thirty-six (236) transactions were selected for HCA. The condition above was identified during our testwork of the HCA’s internal controls over allowable activities and allowable costs and cost principles. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and ensure the review and approval of transactions are clearly documented prior payment. Management Response and Corrective Action: Health Care Agency: 1. Person Responsible: Hieu Nguyen, HCA Office of Population Health and Equity Director 2. Corrective Action Plan: HCA Office of Population Health and Equity will implement procedures that ensure review/approval of the e-commerce transactions are documented prior to payment. 3. Anticipated Implementation Date: April 1, 2024
FAC accepted this audit on March 30, 2023 — management decision was due September 30, 2023.
Expenditure information was materially different from expenditures reported on the SEFA. This was due to the County identifying additional expenditures after year-end, related to the June 30, 2022 fiscal year. Cause: The County prepared the Project and Expenditure Reports as of a point in time, but internal controls did not allow for consistent reporting or expenditure recognition, to avoid material variances. Effect: Expenditure information in the Project and Expenditure Reports for December 2021, March 2022, and June 2022 reflected modified cash basis expenditures at a point in time, but contained material differences from the amounts included in the SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of three (3) out of four (4) Project and Expenditure Reports submitted during the year were selected for reporting testing. The cumulative impact is as follows: ? Cumulative expenditure o Reported - $89,613,061 o Per audit/supporting records - $296,907,350, a difference of $207,294,289 Repeat Findings from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure Project and Expenditure Reports are prepared in accordance with governing requirements, and updated timely if revisions are made by the County, to avoid material variances to the underlying expenditures reported on the SEFA. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The OMB Approved Award No. 1505-0271 requires that reports submitted to the federal awarding agency include all activity of the reporting period, and are supported by applicable accounting or performance records. The County of Orange (the County) must submit quarterly Project and Expenditure Reports that contain costs incurred during the covered period. Critical information includes: ? Obligations and Expenditures o Current period obligation o Cumulative obligation o Current period expenditure o Cumulative expenditure ? Subawards ? Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities and direct payments made by the recipient. Condition: Expenditure information was materially different from expenditures reported on the SEFA. This was due to the County identifying additional expenditures after year-end, related to the June 30, 2022 fiscal year. Cause: The County prepared the Project and Expenditure Reports as of a point in time, but internal controls did not allow for consistent reporting or expenditure recognition, to avoid material variances. Effect: Expenditure information in the Project and Expenditure Reports for December 2021, March 2022, and June 2022 reflected modified cash basis expenditures at a point in time, but contained material differences from the amounts included in the SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of three (3) out of four (4) Project and Expenditure Reports submitted during the year were selected for reporting testing. The cumulative impact is as follows: ? Cumulative expenditure o Reported - $89,613,061 o Per audit/supporting records - $296,907,350, a difference of $207,294,289 Repeat Findings from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure Project and Expenditure Reports are prepared in accordance with governing requirements, and updated timely if revisions are made by the County, to avoid material variances to the underlying expenditures reported on the SEFA. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The OMB Approved Award No. 1505-0271 requires that reports submitted to the federal awarding agency include all activity of the reporting period, and are supported by applicable accounting or performance records. The County of Orange (the County) must submit quarterly Project and Expenditure Reports that contain costs incurred during the covered period. Critical information includes: ? Obligations and Expenditures o Current period obligation o Cumulative obligation o Current period expenditure o Cumulative expenditure ? Subawards ? Detailed information on any loans issued; contracts and grants awarded; transfers made to other government entities; and direct payments made by the recipient that are greater than $50,000. For amounts less than $50,000, the recipient must report in the aggregate for these same categories of loans issued; contracts and grants awarded; transfers made to other government entities and direct payments made by the recipient. Condition: Expenditure information was materially different from expenditures reported on the SEFA. This was due to the County identifying additional expenditures after year-end, related to the June 30, 2022 fiscal year. Cause: The County prepared the Project and Expenditure Reports as of a point in time, but internal controls did not allow for consistent reporting or expenditure recognition, to avoid material variances. Effect: Expenditure information in the Project and Expenditure Reports for December 2021, March 2022, and June 2022 reflected modified cash basis expenditures at a point in time, but contained material differences from the amounts included in the SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of three (3) out of four (4) Project and Expenditure Reports submitted during the year were selected for reporting testing. The cumulative impact is as follows: ? Cumulative expenditure o Reported - $89,613,061 o Per audit/supporting records - $296,907,350, a difference of $207,294,289 Repeat Findings from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure Project and Expenditure Reports are prepared in accordance with governing requirements, and updated timely if revisions are made by the County, to avoid material variances to the underlying expenditures reported on the SEFA. Management Response and Corrective Action: Auditor Controller: 1. Person Responsible: Bertalicia Tapia, Financial Reporting & Mandated Costs (FRMC) Manager 2. Corrective Action Plan: While the County reconciles the Project and Expenditure Reports filed with the US Treasury to the County?s accounting records, a temporary difference between the reported amounts on the SEFA and US Treasury reports was caused by a one-time permitted adjustment to reallocate expenditures for government services subsequent to filing the US Treasury reports. While currently in compliance with US Treasury reporting guidelines, the County will reflect the permitted adjustment on its subsequent quarterly Project and Expenditure Report due to the US Treasury on April 30, 2023. 3. Anticipated Implementation date: April 30, 2023
The County did not have any formal controls or procedures in place for subrecipient monitoring for the Foster Care program. Cause: The County did not maintain procedures to monitor the activities of each subrecipient, or verify that every subrecipient is audited, as required. Effect: The County did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of 53 subrecipients were sampled, which included six (6) FFA, and two (2) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring, and was pervasive to the program. Repeat Findings from Prior Years: No. Recommendation: We recommend that the County implement policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2201CAFOST and 2022, 2101CAFOST and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: ? 2 CFR 200.332(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. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). ? 2 CFR 200.332(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 200.501. The California Department of Social Services further clarifies in its County Fiscal Letter No. 21/22 ? 115 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are ?considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients?. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, ?counties are still ultimately responsible for review of these audits and their findings, any follow-up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.? Condition: The County did not have any formal controls or procedures in place for subrecipient monitoring for the Foster Care program. Cause: The County did not maintain procedures to monitor the activities of each subrecipient, or verify that every subrecipient is audited, as required. Effect: The County did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of 53 subrecipients were sampled, which included six (6) FFA, and two (2) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring, and was pervasive to the program. Repeat Findings from Prior Years: No. Recommendation: We recommend that the County implement policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2201CAFOST and 2022, 2101CAFOST and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: ? 2 CFR 200.332(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. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). ? 2 CFR 200.332(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 200.501. The California Department of Social Services further clarifies in its County Fiscal Letter No. 21/22 ? 115 that Foster Family Agency (FFA), Group Home, and Short Term Residential Therapeutic Programs (STRTP) are ?considered subrecipients and subject to the same audit requirements and require the same degree of oversight as other subrecipients?. Further, while there are some licensing and oversight functions performed by the state over FFAs, group homes, and STRTPs, ?counties are still ultimately responsible for review of these audits and their findings, any follow- up to ensure compliance, and any other form of monitoring and oversight required by federal and state laws and regulations.? Condition: The County did not have any formal controls or procedures in place for subrecipient monitoring for the Foster Care program. Cause: The County did not maintain procedures to monitor the activities of each subrecipient, or verify that every subrecipient is audited, as required. Effect: The County did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of 53 subrecipients were sampled, which included six (6) FFA, and two (2) STRTP types. The condition noted above was identified during our procedures related to subrecipient monitoring, and was pervasive to the program. Repeat Findings from Prior Years: No. Recommendation: We recommend that the County implement policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Management Response and Corrective Action: Social Services Agency: 1. Person Responsible: Kristi Fiskum, Deputy Division Director, Family Assessment & Shelter Services and Karen Vu, Administrative Manager II, Contracts Services 2. Corrective action plan: SSA will revise its current Subrecipient Monitoring Policy in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. SSA will include procedures for verifying that every subrecipient is audited and a monitoring checklist will be developed to track activities. 3. Anticipated Implementation date: July 1, 2023
During our testing of the Orange County Public Works (OCPW) and the County Executive Office?s (CEO) provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted the following instances where there was no evidence that the OCPW or CEO departments verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy ? Three (3) of three (3) contracts through the OCPW department selected for testing. ? Two (2) of six (6) contracts through the CEO department selected for testing. Cause: The OCPW, and CEO departments did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of eight (8) procurement contracts were sampled from OCPW and six (6) out of fourteen (14) procurement contracts were sampled from the CEO department for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. The condition above was identified during our testwork of the OCPW and CEO departments? internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the OCPW and CEO departments adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The 2022 Compliance Supplement states: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of the Orange County Public Works (OCPW) and the County Executive Office?s (CEO) provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted the following instances where there was no evidence that the OCPW or CEO departments verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy ? Three (3) of three (3) contracts through the OCPW department selected for testing. ? Two (2) of six (6) contracts through the CEO department selected for testing. Cause: The OCPW, and CEO departments did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of eight (8) procurement contracts were sampled from OCPW and six (6) out of fourteen (14) procurement contracts were sampled from the CEO department for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. The condition above was identified during our testwork of the OCPW and CEO departments? internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the OCPW and CEO departments adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The 2022 Compliance Supplement states: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of the Orange County Public Works (OCPW) and the County Executive Office?s (CEO) provisions for procurement requirements under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, we noted the following instances where there was no evidence that the OCPW or CEO departments verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy ? Three (3) of three (3) contracts through the OCPW department selected for testing. ? Two (2) of six (6) contracts through the CEO department selected for testing. Cause: The OCPW and CEO departments did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of eight (8) procurement contracts were sampled from OCPW and six (6) out of fourteen (14) procurement contracts were sampled from the CEO department for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds. The condition above was identified during our testwork of the OCPW and CEO departments? internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the OCPW and CEO departments adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Management Response and Corrective Action: County Executive Office: 1. Person Responsible: Selina Chan-Wychgel, Fiscal Services Manager 2. Corrective Action Plan: The County Executive Office will adhere to the Contract Policy Manual (CPM) and internal policy and procedure of ensuring the suspension or debarment verification of a contractor is performed and documented prior to awarding a contract. The County Procurement Office will continue to provide trainings and reminders to County-wide procurement staff of this guideline to ensure compliance with Federal Award protocol. 3. Anticipated Implementation date: June 30, 2023 OC Public Works: 1. Person Responsible: Joseph Sly 2. Corrective Action Plan: On October 21, 2022, OCPW Procurement updated the Department?s policy and procedure to include an additional requirement for the submission of the Alternative Funding Procurement Acknowledgement Form when utilizing non-County funding sources. The contracts selected in this audit were awarded prior to October 21, 2022. 3. Anticipated Implementation date: October 21, 2022
During our testing of Homeland Security Grant Program (HSGP) of the Sheriff-Coroner department?s provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for two (2) of two (2) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Further, onsite reviews were not performed. Cause: The Sheriff-Coroner department did not adhere to established policies and procedures relating to documentation of the risk assessment when a subrecipient contract is awarded. With respect to onsite reviews, these were not performed due to COVID restrictions. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for subrecipient monitoring testing from the Sheriff-Coroner department for the Homeland Security Grant Program. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff-Coroner department follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Homeland Security Grant Program Federal Financial Assistance Listing Number: 97.067 Federal Grantor: U.S. Department of Homeland Security Passed-Through: California Office of Emergency Services Award No. and Year: 2019-0035 and 2020; 2020-0095 and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of Homeland Security Grant Program (HSGP) of the Sheriff-Coroner department?s provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for two (2) of two (2) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Further, onsite reviews were not performed. Cause: The Sheriff-Coroner department did not adhere to established policies and procedures relating to documentation of the risk assessment when a subrecipient contract is awarded. With respect to onsite reviews, these were not performed due to COVID restrictions. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for subrecipient monitoring testing from the Sheriff-Coroner department for the Homeland Security Grant Program. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff-Coroner department follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Homeland Security Grant Program Federal Financial Assistance Listing Number: 97.067 Federal Grantor: U.S. Department of Homeland Security Passed-Through: California Office of Emergency Services Award No. and Year: 2019-0035 and 2020; 2020-0095 and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of Homeland Security Grant Program (HSGP) of the Sheriff-Coroner department?s provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for two (2) of two (2) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Further, onsite reviews were not performed. Cause: The Sheriff-Coroner department did not adhere to established policies and procedures relating to documentation of the risk assessment when a subrecipient contract is awarded. With respect to onsite reviews, these were not performed due to COVID restrictions. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for subrecipient monitoring testing from the Sheriff-Coroner department for the Homeland Security Grant Program. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff-Coroner department follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Management Response and Corrective Action: Sheriff-Coroner?s Department: 1. Person Responsible: Yumi Leung, Supervising Grants Manager 2. Corrective action plan: The Sheriff-Coroner Department will complete a pre-award risk assessment form at the time the subrecipient is notified of a subaward. The Sheriff-Coroner Department resumed subrecipient monitoring visits starting January 2023. Going forward, if on-site visits are not possible, virtual meetings with subrecipients will be conducted. 3. Anticipated Implementation date: June 2023
The following information was not provided at the time of the subaward for two (2) of two (2) subawards selected for testing from the Homeland Security Grant Program within the Sheriff-Coroner department: ? Federal award identification number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for seven (7) of eight (8) subawards selected for testing from the Social Services Agency?s (SSA) department for the Foster Care program: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Federal award date of award to recipient by the Federal agency ? Subaward period of performance ? Amount of federal funds obligated to the subrecipient ? Amount of federal funds committed to the subrecipient ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate Cause: The Sheriff-Coroner and SSA departments procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Effect: The Sheriff-Coroner and SSA departments did not identify the required elements of the subaward to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for subrecipient monitoring testing for HSGP ? Sheriff-Coroner department. A non-statistical sample of eight (8) of fifty-three (53) subrecipients were selected for subrecipient monitoring testing for the Foster Care program ? SSA. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff-Coroner and SSA departments modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Homeland Security Grant Program Federal Financial Assistance Listing Number: 97.067 Federal Grantor: U.S. Department of Homeland Security Passed-Through: California Office of Emergency Services Award No. and Year: 2019-0035 and 2020; 2020-0095 and 2021 Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2201CAFOST and 2022, 2101CAFOST and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of the subaward for two (2) of two (2) subawards selected for testing from the Homeland Security Grant Program within the Sheriff-Coroner department: ? Federal award identification number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for seven (7) of eight (8) subawards selected for testing from the Social Services Agency?s (SSA) department for the Foster Care program: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Federal award date of award to recipient by the Federal agency ? Subaward period of performance ? Amount of federal funds obligated to the subrecipient ? Amount of federal funds committed to the subrecipient ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate Cause: The Sheriff-Coroner and SSA departments procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Effect: The Sheriff-Coroner and SSA departments did not identify the required elements of the subaward to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for subrecipient monitoring testing for HSGP ? Sheriff-Coroner department. A non-statistical sample of eight (8) of fifty-three (53) subrecipients were selected for subrecipient monitoring testing for the Foster Care program ? SSA. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff-Coroner and SSA departments modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Homeland Security Grant Program Federal Financial Assistance Listing Number: 97.067 Federal Grantor: U.S. Department of Homeland Security Passed-Through: California Office of Emergency Services Award No. and Year: 2019-0035 and 2020; 2020-0095 and 2021 Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2201CAFOST and 2022, 2101CAFOST and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of the subaward for two (2) of two (2) subawards selected for testing from the Homeland Security Grant Program within the Sheriff-Coroner department: ? Federal award identification number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for seven (7) of eight (8) subawards selected for testing from the SSA department for the Foster Care program: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Federal award date of award to recipient by the Federal agency ? Subaward period of performance ? Amount of federal funds obligated to the subrecipient ? Amount of federal funds committed to the subrecipient ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate Cause: The Sheriff-Coroner and SSA departments procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Effect: The Sheriff-Coroner and SSA departments did not identify the required elements of the subaward to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for subrecipient monitoring testing for HSGP ? Sheriff-Coroner department. A non-statistical sample of eight (8) of fifty-three (53) subrecipients were selected for subrecipient monitoring testing for the Foster Care program ? SSA. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff-Coroner and SSA departments modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Management Response and Corrective Action: Sheriff-Coroner?s Department: 1. Person Responsible: Yumi Leung, Supervising Grants Manager 2. Corrective action plan: The Sheriff-Coroner Department will identify on future subaward letters whether the award is research and development, and whether there is an indirect cost rate for the federal award. 3. Anticipated Implementation date: June 2023 Social Services Agency: 1. Person Responsible: Karen Vu, Administrative Manager II, Contracts Services 2. Corrective action plan: SSA will revise the current Subrecipient Monitoring Policy and Procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). A check list will be developed to track activities and ensure that the required award information and applicable requirements were communicated to subrecipients. 3. Anticipated Implementation date: July 1, 2023
During our testing from the Foster Care Program of the SSA, we noted for one (1) of the eight (8) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County?s policy was to verify subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County?s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of eight (8) of fifty-three (53) subrecipients were selected for subrecipient monitoring testing from SSA for the Foster Care program. Repeat Findings from Prior Years: No. Recommendation: We recommend that SSA adhere to their procedures required documentation of the SAM check prior to entering the contract. View of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2201CAFOST and 2022, 2101CAFOST and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 ? 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: During our testing from the Foster Care Program of the SSA, we noted for one (1) of the eight (8) subrecipients selected, SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County?s policy was to verify subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County?s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of eight (8) of fifty-three (53) subrecipients were selected for subrecipient monitoring testing from SSA for the Foster Care program. Repeat Findings from Prior Years: No. Recommendation: We recommend that SSA adhere to their procedures required documentation of the SAM check prior to entering the contract. View of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2201CAFOST and 2022, 2101CAFOST and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR Section 180.300a, Responsibilities of Participants Regarding Doing Business with Other Persons (and repeated in the California Department of Social Services - County Fiscal Letter No. 21/22 ? 115) counties are required to verify that recipients or contracts have not been suspended or debarred by using the federal SAM (Systems for Award Management). Condition: During our testing from the Foster Care Program of the SSA, we noted for one (1) of the eight (8) subrecipients selected, the SSA did not have documentation that the SAM clearance was performed prior to entering the contract with the subrecipient. The County?s policy was to verify subrecipient was not suspended or debarred prior to entering the contract, but the County did not retain evidence of this check prior to entering the contract. Cause: The SSA department did not follow their policy to retain documentation of the verification of the information prior to entering the contract. Effect: The County?s control policies were not consistently followed, which required documentation of the verification prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of eight (8) of fifty-three (53) subrecipients were selected for subrecipient Monitoring testing from SSA for the Foster Care program. Repeat Findings from Prior Years: No. Recommendation: We recommend that SSA adhere to their procedures required documentation of the SAM check prior to entering the contract. Management Response and Corrective Action: Social Services Agency: 1. Person Responsible: Karen Vu, Administrative Manager II, Contract Services 2. Corrective action plan: A checklist will be developed listing all the required documentation to be completed, including the SAM clearance check, prior to entering into a contract with a vendor. Contracts staff will be required to complete the checklist prior to entering into a contract with a vendor and maintain documentation of the verification in the Contracts file. 3. Anticipated Implementation date: July 1, 2023
During our testing of the HCA?s provisions for reporting requirements, we noted the following instances for two (2) out of two (2) reports: ? The performance reports were not reviewed or approved prior to submission to the State. ? The department did not retain any supporting documents for the performance reports. Cause: The HCA department personnel prepared program required performance reports and submitted to the State without retaining evidence that the reports were reviewed and approved by a separate individual prior to submission. The HCA department did not retain any supporting documents for the performance reports submitted. Effect: The County?s control was not consistently followed, which requires reports to be reviewed and approved by a separate individual prior to submission to the State. Additionally, the HCA department did not adhere to their policies and procedures in place requiring record retention of supporting documentation. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) performance reports were selected for report testing for the Immunization Cooperative Agreements program. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and ensure the review and approval of reports are clearly documented prior to the report?s submission and adhere to their policies of record retention of supporting documents for the performance reports submitted to the State. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Immunization Cooperative Agreements Federal Financial Assistance Listing Number: 93.268 Federal Grantor: U.S. Department of Health and Human Services Passed-Through: California Department of Public Health Award No. and Year: 17-10336 A02 and 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.334, Retention requirements for records, states that 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 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: During our testing of the HCA?s provisions for reporting requirements, we noted the following instances for two (2) out of two (2) reports: ? The performance reports were not reviewed or approved prior to submission to the State. ? The department did not retain any supporting documents for the performance reports. Cause: The HCA department personnel prepared program required performance reports and submitted to the State without retaining evidence that the reports were reviewed and approved by a separate individual prior to submission. The HCA department did not retain any supporting documents for the performance reports submitted. Effect: The County?s control was not consistently followed, which requires reports to be reviewed and approved by a separate individual prior to submission to the State. Additionally, the HCA department did not adhere to their policies and procedures in place requiring record retention of supporting documentation. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) performance reports were selected for report testing for the Immunization Cooperative Agreements program. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and ensure the review and approval of reports are clearly documented prior to the report?s submission and adhere to their policies of record retention of supporting documents for the performance reports submitted to the State. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Immunization Cooperative Agreements Federal Financial Assistance Listing Number: 93.268 Federal Grantor: U.S. Department of Health and Human Services Passed-Through: California Department of Public Health Award No. and Year: 17-10336 A02 and 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.334, Retention requirements for records, states that 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 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: During our testing of the HCA?s provisions for reporting requirements, we noted the following instances for two (2) out of two (2) reports: ? The performance reports were not reviewed or approved prior to submission to the State. ? The department did not retain any supporting documents for the performance reports. Cause: The HCA department personnel prepared program required performance reports and submitted to the State without retaining evidence that the reports were reviewed and approved by a separate individual prior to submission. The HCA department did not retain any supporting documents for the performance reports submitted. Effect: The County?s control was not consistently followed, which requires reports to be reviewed and approved by a separate individual prior to submission to the State. Additionally, the HCA department did not adhere to their policies and procedures in place requiring record retention of supporting documentation. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) performance reports were selected for report testing for the Immunization Cooperative Agreements program. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and ensure the review and approval of reports are clearly documented prior to the report?s submission and adhere to their policies of record retention of supporting documents for the performance reports submitted to the State. Management Response and Corrective Action: Health Care Agency: 1. Person Responsible: Joshua Jacobs, HCA Public Health Services - Communicable Disease Control Division Director 2. Corrective action plan: HCA Public Health Services Communicable Disease Control Division will ensure retention of proper documentation supporting the performance reports and substantiating the review/approval prior to report submission to the State for the Immunization Cooperative Agreement. 3. Anticipated Implementation date: March 27, 2023
During our testing of the SSA?s provisions for reporting requirements, we noted the following instance where reports were prepared, reviewed, and approved by the same individual: ? Two (2) of four (4) reports for the SSA Cause: The SSA department did not have a segregation of duties over the preparation and review and approval of performance reports. Effect: The County?s control was not consistently followed, which requires reports to be reviewed and approved by a separate individual. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical of four (4) out of twelve (12) reports were selected for reporting testing from SSA. The condition above was identified during our testwork of the SSA?s internal controls over reporting. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA adhere to their policies and ensure segregation of duties over the preparation and review and approval of performance reports. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Social Services Award No. and Year: 2022 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: During our testing of the SSA?s provisions for reporting requirements, we noted the following instance where reports were prepared, reviewed, and approved by the same individual: ? Two (2) of four (4) reports for the SSA Cause: The SSA department did not have a segregation of duties over the preparation and review and approval of performance reports. Effect: The County?s control was not consistently followed, which requires reports to be reviewed and approved by a separate individual. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical of four (4) out of twelve (12) reports were selected for reporting testing from SSA. The condition above was identified during our testwork of the SSA?s internal controls over reporting. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA adhere to their policies and ensure segregation of duties over the preparation and review and approval of performance reports. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Foster Care Federal Financial Assistance Listing Number: 93.658 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Social Services Award No. and Year: 2022 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR Section 200.303(a), Internal Controls, 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: During our testing of the Social Services Agency?s (SSA) provisions for reporting requirements, we noted the following instance where reports were prepared, reviewed, and approved by the same individual: ? Two (2) of four (4) reports for the SSA Cause: The SSA department did not have a segregation of duties over the preparation and review and approval of performance reports. Effect: The County?s control was not consistently followed, which requires reports to be reviewed and approved by a separate individual. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical of four (4) out of twelve (12) reports were selected for reporting testing from SSA. The condition above was identified during our testwork of the SSA?s internal controls over reporting. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA adhere to their policies and ensure segregation of duties over the preparation and review and approval of performance reports. Management Response and Corrective Action: Social Services Agency: 1. Person Responsible: Silvia Fuller, Administrative Manager II, Research 2. Corrective action plan: SSA has normally adhered to policy of segregation of duties over the preparation and review and approval of performance reports. However, during 2021 the assignment of the CA 237 FC report fell to one individual due to staff vacancies caused by the COVID Pandemic. Effective August 2022, the report has been assigned to the Research Unit which is following and adhering to the policy of segregation of duties. 3. Anticipated Implementation date: Fully implemented as of August 2022
The following information was not provided at the time of the contract award for three (3) of three (3) contracts selected for testing within the OCPW department and four (4) out of six (6) contracts selected for testing within the CEO department: ? Byrd Anti-Lobbying Amendment The following information was not provided at the time of the contract award for three (3) of three (3) contracts selected for testing within the OCPW department and three (3) out of six (6) contracts selected for testing within the CEO department: ? Clean Air Act and Federal Water Pollution Control Act provision Cause: The OCPW and CEO departments? procedures did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The OCPW and CEO departments did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of three (3) contracts were selected for procurement and suspension and debarment testing for the OCPW department. A nonstatistical sample of six (6) out of fourteen (14) contracts were selected for procurement and suspension and debarment testing for the CEO department. Repeat Finding from Prior Years: No. Recommendation: We recommend the OCPW and CEO departments modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: The following information was not provided at the time of the contract award for three (3) of three (3) contracts selected for testing within the OCPW department and four (4) out of six (6) contracts selected for testing within the CEO department: ? Byrd Anti-Lobbying Amendment The following information was not provided at the time of the contract award for three (3) of three (3) contracts selected for testing within the OCPW department and three (3) out of six (6) contracts selected for testing within the CEO department: ? Clean Air Act and Federal Water Pollution Control Act provision Cause: The OCPW and CEO departments? procedures did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The OCPW and CEO departments did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of three (3) contracts were selected for procurement and suspension and debarment testing for the OCPW department. A nonstatistical sample of six (6) out of fourteen (14) contracts were selected for procurement and suspension and debarment testing for the CEO department. Repeat Finding from Prior Years: No. Recommendation: We recommend the OCPW and CEO departments modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Procurement Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR section Appendix II to Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards states that in addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain certain provisions, as applicable. Condition: The following information was not provided at the time of the contract award for three (3) of three (3) contracts selected for testing within the OCPW department and four (4) out of six (6) contracts selected for testing within the CEO department: ? Byrd Anti-Lobbying Amendment The following information was not provided at the time of the contract award for three (3) of three (3) contracts selected for testing within the OCPW department and three (3) out of six (6) contracts selected for testing within the CEO department: ? Clean Air Act and Federal Water Pollution Control Act provision Cause: The OCPW and CEO departments? procedures did not consistently ensure that the applicable required provisions were communicated to contractors. Effect: The OCPW and CEO departments did not identify the applicable required provisions of the contract to the contractors at the time of the contract award. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of three (3) contracts were selected for procurement and suspension and debarment testing for the OCPW department. A nonstatistical sample of six (6) out of fourteen (14) contracts were selected for procurement and suspension and debarment testing for the CEO department. Repeat Finding from Prior Years: No. Recommendation: We recommend the OCPW and CEO departments modify and strengthen its current policies and procedures to ensure that all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. Management Response and Corrective Action: OC Public Works: 1. Person Responsible: Joseph Sly 2. Corrective action plan: On October 21, 2022, OCPW Procurement updated the Department?s policy and procedure to include an additional requirement for the submission of the Alternative Funding Procurement Acknowledgement Form when utilizing non-County funding sources. The contracts selected in this audit were awarded prior to October 21, 2022. OCPW Procurement will revise the form to include additional contract language required by the funding agency. 3. Anticipated Implementation date: August 1, 2023 County Executive Office: 1. Person Responsible: Selina Chan-Wychgel, Fiscal Services Manager 2. Corrective action plan: The County Executive Office will adhere to the Contract Policy Manual (CPM) and internal policy and procedure of ensuring all applicable required provisions are communicated to contractors in accordance with 2 CFR Appendix II to Part 200. The County Procurement Office will strengthen its current policy and procedure of these provisions and continue to provide trainings and reminders to County-wide procurement staff of the related guideline to ensure compliance with Federal Award protocol. 3. Anticipated Implementation date: June 30, 2023
In establishing a new case, the client is certified to receive benefits for a one-year period (certification period). The intake and certification process require that information on the CF-37 and SAWS 2 be obtained to determine eligibility and assist in the benefit calculation. Further, prior to case worker approval of benefits, the Income Eligibility Verification System (IEVS) report is required to be processed in certain circumstances. During our testing of the SSA department?s provisions for special tests and provisions requirements relating to ADP System for SNAP, we noted the following instances: ? For thirteen (13) of forty (40) participants selected for testing, there was no evidence that a case worker reviewed and certified the participants IEVS report. ? For three (3) of forty (40) participants selected for testing, the income verification document used in the benefit calculation was not retained by the department. Cause: The condition is primarily caused by the SSA department not following policies and procedures in place to ensure the eligibility case files contain documentation to support eligibility and benefit calculations. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of forty (40) out of one hundred eleven thousand and fifty-one (111,051) participants were selected for special tests and provisions relating to ADP System for SNAP. The condition above was identified during our testwork of the SSA?s internal controls over special tests and provisions. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its established policies and procedures with regard to initial and ongoing eligibility determination, required documentation and verifications, maintenance of participant files, and ensure that policies and procedures are strictly adhered to by County personnel. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Supplemental Nutrition Assistance Program (SNAP) Cluster Federal Financial Assistance Listing Number: 10.561 Federal Grantor: U.S. Department of Agriculture Passed-Through: California Department of Social Services Award No. and Year: 217CACA4S2514, 227CACA4S2514, 217CACA4Q7503, 227CACA4Q7503, 217CACA4S2519, 227CACA4S2519, 217CACA4S2520, 227CACA4S2520, 217CACA5S9018, 217CACA6F1003, 227CACA7F1003 and 2022 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control Criteria: 7 CFR sections 272.10 and 277.18 require State agencies to automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP. This includes: (1) accurately and completely processing and storing all case file information for eligibility determination and benefit calculation; (2) providing an automatic cutoff of households at the end of their certification period unless recertified; and (3) generating data necessary to meet federal issuance and reconciliation reporting requirements. Condition: In establishing a new case, the client is certified to receive benefits for a one-year period (certification period). The intake and certification process require that information on the CF-37 and SAWS 2 be obtained to determine eligibility and assist in the benefit calculation. Further, prior to case worker approval of benefits, the Income Eligibility Verification System (IEVS) report is required to be processed in certain circumstances. During our testing of the SSA department?s provisions for special tests and provisions requirements relating to ADP System for SNAP, we noted the following instances: ? For thirteen (13) of forty (40) participants selected for testing, there was no evidence that a case worker reviewed and certified the participants IEVS report. ? For three (3) of forty (40) participants selected for testing, the income verification document used in the benefit calculation was not retained by the department. Cause: The condition is primarily caused by the SSA department not following policies and procedures in place to ensure the eligibility case files contain documentation to support eligibility and benefit calculations. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of forty (40) out of one hundred eleven thousand and fifty-one (111,051) participants were selected for special tests and provisions relating to ADP System for SNAP. The condition above was identified during our testwork of the SSA?s internal controls over special tests and provisions. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its established policies and procedures with regard to initial and ongoing eligibility determination, required documentation and verifications, maintenance of participant files, and ensure that policies and procedures are strictly adhered to by County personnel. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Supplemental Nutrition Assistance Program (SNAP) Cluster Federal Financial Assistance Listing Number: 10.561 Federal Grantor: U.S. Department of Agriculture Passed-Through: California Department of Social Services Award No. and Year: 217CACA4S2514, 227CACA4S2514, 217CACA4Q7503, 227CACA4Q7503, 217CACA4S2519, 227CACA4S2519, 217CACA4S2520, 227CACA4S2520, 217CACA5S9018, 217CACA6F1003, 227CACA7F1003 and 2022 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control Criteria: 7 CFR sections 272.10 and 277.18 require State agencies to automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing, and transmitting information concerning SNAP. This includes: (1) accurately and completely processing and storing all case file information for eligibility determination and benefit calculation; (2) providing an automatic cutoff of households at the end of their certification period unless recertified; and (3) generating data necessary to meet federal issuance and reconciliation reporting requirements. Condition: In establishing a new case, the client is certified to receive benefits for a one-year period (certification period). The intake and certification process require that information on the CF-37 and SAWS 2 be obtained to determine eligibility and assist in the benefit calculation. Further, prior to case worker approval of benefits, the Income Eligibility Verification System (IEVS) report is required to be processed in certain circumstances. During our testing of the SSA department?s provisions for special tests and provisions requirements relating to ADP System for SNAP, we noted the following instances: ? For thirteen (13) of forty (40) participants selected for testing, there was no evidence that a case worker reviewed and certified the participants IEVS report. ? For three (3) of forty (40) participants selected for testing, the income verification document used in the benefit calculation was not retained by the department. Cause: The condition is primarily caused by the SSA department not following policies and procedures in place to ensure the eligibility case files contain documentation to support eligibility and benefit calculations. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of forty (40) out of one hundred eleven thousand and fifty-one (111,051) participants were selected for special tests and provisions relating to ADP System for SNAP. The condition above was identified during our testwork of the SSA?s internal controls over special tests and provisions. Repeat Finding from Prior Years: No Recommendation: We recommend the County strengthen its established policies and procedures with regard to initial and ongoing eligibility determination, required documentation and verifications, maintenance of participant files, and ensure that policies and procedures are strictly adhered to by County personnel. Management Response and Corrective Action: Social Services Agency: 1. Person Responsible: Cristina Espinoza, Administrative Manager I, Assistance Programs, Operations and Policy Team 2. Corrective action plan: Department will provide Single Audit findings in a mandatory Program Summary meeting that all staff will attend. At the meeting, department will address the findings in detail and remind staff who administer CalFresh to: ? Review and process IEVS reports timely and accurately ? Ensure case verifications are imaged and documented in case comments to support case action ? Review the budget wrap-up screen thoroughly for every case The department will also continue to have the Quality Assurance team complete case reviews to ensure eligibility workers are following policies and procedures in completing accurate eligibility determinations. 3. Anticipated Implementation date: April 2023
During our testing of the SSA?s provisions for eligibility requirements, we noted for three (3) of sixty (60) samples the department did not retain the participant?s application, which is part of the County?s process and internal control. Cause: The SSA department did not ensure case workers were following the department?s policies and procedures relating to the eligibility determination process. Effect: The County?s control was not consistently followed, which requires case workers to retain the participant?s application. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Non-statistical sample of sixty (60) out of two hundred ninety-four thousand and one hundred sixteen (294,116) participants were selected for eligibility testing. The condition above was identified during our testwork of the SSA?s internal controls over eligibility. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA department adhere to their policies and ensure Case Workers retain participant applications. View of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Medicaid Cluster Federal Financial Assistance Listing Number: 93.778 Federal Grantor: U.S. Department of Health and Human Services Passed-Through: California Department of Public Health Award No. and Year: 2022 Compliance Requirements: Eligibility Type of Finding: Significant Deficiency in Internal Control Criteria: Title 42 Chapter IV Subchapter C Part 425 Subpart J Section 435.907, Application, states that the agency must accept an application from the applicant, an adult who is in the applicant's household, as defined in ? 435.603(f), or family, as defined in section 36B(d)(1) of the Code, an authorized representative, or if the applicant is a minor or incapacitated, someone acting responsibly for the applicant, and any documentation required to establish eligibility which includes via the internet Web site, by telephone, via mail, in person, and through other commonly available electronic means. Condition: During our testing of the SSA?s provisions for eligibility requirements, we noted for three (3) of sixty (60) samples the department did not retain the participant?s application, which is part of the County?s process and internal control. Cause: The SSA department did not ensure case workers were following the department?s policies and procedures relating to the eligibility determination process. Effect: The County?s control was not consistently followed, which requires case workers to retain the participant?s application. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Non-statistical sample of sixty (60) out of two hundred ninety-four thousand and one hundred sixteen (294,116) participants were selected for eligibility testing. The condition above was identified during our testwork of the SSA?s internal controls over eligibility. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA department adhere to their policies and ensure Case Workers retain participant applications. View of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Medicaid Cluster Federal Financial Assistance Listing Number: 93.778 Federal Grantor: U.S. Department of Health and Human Services Passed-Through: California Department of Public Health Award No. and Year: 2022 Compliance Requirements: Eligibility Type of Finding: Significant Deficiency in Internal Control Criteria: Title 42 Chapter IV Subchapter C Part 425 Subpart J Section 435.907, Application, states that the agency must accept an application from the applicant, an adult who is in the applicant's household, as defined in ? 435.603(f), or family, as defined in section 36B(d)(1) of the Code, an authorized representative, or if the applicant is a minor or incapacitated, someone acting responsibly for the applicant, and any documentation required to establish eligibility which includes via the internet Web site, by telephone, via mail, in person, and through other commonly available electronic means. Condition: During our testing of the SSA?s provisions for eligibility requirements, we noted for three (3) of sixty (60) samples the department did not retain the participant?s application, which is part of the County?s process and internal control. Cause: The SSA department did not ensure case workers were following the department?s policies and procedures relating to the eligibility determination process. Effect: The County?s control was not consistently followed, which requires case workers to retain the participant?s application. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Non-statistical sample of sixty (60) out of two hundred ninety-four thousand and one hundred sixteen (294,116) participants were selected for eligibility testing. The condition above was identified during our testwork of the SSA?s internal controls over eligibility. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA department adhere to their policies and ensure case workers retain participant applications. Management Response and Corrective Action: Social Services Agency: 1. Person Responsible: Cristina Espinoza, Administrative Manager I, Assistance Programs, Policy and Operations Team 2. Corrective action plan: Department will provide Single Audit findings in a mandatory Program Summary meeting that all staff will attend. At the meeting, department will address the findings in detail and remind staff who administer Medi-Cal to: ? Ensure case documentation such as: initial application and supporting verification are imaged ? Enter case comments that support case actions The department will also continue to have the Quality Assurance team complete case reviews to ensure eligibility workers are following policies and procedures in completing accurate eligibility determinations. 3. Anticipated Implementation date: April 2023
During our testing of the HCA?s provisions for reporting requirements, we noted the following instance where reports were prepared on the cash basis, but reports indicated that the costs were reported on the accrual basis of accounting: ? Two (2) out of the three (3) reports for the HCA. Corrective action of prior year finding was implemented mid-year. Cause: The HCA department reported amounts on cash basis, but the form identified the basis for the report as ?accrual?. The HCA department review process and certification of the report did not identify the discrepancy. Effect: The County?s control was not consistently followed, which applies the basis of accounting on a consistent basis. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of three (3) reports were selected for report testing. Repeat Finding from Prior Years: Yes, Finding 2021-005. Recommendation: We recommend the HCA adhere to their policies and apply the same basis of accounting on a consistent basis for the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Emergency Rental Assistance Program Federal Financial Assistance Listing Number: 21.023 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.01 of the Uniform Guidance states that the County may report charges on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Condition: During our testing of the HCA?s provisions for reporting requirements, we noted the following instance where reports were prepared on the cash basis, but reports indicated that the costs were reported on the accrual basis of accounting: ? Two (2) out of the three (3) reports for the HCA. Corrective action of prior year finding was implemented mid-year. Cause: The HCA department reported amounts on cash basis, but the form identified the basis for the report as ?accrual?. The HCA department review process and certification of the report did not identify the discrepancy. Effect: The County?s control was not consistently followed, which applies the basis of accounting on a consistent basis. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of three (3) reports were selected for report testing. Repeat Finding from Prior Years: Yes, Finding 2021-005. Recommendation: We recommend the HCA adhere to their policies and apply the same basis of accounting on a consistent basis for the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Emergency Rental Assistance Program Federal Financial Assistance Listing Number: 21.023 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.01 of the Uniform Guidance states that the County may report charges on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Condition: During our testing of the HCA?s provisions for reporting requirements, we noted the following instance where reports were prepared on the cash basis, but reports indicated that the costs were reported on the accrual basis of accounting: ? Two (2) out of the three (3) reports for the HCA. Corrective action of prior year finding was implemented mid-year. Cause: The HCA department reported amounts on cash basis, but the form identified the basis for the report as ?accrual?. The HCA department review process and certification of the report did not identify the discrepancy. Effect: The County?s control was not consistently followed, which applies the basis of accounting on a consistent basis. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of three (3) reports were selected for report testing. Repeat Finding from Prior Years: Yes, Finding 2021-005. Recommendation: We recommend the HCA adhere to their policies and apply the same basis of accounting on a consistent basis for the program. Management Response and Corrective Action: Health Care Agency: 1. Person Responsible: Cindy Wong, HCA Accounting Services Division Manager 2. Corrective action plan: Once identified during prior year?s Single Audit, HCA Accounting has ensured the appropriate basis of accounting is reported correctly and applied consistently for the ERAP program. 3. Anticipated Implementation date: Fully Implemented
2021-005
FAC accepted this audit on May 5, 2022 — management decision was due November 5, 2022.
During our testing of the Registrar of Voters (ROV) and Orange County Public Works (OCPW) provisions for procurement requirements, we noted the following instances where there was no evidence that the ROV or OCPW verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: ? Two (2) of the two (2) contracts through the ROV department selected for testing. ? Three (3) of the three (3) contracts through the OCPW selected for testing. Cause: ROV and OCPW departments did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) procurement contracts were selected for procurement and suspension and debarment testing from ROV and three (3) out of seven (7) procurement contracts were sampled from OCPW. The condition above was identified during our testwork of the ROV?s and OCPW?s internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that ROV and OCPW adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 2018 HAVA Election Security Grants Federal Financial Assistance Listing Number: 90.404 Federal Grantor: United States (U.S.) Election Assistance Commission Passed-through: California Secretary of State ? Department of General Services Award No. and Year: 20G26130 and 2021 Program: Flood Plain Management Services Federal Financial Assistance Listing Number: 12.104 Federal Grantor: U.S. Department of Defense Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The 2021 Compliance Supplement states: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of the Registrar of Voters (ROV) and Orange County Public Works (OCPW) provisions for procurement requirements, we noted the following instances where there was no evidence that the ROV or OCPW verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: ? Two (2) of the two (2) contracts through the ROV department selected for testing. ? Three (3) of the three (3) contracts through the OCPW selected for testing. Cause: ROV and OCPW departments did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) procurement contracts were selected for procurement and suspension and debarment testing from ROV and three (3) out of seven (7) procurement contracts were sampled from OCPW. The condition above was identified during our testwork of the ROV?s and OCPW?s internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that ROV and OCPW adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 2018 HAVA Election Security Grants Federal Financial Assistance Listing Number: 90.404 Federal Grantor: United States (U.S.) Election Assistance Commission Passed-through: California Secretary of State ? Department of General Services Award No. and Year: 20G26130 and 2021 Program: Flood Plain Management Services Federal Financial Assistance Listing Number: 12.104 Federal Grantor: U.S. Department of Defense Award No. and Year: 2021 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The 2021 Compliance Supplement states: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of the Registrar of Voters (ROV) and Orange County Public Works (OCPW) provisions for procurement requirements, we noted the following instances where there was no evidence that the ROV or OCPW verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: ? Two (2) of the two (2) contracts through the ROV department selected for testing. ? Three (3) of the three (3) contracts through the OCPW selected for testing. Cause: ROV and OCPW did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control and compliance were not consistently followed, which required verification of suspension or debarment prior to entering the contract. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of two (2) out of four (4) procurement contracts were selected for procurement and suspension and debarment testing from ROV and three (3) out of seven (7) procurement contracts were sampled from OCPW. The condition above was identified during our testwork of the ROV?s and OCPW?s internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that ROV and OCPW adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Management Response and Corrective Action: Registrar of Voters: 1. Person Responsible: Kimberly Hostler, Deputy Director Administration 2. Corrective Action Plan: ROV has a policy in place requiring suspension and debarment verifications prior to awarding a contract. ROV Procurement will continue to provide trainings and reminders to staff of the policy and the importance of compliance. 3. Anticipated Implementation date: April 25, 2022 OC Public Works: 1. Person Responsible: Joseph Sly, OCPW Procurement Services Manager 2. Corrective Action Plan: OCPW Procurement will update the department?s policy and procedure to include an additional section on the Buyer?s review of the Alternative Funding section in procurement requisitions. 3. Anticipated Implementation date: The policy and procedure will be updated by October 31, 2022. County Counsel is also providing Corrective Action Plan because the contracts associated with finding are procured by County Counsel. County Counsel: 1. Person Responsible: Nicole Walsh, Senior Assistant County Counsel, Office of County Counsel 2. Corrective Action Plan: County Counsel will require verification that certain contractors are not suspended or debarred or otherwise excluded from participating in projects that involve Federal funding prior to awarding a contract. County Counsel will continue to provide trainings and reminders to staff of the policy and the importance of compliance. 3. Anticipated Implementation date: June 2022
During our testing of COVID-19 Coronavirus Relief Fund of the County Executive Officer?s (CEO) Office, we evaluated the County?s procedures for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. During our testing of the CEO procedures, we noted the following: ? CEO Office ? For nine (9) of nine (9) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. During our testing from the COVID-19 Coronavirus State and Local Fiscal Recovery Funds of the Orange County Community Resources (OCCR) provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for one (1) of two (2) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. During our testing from the COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease of the Health Care Agency (HCA) provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for two (2) of the four (4) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Cause: The CEO, OCCR, and HCA departments did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? COVID-19 Coronavirus Relief Fund ? CEO Office ? Nine (9) of thirty-four (34) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? OCCR ? Two (2) of four (4) subrecipients. ? COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease ? HCA ? all four (4) subrecipients were selected for testing. Repeat Finding from Prior Years: Yes ? Finding 2020-002. Recommendation: We recommend that the CEO, OCCR and HCA departments follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Program: COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No. and Year: COVID-19ELC88 and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of COVID-19 Coronavirus Relief Fund of the County Executive Officer?s (CEO) Office, we evaluated the County?s procedures for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. During our testing of the CEO procedures, we noted the following: ? CEO Office ? For nine (9) of nine (9) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. During our testing from the COVID-19 Coronavirus State and Local Fiscal Recovery Funds of the Orange County Community Resources (OCCR) provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for one (1) of two (2) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. During our testing from the COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease of the Health Care Agency (HCA) provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for two (2) of the four (4) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Cause: The CEO, OCCR, and HCA departments did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? COVID-19 Coronavirus Relief Fund ? CEO Office ? Nine (9) of thirty-four (34) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? OCCR ? Two (2) of four (4) subrecipients. ? COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease ? HCA ? all four (4) subrecipients were selected for testing. Repeat Finding from Prior Years: Yes ? Finding 2020-002. Recommendation: We recommend that the CEO, OCCR and HCA departments follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Program: COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No. and Year: COVID-19ELC88 and 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of COVID-19 Coronavirus Relief Fund of the County Executive Officer?s (CEO) Office, we evaluated the County?s procedures for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. During our testing of the CEO procedures, we noted the following: ? CEO - For nine (9) of nine (9) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. During our testing from the COVID-19 Coronavirus State and Local Fiscal Recovery Funds of the Orange County Community Resources (OCCR) provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for one (1) of two (2) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. During our testing from the COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease of the Health Care Agency (HCA) provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted for two (2) of the four (4) subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Cause: The CEO, OCCR and HCA departments did not adhere to established policies and procedures relating to risk assessment when a sub-recipient contract is awarded. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample were selected for subrecipient monitoring testing as noted below: ? COVID-19 Coronavirus Relief Fund - CEO ? Nine (9) of thirty-four (34) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? OCCR ? Two (2) of four (4) subrecipients ? COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease ? HCA ? all four (4) subrecipients were selected for testing Repeat Finding from Prior Years: Yes ? Finding 2020-002 Recommendation: We recommend that the CEO, OCCR and HCA departments follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Management Response and Corrective Action: County Executive Office: 1. Person Responsible: Selina Chan-Wychgel 2. Corrective Action Plan: The CEO developed and implemented the County of Orange Subrecipient Survey in assessing and documenting the evaluation of subrecipient?s risk of non-compliance in June 2021. Since then, the Department has followed the implemented risk assessment policies and procedures in conducting the required evaluation with the distribution of federal funding awarded to the County to ensure compliance in accordance with 2 CFR section 200.332 (b). 3. Anticipated Implementation date: June 2021 Health Care Agency: 1. Person Responsible: Juan Corral, HCA Procurement & Contract Services Division Manager 2. Corrective Action Plan: HCA will complete Pre-Award Risk Assessments for all subrecipient contracts regardless of funding source. Staff will be notified of procedural change immediately and follow-up training will be provided. 3. Anticipated Implementation date: May 01, 2022 Orange County Community Resources: 1. Person Responsible: Elsa Rivera, Interim Contracts Manager 2. Corrective Action Plan: OCCR Contracts Development and Management (CDM) team was not aware of the change in funding source from General Fund to Coronavirus funds for the contracts in question. OCCR will update internal procedures to ensure CDM is notified when the contract funding source changes to federal funding requiring subrecipient monitoring. 3. Anticipated Implementation date: September 30, 2022
2020-002
The following information was not provided at the time of the subaward for one (1) of five (5) subawards selected for testing from the Block Grants for Prevention and Treatment of Substance Abuse within the HCA: ? Federal award identification number ? Federal award date The following information was not provided at the time of the subaward for one (1) of four (4) subawards selected for testing from the HCA department for COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease: ? Subrecipient?s unique identifier ? Federal award identification number ? Federal award date of award ? Subaward period of performance ? Total amount of federal funds obligated ? Total amount of the federal award ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for nine (9) of nine (9) subawards selected for testing from the CEO for the COVID-19 Coronavirus Relief Fund: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for two (2) of two (2) subawards selected for testing from the OCCR for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Federal award date of award ? Subaward period of performance ? Total amount of federal funds obligated ? Total amount of the federal award ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award Cause: The HCA, CEO and OCCR departments procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Effect: The HCA, CEO and OCCR departments did not identify the required elements of the subaward to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? Block Grants for Prevention and Treatment of Substance Abuse ? HCA ? Five (5) of nineteen (19) subrecipients. ? COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease ? HCA ? Four (4) of four (4) subrecipients ? entire population was selected. ? COVID-19 Coronavirus Relief Fund ? CEO ? Nine (9) of thirty-four (34) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? OCCR ? Two (2) of four (4) subrecipients. County of Orange, California Schedule of Findings and Questioned Costs Year Ended June 30, 2021 Repeat Finding from Prior Years: No. Recommendation: We recommend that the HCA, CEO, and OCCR departments modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Block Grants for Prevention and Treatment of Substance Abuse Federal Financial Assistance Listing Number: 93.959 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Health Care Services Award No. and Year: 18-95262 and 2021 Program: COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No. and Year: COVID-19ELC88 and 2021 Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of the subaward for one (1) of five (5) subawards selected for testing from the Block Grants for Prevention and Treatment of Substance Abuse within the HCA: ? Federal award identification number ? Federal award date The following information was not provided at the time of the subaward for one (1) of four (4) subawards selected for testing from the HCA department for COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease: ? Subrecipient?s unique identifier ? Federal award identification number ? Federal award date of award ? Subaward period of performance ? Total amount of federal funds obligated ? Total amount of the federal award ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for nine (9) of nine (9) subawards selected for testing from the CEO for the COVID-19 Coronavirus Relief Fund: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for two (2) of two (2) subawards selected for testing from the OCCR for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Federal award date of award ? Subaward period of performance ? Total amount of federal funds obligated ? Total amount of the federal award ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award Cause: The HCA, CEO and OCCR departments procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Effect: The HCA, CEO and OCCR departments did not identify the required elements of the subaward to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? Block Grants for Prevention and Treatment of Substance Abuse ? HCA ? Five (5) of nineteen (19) subrecipients. ? COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease ? HCA ? Four (4) of four (4) subrecipients ? entire population was selected. ? COVID-19 Coronavirus Relief Fund ? CEO ? Nine (9) of thirty-four (34) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? OCCR ? Two (2) of four (4) subrecipients. County of Orange, California Schedule of Findings and Questioned Costs Year Ended June 30, 2021 Repeat Finding from Prior Years: No. Recommendation: We recommend that the HCA, CEO, and OCCR departments modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Block Grants for Prevention and Treatment of Substance Abuse Federal Financial Assistance Listing Number: 93.959 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Health Care Services Award No. and Year: 18-95262 and 2021 Program: COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease Federal Financial Assistance Listing Number: 93.323 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No. and Year: COVID-19ELC88 and 2021 Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of the subaward for one (1) of five (5) subawards selected for testing from the Block Grants for Prevention and Treatment of Substance Abuse within the HCA: ? Federal award identification number ? Federal award date The following information was not provided at the time of the subaward for one (1) for four (4) subawards selected for testing from the HCA department for COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease: ? Subrecipient?s unique identifier ? Federal award identification number ? Federal award date of award ? Subaward period of performance ? Total amount of federal funds obligated ? Total amount of the federal award ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for nine (9) of nine (9) subawards selected for testing from the CEO for the COVID-19 Coronavirus Relief Fund: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award The following information was not provided at the time of the subaward for two (2) of two (2) subawards selected for testing from the OCCR for the COVID-19 Coronavirus State and Local Fiscal Recovery Funds: ? Subrecipient?s unique entity identifier ? Federal award identification number ? Federal award date of award ? Subaward period of performance ? Total amount of federal funds obligated ? Total amount of the federal award ? Federal award project description ? Name of federal awarding agency ? CFDA number ? Identification of whether the award is research and development ? Indirect cost rate for the federal award Cause: The HCA, CEO, and OCCR departments procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Effect: The HCA, CEO, and OCCR departments did not identify the required elements of the subaward to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? Block Grants for Prevention and Treatment of Substance Abuse ? HCA ? Five (5) of nineteen (19) subrecipients. ? COVID-19 Epidemiology and Laboratory Capacity for Infectious Disease ? HCA ? Four (4) of four (4) subrecipients ? entire population was selected. ? COVID-19 Coronavirus Relief Fund ? CEO ? Nine (9) of thirty-four (34) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? OCCR ? Two (2) of four (4) subrecipients. Repeat Finding from Prior Years: No. Recommendation: We recommend that the HCA, CEO, and OCCR departments modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Management Response and Corrective Action: County Executive Office: 1. Person Responsible: Selina Chan-Wychgel 2. Corrective Action Plan: The CEO has implemented strict use of the County-wide Subrecipient Monitoring policy and procedure since June 2021 to ensure all required award information and applicable requirements are communicated appropriately in a written agreement format to subrecipients at the time of subaward in accordance with 2 CFR section 200.332 (b). 3. Anticipated Implementation date: June 2021 Health Care Agency: 1. Person Responsible: Juan Corral, HCA Procurement & Contract Services Division Manager 2. Corrective Action Plan: HCA will ensure that subaward elements are included in contracts when available/applicable. When the subaward element is missing, HCA will continue to use Subrecipient Award Notification to inform the contract providers. Staff will be notified immediately and follow-up training will be provided. 3. Anticipated Implementation date: May 01, 2022 Orange County Community Resources: 1. Person Responsible: Elsa Rivera, Interim Contracts Manager 2. Corrective Action Plan: OCCR Contracts Development and Management (CDM) team was not aware of the change in funding source from General Fund to Coronavirus funds for the contracts in question. OCCR will update internal procedures to ensure CDM is notified when the contract funding source changes to federal funding requiring subrecipient monitoring. 3. Anticipated Implementation date: September 30, 2022.
During our testing of the Aging Cluster, COVID-19 Coronavirus Relief Fund, and the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, the OCCR department was responsible for overseeing the County?s monitoring of the subrecipient to ensure that the subawards were used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. We noted that the OCCR department was not performing the monitoring requirement for each of its programs noted below: ? Aging Cluster ? Four (4) of four (4) subrecipients. ? COVID-19 Coronavirus Relief Fund ? Three (3) of three (3) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? Two (2) of two (2) subrecipients. Cause: The OCCR did not adhere to established policies and procedures relating to subrecipient monitoring. Effect: There is an increased risk that the subrecipients are not using the subawards for the authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward or achieving performance goals. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? Aging Cluster ? OCCR ? Four (4) of fifteen (15) subrecipients. ? COVID-19 Coronavirus Relief Fund ? OCCR ? Three (3) of ten (10) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds - OCCR ? Two (2) of four (4) subrecipients. Repeat Findings from Prior Years: No. Recommendation: We recommend that the OCCR adhere to the implemented policies and procedures to ensure that the required subrecipient monitoring be performed in accordance with 2 CFR section 200.332(d). View of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Aging Cluster Federal Financial Assistance Listing Number: 93.041, 93.042, 93.043, 93.044, 93.045, 93.052, 93.053 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Aging Award No. and Year: AP-2021-22, CARES-22, FFCRA-22 and 2021 Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2020 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Section 200.332(d), Requirements for Pass-Through Entities, states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subawards were 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. Condition: During our testing of the Aging Cluster, COVID-19 Coronavirus Relief Fund, and the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, the OCCR department was responsible for overseeing the County?s monitoring of the subrecipient to ensure that the subawards were used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. We noted that the OCCR department was not performing the monitoring requirement for each of its programs noted below: ? Aging Cluster ? Four (4) of four (4) subrecipients. ? COVID-19 Coronavirus Relief Fund ? Three (3) of three (3) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? Two (2) of two (2) subrecipients. Cause: The OCCR did not adhere to established policies and procedures relating to subrecipient monitoring. Effect: There is an increased risk that the subrecipients are not using the subawards for the authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward or achieving performance goals. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? Aging Cluster ? OCCR ? Four (4) of fifteen (15) subrecipients. ? COVID-19 Coronavirus Relief Fund ? OCCR ? Three (3) of ten (10) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds - OCCR ? Two (2) of four (4) subrecipients. Repeat Findings from Prior Years: No. Recommendation: We recommend that the OCCR adhere to the implemented policies and procedures to ensure that the required subrecipient monitoring be performed in accordance with 2 CFR section 200.332(d). View of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Aging Cluster Federal Financial Assistance Listing Number: 93.041, 93.042, 93.043, 93.044, 93.045, 93.052, 93.053 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Aging Award No. and Year: AP-2021-22, CARES-22, FFCRA-22 and 2021 Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2020 Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.332(d), Requirements for Pass-Through Entities, states that all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subawards were 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. Condition: During our testing of the Aging Cluster, COVID-19 Coronavirus Relief Fund, and the COVID-19 Coronavirus State and Local Fiscal Recovery Funds, the OCCR department was responsible for overseeing the County?s monitoring of the subrecipient to ensure that the subawards were used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. We noted that the OCCR department was not performing the monitoring requirement for each of its programs noted below: ? Aging Cluster ? Four (4) of four (4) subrecipients. ? COVID-19 Coronavirus Relief Fund ? Three (3) of three (3) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds ? Two (2) of two (2) subrecipients. Cause: The OCCR did not adhere to established policies and procedures relating to subrecipient monitoring. Effect: There is an increased risk that the subrecipients are not using the subawards for the authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward or achieving performance goals. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Nonstatistical samples were selected for subrecipient monitoring testing as noted below: ? Aging Cluster ? OCCR ? Four (4) of fifteen (15) subrecipients. ? COVID-19 Coronavirus Relief Fund ? OCCR ? Three (3) of ten (10) subrecipients. ? COVID-19 Coronavirus State and Local Fiscal Recovery Funds - OCCR ? Two (2) of four (4) subrecipients. Repeat Findings from Prior Years: No. Recommendation: We recommend that the OCCR adhere to the implemented policies and procedures to ensure that the required subrecipient monitoring be performed in accordance with 2 CFR section 200.332(d). Management Response and Corrective Action Plan: Orange County Community Resources: 1. Persons Responsible: Ericka Danczak, Director-Aging & Veterans Services; Elsa Rivera, Interim Contracts Manager 2. Corrective Action Plan: The Aging Cluster (Area Agency on Aging (AAA)) received guidance on November 30, 2021 from the California Department of Aging (CDA) providing approval to resume program monitoring reviews. No formal program monitoring assessment was performed for FY 2020-21 prior to release of the CDA guidance due to the temporary suspension of formal program monitoring reviews, as instructed by CDA. The AAA has begun preparation for resuming program monitoring reviews on all subrecipients/contractors which has included developing engagement letters and enhancing the existing subrecipient monitoring tools to include detailed evaluation of program and services to ensure that subawards are used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subawards. OCCR/OCCS will conduct fiscal monitoring via third party auditors on all Aging Cluster, Coronavirus Relief Fund and Coronavirus State and Local Fiscal Recovery Funds subrecipients. Additionally, program monitoring reviews will be conducted via the OCCR/OCCS Contract Monitoring & Program Compliance unit on all Aging Cluster subrecipients and on sample testing of the Coronavirus State and Local Fiscal Recovery Fund subrecipients. Finally, OCCR will add Subrecipient Monitoring to the Contract Compliance Checklist and coordinate with OCCS Compliance Manager to schedule and/or collect monitoring reports for the contract compliance folder. 3. Anticipated Implementation date: September 30, 2022.
During our testing of the HCA?s provisions for reporting requirements, we noted the following instance where reports were prepared on the cash basis, but reports indicated that the costs were reported on the accrual basis of accounting: ? Two (2) out of the two (2) reports for the HCA. Cause: The HCA department reported amounts on cash basis, but the form identified the basis for the report as ?accrual?. The HCA department review process and certification of the report did not identify the discrepancy. Effect: The County?s control was not consistently followed, which applies the basis of accounting on a consistent basis. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) reports were selected for report testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and apply the same basis of accounting on a consistent basis for the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: COVID-19 Emergency Rental Assistance Program Federal Financial Assistance Listing Number: 21.023 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, 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. 2 CFR Section 200.01 of the Uniform Guidance states that the County may report charges on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Condition: During our testing of the HCA?s provisions for reporting requirements, we noted the following instance where reports were prepared on the cash basis, but reports indicated that the costs were reported on the accrual basis of accounting: ? Two (2) out of the two (2) reports for the HCA. Cause: The HCA department reported amounts on cash basis, but the form identified the basis for the report as ?accrual?. The HCA department review process and certification of the report did not identify the discrepancy. Effect: The County?s control was not consistently followed, which applies the basis of accounting on a consistent basis. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) reports were selected for report testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and apply the same basis of accounting on a consistent basis for the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Emergency Rental Assistance Program Federal Financial Assistance Listing Number: 21.023 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR section 200.303(a), Internal Controls, 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. 2 CFR section 200.01 of the Uniform Guidance states that the County may report charges on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Condition: During our testing of the HCA?s provisions for reporting requirements, we noted the following instance where reports were prepared on the cash basis, but reports indicated that the costs were reported on the accrual basis of accounting: ? Two (2) out of the two (2) reports for the HCA Cause: The HCA department reported amounts on cash basis, but the form identified the basis for the report as ?accrual?. The HCA department review process and certification of the report did not identify the discrepancy. Effect: The County?s control was not consistently followed, which applies the basis of accounting on a consistent basis. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) reports were selected for report testing. The condition above was identified during our testwork of HCA internal controls over reporting. Repeat Finding from Prior Years: No. Recommendation: We recommend the HCA adhere to their policies and apply the same basis of accounting on a consistent basis for the program. Management Response and Corrective Action: 1. Person Responsible: Cindy Wong, HCA Accounting Services Division Manager 2. Corrective Action Plan: HCA Accounting will ensure the appropriate basis of accounting is reported correctly and applied consistently for the ERAP program. 3. Anticipated Implementation date: Fully Implemented
FAC accepted this audit on March 30, 2021 — management decision was due September 30, 2021.
During our testing of the Health Care Agency (HCA) department?s provisions for procurement requirements, we noted the following instances where there was no evidence that the department verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: ? Five (5) of the seven (7) contracts through the HCA department selected for testing. Cause: The HCA department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control was not consistently followed, which required verification of suspension or debarment prior to entering the contract. However, the verification of suspension and debarment was subsequently performed and documented by the County?s HCA department. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 7 out of 26 procurement contracts were selected for procurement and suspension and debarment testing. The condition above was identified during our testwork of the Health Care Agency?s internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that Health Care Agency adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness (PHEP) Aligned Cooperative CFDA No.: 93.074 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No. and Year: 17-10179 (2020) Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The 2020 Compliance Supplement states: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of the Health Care Agency (HCA) department?s provisions for procurement requirements, we noted the following instances where there was no evidence that the department verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: ? Five (5) of the seven (7) contracts through the HCA department selected for testing. Cause: The HCA department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control was not consistently followed, which required verification of suspension or debarment prior to entering the contract. However, the verification of suspension and debarment was subsequently performed and documented by the County?s HCA department. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 7 out of 26 procurement contracts were selected for procurement and suspension and debarment testing. The condition above was identified during our testwork of the Health Care Agency?s internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that Health Care Agency adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness (PHEP) Aligned Cooperative CFDA No.: 93.074 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Public Health Award No. and Year: 17-10179 (2020) Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR section 200.303(a), Internal Controls, 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. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The 2020 Compliance Supplement states: Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our testing of the Health Care Agency (HCA) department?s provisions for procurement requirements, we noted the following instances where there was no evidence that the department verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract, in accordance with County policy: ? Five (5) of the seven (7) contracts through the HCA department selected for testing. Cause: The HCA department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County?s control was not consistently followed, which required verification of suspension or debarment prior to entering the contract. However, the verification of suspension and debarment was subsequently performed and documented by the County?s HCA department. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 7 out of 26 procurement contracts were selected for procurement and suspension and debarment testing. The condition above was identified during our testwork of the Health Care Agency?s internal controls over procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that Health Care Agency adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Management Response and Corrective Action: 1. Person Responsible: Juan Corral, HCA Procurement & Contract Services Division Manager 2. Corrective Action Plan: The Health Care Agency (HCA) has a policy in place requiring suspension and debarment verifications prior to awarding a contract. HCA Procurement & Contracts Services will continue to provide trainings and reminders to staff of the policy and the importance of compliance. 3. Anticipated Implementation date: March 2021
During our testing of the County Executive Officer?s (CEO) Office provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted the County for nine of nine subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Cause: The CEO Office did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 9 out of 34 subrecipients were selected for subrecipient monitoring testing. The condition above was identified during our testwork of the County Executive Office?s subrecipient monitoring procedures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the CEO Office follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Coronavirus Relief Fund CFDA No.: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of the County Executive Officer?s (CEO) Office provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted the County for nine of nine subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Cause: The CEO Office did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 9 out of 34 subrecipients were selected for subrecipient monitoring testing. The condition above was identified during our testwork of the County Executive Office?s subrecipient monitoring procedures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the CEO Office follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Coronavirus Relief Fund CFDA No.: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of the County Executive Officer?s (CEO) Office provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted the County for nine of nine subrecipients selected, the required evaluation of the subrecipient?s risk of noncompliance was not documented. Cause: The CEO Office did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 9 out of 34 subrecipients were selected for subrecipient monitoring testing. The condition above was identified during our testwork of the County Executive Office?s subrecipient monitoring procedures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the CEO Office follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.332(b). Management Response and Corrective Action: 1. Person Responsible: Selina Chan-Wychgel, Fiscal Services Manager 2. Corrective Action Plan: Although no formal risk assessment was performed and documented, the County did determine the risk for the cities to be low and it was appropriate to proceed forward with the CARES Act funding distribution, due to the urgency in providing relief monies to the subrecipients in an expeditious manner. The County Executive Office will enhance the existing subrecipient reporting tools to include an evaluation of the third party?s risk of non-compliance. The Department will implement the use of these documents in all future Subrecipient Monitoring to ensure adherence with the County written monitoring policies and procedures that are in place and maintain compliance with 2 CFR section 200.332(b). 3. Anticipated Implementation date: June 30, 2021
During our testing of the Sheriff?s Department?s compliance with the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements, we noted that program overtime expenditures within one sample selected were also reported for reimbursement through the Tobacco Settlement Fund. In applying the criteria above, as the overtime was already claimed through the Tobacco Settlement Fund, it would not be eligible to be covered under the Coronavirus Relief Fund. Cause: CRF guidance provided by the US. Department of the Treasury was updated subsequent to the fiscal year-end and allowed employees who are considered to be substantially dedicated to the response to COVID-19 to be fully reimbursable. As a result, the Sheriff?s Department claimed overtime from mid-March through the end of the year, and without consideration of the same overtime amounts previously claimed under the Tobacco Settlement Fund from the time period of mid-March through the end of April. Effect: Failure to follow the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements results in non-compliance with Federal regulations, and the control environment over the claiming process is weakened. Questioned Costs: Overtime expenditures claimed under both the Sheriff?s Department portion of CRF expenditures and the Tobacco Settlement Fund amounted to $5,329. The County adjusted the SEFA to remove these costs. Context/Sampling: Using a scoping approach, a single reimbursement claim was selected from the Sheriff?s Department for Activities Allowed or Unallowed, & Allowable Costs/Cost Principles testing, which accounted for $58,295,561 of the $67,086,719 of the Sheriff Department?s federal program expenditures. The condition above was identified during our testwork of the Sheriff Department?s Activities Allowed or Unallowed, & Allowable Costs/Cost Principles provisions. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff?s Department modify and strengthen its current policies and procedures to ensure that program expenditures are not claimed for reimbursement under multiple programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Coronavirus Relief Fund CFDA No.: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Part 200.403, Factors affecting allowability of costs, states that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal Awards: not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. Further, per the Treasury FAQ related to the Coronavirus Relief Fund, the intent of the fund was not to provide general fiscal assistance, but rather to assist with COVID-19 related necessary expenditures. With respect to personnel expenses, though the Fund was not intended to be used to cover government payroll expenses generally, the Fund was intended to provide assistance to address increased expenses, such as the expense of hiring new personnel as needed to assist with the government?s response to the public health emergency and to allow recipients facing budget pressures not to have to lay off or furlough employees who would be needed to assist with that purpose. Condition: During our testing of the Sheriff?s Department?s compliance with the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements, we noted that program overtime expenditures within one sample selected were also reported for reimbursement through the Tobacco Settlement Fund. In applying the criteria above, as the overtime was already claimed through the Tobacco Settlement Fund, it would not be eligible to be covered under the Coronavirus Relief Fund. Cause: CRF guidance provided by the US. Department of the Treasury was updated subsequent to the fiscal year-end and allowed employees who are considered to be substantially dedicated to the response to COVID-19 to be fully reimbursable. As a result, the Sheriff?s Department claimed overtime from mid-March through the end of the year, and without consideration of the same overtime amounts previously claimed under the Tobacco Settlement Fund from the time period of mid-March through the end of April. Effect: Failure to follow the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements results in non-compliance with Federal regulations, and the control environment over the claiming process is weakened. Questioned Costs: Overtime expenditures claimed under both the Sheriff?s Department portion of CRF expenditures and the Tobacco Settlement Fund amounted to $5,329. The County adjusted the SEFA to remove these costs. Context/Sampling: Using a scoping approach, a single reimbursement claim was selected from the Sheriff?s Department for Activities Allowed or Unallowed, & Allowable Costs/Cost Principles testing, which accounted for $58,295,561 of the $67,086,719 of the Sheriff Department?s federal program expenditures. The condition above was identified during our testwork of the Sheriff Department?s Activities Allowed or Unallowed, & Allowable Costs/Cost Principles provisions. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff?s Department modify and strengthen its current policies and procedures to ensure that program expenditures are not claimed for reimbursement under multiple programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Coronavirus Relief Fund CFDA No.: 21.019 Federal Grantor: U.S. Department of the Treasury Award No. and Year: 2020 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Part 200.403, Factors affecting allowability of costs, states that except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal Awards: not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. Further, per the Treasury FAQ related to the Coronavirus Relief Fund, the intent of the fund was not to provide general fiscal assistance, but rather to assist with COVID-19 related necessary expenditures. With respect to personnel expenses, though the Fund was not intended to be used to cover government payroll expenses generally, the Fund was intended to provide assistance to address increased expenses, such as the expense of hiring new personnel as needed to assist with the government?s response to the public health emergency and to allow recipients facing budget pressures not to have to lay off or furlough employees who would be needed to assist with that purpose. Condition: During our testing of the Sheriff?s Department?s compliance with the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements, we noted that program overtime expenditures within one sample selected were also reported for reimbursement through the Tobacco Settlement Fund. In applying the criteria above, as the overtime was already claimed through the Tobacco Settlement Fund, it would not be eligible to be covered under the Coronavirus Relief Fund. Cause: CRF guidance provided by the US. Department of the Treasury was updated subsequent to the fiscal year-end and allowed employees who are considered to be substantially dedicated to the response to COVID-19 to be fully reimbursable. As a result, the Sheriff?s Department claimed overtime from mid-March through the end of the year, and without consideration of the same overtime amounts previously claimed under the Tobacco Settlement Fund from the time period of mid-March through the end of April. Effect: Failure to follow the Activities Allowed or Unallowed, & Allowable Costs/Cost Principles compliance requirements results in non-compliance with Federal regulations, and the control environment over the claiming process is weakened. Questioned Costs: Overtime expenditures claimed under both the Sheriff?s Department portion of CRF expenditures and the Tobacco Settlement Fund amounted to $5,329. The County adjusted the SEFA to remove these costs. Context/Sampling: Using a scoping approach, a single reimbursement claim was selected from the Sheriff?s Department for Activities Allowed or Unallowed, & Allowable Costs/Cost Principles testing, which accounted for $58,295,561 of the $67,086,719 of the Sheriff Department?s federal program expenditures. The condition above was identified during our testwork of the Sheriff Department?s Activities Allowed or Unallowed, & Allowable Costs/Cost Principles provisions. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff?s Department modify and strengthen its current policies and procedures to ensure that program expenditures are not claimed for reimbursement under multiple programs. Management Response and Corrective Action: 1. Person Responsible: Monique Vansuch, Audit Manager 2. Corrective Action Plan: The Orange County Sheriff-Coroner?s Department Financial/Administrative Services Division will modify and strengthen its current policies and procedures to ensure that program expenditures are not claimed for reimbursement under multiple programs. 3. Anticipated Implementation date: September 30, 2021.
FAC accepted this audit on March 30, 2020 — management decision was due September 30, 2020.
In establishing a new case, the client is certified to receive benefits for a one-year period (certification period). No benefits are to be issued after the certification period end date. The client must go through a recertification process in order to continue receiving benefits. The intake and certification process require that information on the CF-37 and SAWS 2 be obtained to determine eligibility. During the mid-year review, the client must submit the SAR 7 form in order to continue benefits. Further prior to case worker approval of benefits, the Income Eligibility Verification System (IEVS) is required to be processed in certain circumstances. As a result of our participant case files testing, we noted the following: ? For five of 40 case files, the benefits were continued without proper supporting documents as described below: o One case - SAR 7 was not on file, and system was not properly updated in order to discontinue or update benefits. o One case - no evidence retained to support benefit continuation such as CF-37, SAWS 2, or SAR 7, and system was not properly updated in order to discontinue or update benefits. The case file did not have the proper documentation in CalWIN to evidence that eligibility determinations and redeterminations were performed accurately and completely processed. Further, the IEVS report was not processed or reviewed in the case file. o One case - income verification was not properly performed, and system was not updated to ?flag? case in order to cease benefits. o One case ? no evidence retained to support benefit continuation such as CF-37, SAWS 2, or SAR 7. o One case ? family size was not updated based on results of SAR 7, resulting in overstatement of benefits. ? For four of 40 case files, the IEVS report was not processed or reviewed in the case file, when required. Questioned Costs: Benefits issued by the California Department of Social Services as a result of the County?s eligibility determinations were $22,179. Context/Sampling: A non statistical sample of 40 participants out of 60,397 participants were selected for eligibility testing. As a result of testwork of specific requirements related to special test and provisions, it was noted that five of 40 SNAP program?s case files tested were not properly maintained in accordance with OMB 2 CFR part 200 compliance requirements during fiscal year 2018-2019, which is an error rate of 12.5 percent. Further four of 40 case files did not follow County procedures related to IEVS prior to the eligibility determination, which is an error rate of 10 percent. Repeat Finding from Prior Year: No. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Cause: The condition is primarily caused by the County?s Social Service Agency not following policies and procedures in place to ensure the eligibility case files contain documentation to support eligibility and recertifications. Recommendation: We recommend that the County strengthen its established policies and procedures with regard to initial and ongoing eligibility determination, required documentation and verifications, maintenance of participant files, and ensure that policies and procedures are strictly adhered to by County personnel. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Supplemental Nutrition Assistance Program (SNAP) Cluster CFDA No.: 10.561 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Social Services Award No. and Year: FY 2018-19 Compliance Requirements: Special Tests and Provision ? ADP System for SNAP Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: The Uniform Guidance Compliance Supplement requires that the County (1) accurately and completely process and store all case file information for eligibility determination and benefit calculation; (2) provide an automatic cut-off of households at the end of their certification period unless recertified; and (3) generate data necessary to meet federal issuance and reconciliation reporting requirements. Condition: In establishing a new case, the client is certified to receive benefits for a one-year period (certification period). No benefits are to be issued after the certification period end date. The client must go through a recertification process in order to continue receiving benefits. The intake and certification process require that information on the CF-37 and SAWS 2 be obtained to determine eligibility. During the mid-year review, the client must submit the SAR 7 form in order to continue benefits. Further prior to case worker approval of benefits, the Income Eligibility Verification System (IEVS) is required to be processed in certain circumstances. As a result of our participant case files testing, we noted the following: ? For five of 40 case files, the benefits were continued without proper supporting documents as described below: o One case - SAR 7 was not on file, and system was not properly updated in order to discontinue or update benefits. o One case - no evidence retained to support benefit continuation such as CF-37, SAWS 2, or SAR 7, and system was not properly updated in order to discontinue or update benefits. The case file did not have the proper documentation in CalWIN to evidence that eligibility determinations and redeterminations were performed accurately and completely processed. Further, the IEVS report was not processed or reviewed in the case file. o One case - income verification was not properly performed, and system was not updated to ?flag? case in order to cease benefits. o One case ? no evidence retained to support benefit continuation such as CF-37, SAWS 2, or SAR 7. o One case ? family size was not updated based on results of SAR 7, resulting in overstatement of benefits. ? For four of 40 case files, the IEVS report was not processed or reviewed in the case file, when required. Questioned Costs: Benefits issued by the California Department of Social Services as a result of the County?s eligibility determinations were $22,179. Context/Sampling: A non statistical sample of 40 participants out of 60,397 participants were selected for eligibility testing. As a result of testwork of specific requirements related to special test and provisions, it was noted that five of 40 SNAP program?s case files tested were not properly maintained in accordance with OMB 2 CFR part 200 compliance requirements during fiscal year 2018-2019, which is an error rate of 12.5 percent. Further four of 40 case files did not follow County procedures related to IEVS prior to the eligibility determination, which is an error rate of 10 percent. Repeat Finding from Prior Year: No. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Cause: The condition is primarily caused by the County?s Social Service Agency not following policies and procedures in place to ensure the eligibility case files contain documentation to support eligibility and recertifications. Recommendation: We recommend that the County strengthen its established policies and procedures with regard to initial and ongoing eligibility determination, required documentation and verifications, maintenance of participant files, and ensure that policies and procedures are strictly adhered to by County personnel. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Program: Supplemental Nutrition Assistance Program (SNAP) Cluster CFDA No.: 10.561 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Social Services Award No. and Year: FY 2018-19 Compliance Requirements: Special Tests and Provision ? ADP System for SNAP Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Management Response and Corrective Action 1. Person Responsible: Cristina De La Rosa, Administrative Manager, Assistance Programs Operations and Policy 2. Corrective Action Plan: Department will provide Single Audit findings in a mandatory Program Summary meeting that all staff will attend. At the meeting, department will address the findings in detail and remind staff who administer CalFresh to: ? Ensure they are accurately collecting and recording income information ? Review the budget wrap-up screen thoroughly for every case ? Ensure case documentation such as: SAR 7, CF 37, SAWS 1 or SAWS 2 are imaged ? Ensure case verifications are imaged and documented in case comments to support case action ? Process IEVS reports timely and accurately The department will also continue to have the Quality Assurance unit complete case reviews to ensure eligibility workers are following policies and procedures and completing accurate eligibility determinations. In addition, to ensure timely processing of SAR 7s, the department will continue to utilize the SAR 7 Processing Report which identifies SAR 7s that have been received, have an assigned task in our Task Management System (TMS) and identifies whether the SAR 7 was marked processed in TMS but not processed in CalWIN. In an effort to ensure SAR 7 are processed timely, accurately, and consistently, in early March 2020 the department completed SAR 7 Refresher Training for eligibility staff. 3. Anticipated Implementation Date: April 2020
During our testing of the Orange County Community Resources (OCCR) Department provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted two of the two subawards selected for testing had instances of where evaluation of the subrecipient?s risk of noncompliance was not documented. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 2 subrecipients out of 6 total subrecipients were selected for testing. The condition noted above was identified during our procedures over OCCR?s subrecipient monitoring provisions. Repeat Finding from Prior Year: No. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Cause: OCCR did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Recommendation: We recommend that OCCR follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.331(b). Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Workforce Innovation and Opportunity Act (WIOA Cluster) CFDA No.: 17.258/17.259/17.278 Federal Grantor: U.S. Department of Labor Passed-through: California Employment Development Department Award No. and Year: various Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.331(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of the Orange County Community Resources (OCCR) Department provisions for evaluating subrecipient?s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward, we noted two of the two subawards selected for testing had instances of where evaluation of the subrecipient?s risk of noncompliance was not documented. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 2 subrecipients out of 6 total subrecipients were selected for testing. The condition noted above was identified during our procedures over OCCR?s subrecipient monitoring provisions. Repeat Finding from Prior Year: No. Effect: There is an increased risk that the monitoring procedures performed may not address the subrecipient?s risk of noncompliance. Cause: OCCR did not adhere to established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Recommendation: We recommend that OCCR follow the implemented policies and procedures to ensure that the required evaluation of the subrecipient?s risk of noncompliance be documented in accordance with 2 CFR section 200.331(b). Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Program: Workforce Innovation and Opportunity Act (WIOA Cluster) CFDA No.: 17.258/17.259/17.278 Federal Grantor: U.S. Department of Labor Passed-through: California Employment Development Department Award No. and Year: Various Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instances of Non-Compliance Management Response and Corrective Action 1. Person Responsible: Elsa Rivera, Contract Administrator, Contract Development and Management (CDM) 2. Corrective Action Plan: OCCR added Risk Assessments to the Contract Compliance Checklist. CDM will collaborate with Program Management to ensure all required tasks are completed and documented timely. 3. Anticipated Implementation Date: March 2020
The following information was not provided at the time of subaward for two of the two subawards selected for testing from the Block Grants for Community Mental Health Services: ? Federal award identification number ? Federal award date ? CFDA number and name ? Identification of whether the award is research and development ? Indirect cost rate for the Federal award The following information was not provided at the time of subaward for three of the three subawards selected for testing from the HIV Emergency Relief Project Grants: ? Federal award identification number ? Indirect cost rate for the Federal award Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 2 subrecipients out of 7 total subrecipients were selected for testing for the Block Grants for Community Mental Health Services. A nonstatistical sample of 3 subrecipients out of 7 total subrecipients were selected for testing for the HIV Emergency Relief Project Grants. The condition noted above was identified during our procedures over the Health Care Agency?s subrecipient monitoring provisions. Repeat Finding from Prior Year: No. Effect: The Health Care Agency did not identify the required elements of the subaward to the subrecipients at the time of subaward, increasing the risk of noncompliance. Cause: The Health Care Agency?s procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Recommendation: We recommend that the Health Care Agency modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Show full finding ▾Hide full finding ▴Program: Block Grants for Community Mental Health Services CFDA No.: 93.958 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Health Care Services Award No. and Year: 68-0317191 (2019) Program: HIV Emergency Relief Project Grants (Ryan White Part A) CFDA No.: 93.914 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No. and Year: N/A Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. Condition: The following information was not provided at the time of subaward for two of the two subawards selected for testing from the Block Grants for Community Mental Health Services: ? Federal award identification number ? Federal award date ? CFDA number and name ? Identification of whether the award is research and development ? Indirect cost rate for the Federal award The following information was not provided at the time of subaward for three of the three subawards selected for testing from the HIV Emergency Relief Project Grants: ? Federal award identification number ? Indirect cost rate for the Federal award Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of 2 subrecipients out of 7 total subrecipients were selected for testing for the Block Grants for Community Mental Health Services. A nonstatistical sample of 3 subrecipients out of 7 total subrecipients were selected for testing for the HIV Emergency Relief Project Grants. The condition noted above was identified during our procedures over the Health Care Agency?s subrecipient monitoring provisions. Repeat Finding from Prior Year: No. Effect: The Health Care Agency did not identify the required elements of the subaward to the subrecipients at the time of subaward, increasing the risk of noncompliance. Cause: The Health Care Agency?s procedures did not consistently ensure that the required award information and applicable requirements were communicated to subrecipients. Recommendation: We recommend that the Health Care Agency modify and strengthen its current policies and procedures to ensure that all required award information and applicable requirements are communicated to subrecipients at the time of subaward in accordance with 2 CFR section 200.331(a). Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Program: Block Grants for Community Mental Health Services CFDA No.: 93.958 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Health Care Services Award No. and Year: 68-0317191 (2019) Program: HIV Emergency Relief Project Grants (Ryan White Part A) CFDA No.: 93.914 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No. and Year: N/A Compliance Requirements: Subrecipient Monitoring Type of Finding: Subrecipient Deficiency in Internal Control and Instance of Non-Compliance Management Response and Corrective Action 1. Person Responsible: Maria Pirona, HCA Contract Services Division Manager 2. Corrective Action Plan: The HCA Contract Services Division has developed an agreement template with the required Federal Award information and it was implemented in December 2019. These changes are applied prospectively to new contracts. 3. Anticipated Implementation Date: December 2019
FAC accepted this audit on March 28, 2019 — management decision was due September 28, 2019.
GSA_MIGRATION
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2017-002
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GSA_MIGRATION
FAC accepted this audit on March 30, 2018 — management decision was due September 30, 2018.
GSA_MIGRATION
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GSA_MIGRATION
FAC accepted this audit on March 29, 2017 — management decision was due September 29, 2017.
GSA_MIGRATION
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GSA_MIGRATION
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