10 Program, Fiscal Monitoring, and Audit, 2605(b)(10) - Assurance 10

10.1. How do you ensure good fiscal accounting and tracking of funds? The State maintains strong fiscal accountability and fund tracking through structured processes, internal controls, and coordinated oversight across multiple agencies. Division of Public Assistance (DPA) eligibility technicians review and process LIHEAP applications and certify payments for eligible households. The division’s finance unit reviews and authorizes each payment certification to ensure accuracy and compliance. The LIHEAP Program Coordinator works closely with the division’s Chief Administrative Officer and the Alaska Department of Revenue to monitor expenditures and ensure fiscal integrity. The Division of Legislative Audit conducts regular audits of the LIHEAP program to verify compliance with federal and state regulations and to ensure the accuracy of financial reporting. For weatherization activities, the Alaska Housing Finance Corporation (AHFC), which operates under the Alaska Department of Revenue, submits to the LIHEAP Program Coordinator quarterly invoices prepared by its accounting staff. All expenditures comply with the State of Alaska’s procurement statute (AS36.30) and financial policies outlined in the Alaska Administrative Manual (AAM), Sections 81 and 82. The AAM aligns with federal regulations at 45 CFR 75 and 2 CFR 200 and supports compliance with Single State Audit requirements under the oversight of the Legislature’s Division of Legislative Audit. Relevant policies are available at https://doa.alaska.gov/dof/manuals/amm. 10.1a Provide your definitions of the following: Obligation The promise to pay for goods or services, usually supported by a Field Purchase Order, contract, encumbrance, approved application, or Notice of Action. Expenditures The actual payment made for goods and services. Expenditure timeframe State Fiscal Year – July 1 through June 30th Administrative costs Administrative employee salary and benefits, procurement, travel to national conferences & trainings, computer maintenance & information technology (IT) support, leases & storage for archives, dues, public relations, and office supplies. Audit Process 10.2. Is your LIHEAP program audited annually under the Single Audit Act and OMB Circular A - 133? Yes No 10.2a - if yes, describe your auditor selection process. The Alaska Administrative Manual (AAM) is in alignment with 45 CFR 75 and 2 CFR 200 and is designed to comply with a Single State Audit under the State Legislature's Alaska Division of Legislative Audit. 10.3. Describe any audit findings of the grant recipient (i.e. State/Tribe/Territory) rising to the level of material weakness or reportable condition cited in the single audits, inspector general reviews, or other government agency reviews from the most recently audited fiscal year. No Findings Finding Type Brief Summary Resolved? Action Taken Finding 2023-044: Internal control weaknesses were identified over logical access to the system used to process energy assistance applications. Deficiencies in internal controls increase the risk of 1 other In Progress procedure/policy changes unauthorized system use which may lead to inaccurate eligibility determinations or unallowable costs. 2 other Finding 2023-045: Twenty-two of 60 LIHEAP applicant case files tested (37 percent) had eligibility errors. Some of the cases had more than one of the following errors: Eight cases (13 percent) had the benefit amount incorrectly calculated based on incorrect data input by an eligibility technician (ET) in the Energy Community Online System (ECOS.) Five cases (eight percent) lacked documentation supporting the income used by an ET to determine eligibility. Six cases (10 percent) lacked documentation showing the applicants income was verified by an ET. Four cases (seven percent) lacked proof of the applicants heating costs. Five applications (eight percent) could not be located by DPA staff. Four cases (seven percent) had incorrect income used by an ET when determining eligibility. The four errors did not impact the eligibility determination. Inadequate internal controls increase the risk that ineligible recipients received heating assistance payments and that eligible recipients received incorrect payments. Auditors found eight recipients had benefits incorrectly calculated, resulting in overpayments and underpayments. The errors resulted in questioned costs totaling $8,685. Questioned costs for the population are projected to be $1,324,997 based on the dollar of noncompliance observed in the sample projected over the tested population. In Progress training changes 3 financial Finding 2023-046: DPA did not maintain adequate controls to monitor and ensure compliance with the following earmarking requirements: no more than 10 percent of a states LIHEAP funds for federal award may be used for planning and administrative costs and no more than 15 percent of the greater of the funds allotted or funds available may be used for low-cost residential weatherization or other energy-related home repairs. The lack of procedures to ensure compliance with LIHEAP earmarking requirements could result in unallowable expenditures. Auditors noted the 10 percent threshold for planning and administration for the FFY22 awards had already been exceeded by $578,101 as of June 30, 2023. Funds exceeding the 10 percent threshold will need to be returned to the federal government at the end of the grant period. Further, the lack of procedures could lead to ineffective management of grant awards and increase the risk of noncompliance. In Progress staffing/management changes 4 financial Finding 2023-047: DPA obligated more than 10 percent of the FFY22 grant award during the second fiscal year of the award. The lack of procedures increases the risk of noncompliance with LIHEAP period of performance requirements, which could result in the federal awarding agency imposing conditions or taking corrective actions, including additional requirements or withholding/terminating funds. In Progress staffing/management changes Finding 2023-048: Key line items 5 reporting In Progress staffing/management changes for the FFY22 LIHEAP Performance Data Form, FFY22 Annual Report on Households Assisted by LIHEAP, and Quarterly Performance and Management Reports were not accurate or not supported by accounting or other records. In addition, the FFY22 LIHEAP Carryover and Reallotment Form was not submitted within required timeframes. Errors were due to a lack of procedures for preparing the reports, as well as the absence of review by an individual other than the preparer of the reports. 10.4. Audits of Local Administering Agencies What types of annual audit requirements do you have in place for local administering agencies/district offices? Select all that apply. Local agencies/district offices are required to have an annual audit in compliance with Single Audit Act and OMB Circular A-133 Local agencies/district offices are required to have an annual audit (other than A-133) Local agencies/district offices' A-133 or other independent audits are reviewed by Grant recipient as part of compliance process. Grant recipient conducts fiscal and program monitoring of local agencies/district offices Local agencies and district offices are required to have an annual audit in compliance with Single Audit Act and OMB Circular A-133 Compliance Monitoring 10.5. Describe your monitoring process for compliance at each level below. Check all that apply. Grant recipients have a policy in place for appropriate separation of duties and internal controls. Internal program review Departmental oversight Secondary review of invoices and payments Other program review mechanisms are in place. Describe: The State of Alaska employs multiple layers of oversight to ensure compliance with program requirements. A statewide case review team actively conducts random reviews of processed applications to assess adherence to policy and procedural standards. This team identifies trends, ensures accuracy in eligibility determinations, and provides feedback to local offices for corrective action when necessary. Additionally, Alaska participates in the Single Audit coordinated through the Legislature’s Division of Legislative Audit. This comprehensive audit evaluates internal controls and compliance across federally funded programs. Findings from these audits are made publicly available and are used to guide improvements and strengthen accountability. Reports can be accessed at: https://legaudit.akleg.gov/audits/ single-audits. These mechanisms ensure that both routine operations and broader program functions remain in compliance with federal and state regulations. Local Administering Agencies/District Offices: On - site evaluation Annual program review Monitoring through central database Desk reviews Client File Testing/Sampling Other program review mechanisms are in place. Describe: 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. Not applicable - Local agencies are not used to process LIHEAP applications. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: Not applicable - Local agencies are not used to process LIHEAP applications. Desk Reviews: A Public Assistance Analyst conducts random audits for accuracy throughout the program year. Additionally, there are plans to include LIHEAP cases in the DPA Quality Assurance review processes, which are currently focused on SNAP and Medicaid cases. 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Other 10.9. How many local agencies are currently on corrective action plans? 0 If any of the above questions require further explanation or clarification that could not be made in the fields provided, attach a document with said explanation here.