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

10.1. How do you ensure good fiscal accounting and tracking of funds? ADES assures that fiscal control and fund accounting procedures are established to ensure the proper accounting of their disbursal of federal funds paid to the state under this program, including procedures for monitoring the assistance provided under this title, and that the Arizona Auditor General's Office includes LIHEAP in its audit of program expenditures in accordance with the Single Audit Act of 1984. 10.1a Provide your definitions of the following: Obligation An obligation of funds is a legal liability to disburse funds immediately or at a later date as a result of a series of actions (50 CFR § 80.91) Expenditures All amounts of money paid out by a government during its fiscal year. Expenditure timeframe Expenditures usually indicate liquidation, or payments made on invoices, approved household applications, etc., that were approved or for which a commitment was made within the proper obligation timeline (LIHEAP-IM-2024-04) Administrative costs 20 CFR § 641.856 - What functions and activities constitute administrative costs? (a) Administrative costs are that allocable portion of necessary and reasonable allowable costs of recipients and program operators that are associated with those specific functions identified in paragraph (b) of this section and that are not related to the direct provision of programmatic activities specified in § 641.864. These costs may be both personnel and non-personnel and both direct and indirect costs. (b) Administrative costs are the costs associated with: (1) Performing general administrative and coordination functions, including: (i) Accounting, budgeting, financial, and cash management functions; (ii) Procurement and purchasing functions; (iii) Property management functions; (iv) Personnel management functions; (v) Payroll functions; (vi) Coordinating the resolution of findings arising from audits, reviews, investigations, and incident reports; (vii) Audit functions; (viii) General legal services functions; (ix) Developing systems and procedures, including information systems, required for these administrative functions; (x) Preparing administrative reports; and (xi) Other activities necessary for general administration of government funds and associated programs. (2) Oversight and monitoring responsibilities related to administrative functions; (3) Costs of goods and services used for administrative functions of the program, including goods and services such as rental or purchase of equipment, utilities, office supplies, postage, and rental and maintenance of office space; (4) Travel costs incurred for official business in carrying out administrative activities or the overall management of the program; (5) Costs of information systems related to administrative functions (for example, personnel, procurement, purchasing, property management, accounting, and payroll systems) including the purchase, systems development, and operating costs of such systems and; (6) Costs of technical assistance, professional organization membership dues, and evaluating results obtained by the project involved against stated objectives. (OAA § 502(c)(4)). 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. Please see attached DES-1-16-05 and DES-1-16-05-01 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 1 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: Approved personnel of Community Action Agencies may also review and make determinations on LIHEAP applications in their service area, as delegated by ADES, and subject to ADES oversight. 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. Schedule - Monitoring of CAAs conducting LIHEAP Intake activities will occur at least once every three years. When findings are identified, the agency will be placed on a Continuous Improvement Plan (CIP) under verification, provided that the finding has been resolved. Focus - Monitoring focuses on the following areas: program, fiscal, policy, general contract requirements, and navigator model compliance. Monitoring may occur through a desk review of materials or on-site monitoring. Weatherization monitoring encompasses the aforementioned areas, plus on-site quality control inspection of weatherized homes. Monitoring visits are also used for contractor training and technical assistance as required. Monitoring relates to CAA's separate evaluations of internal controls, such as control self-assessments or internal procedures and performance. Internal monitoring processes shall be practiced by the CAA. LIHEAP CAAs have a responsibility to monitor and be monitored for compliance with program requirements. ADES monitors CAA compliance with all requirements of federal, state, and local laws, contractual requirements, and directives in policy. Protocol - The Arizona Department of Economic Security shall provide the CAA with the request for needed documents, such as case management files, and fiscal and administrative records, at least one week prior to the scheduled monitoring date. Regarding unscheduled monitoring, ADES may request needed documents while on-site without prior notice. ADES will communicate recommendations of findings with key personnel and provide the opportunity for clarification and will provide written results of the monitoring within a reasonable amount of time. The CAA will ensure that key personnel are available for discussion during the scheduled monitoring and that the requested records are available and in order beginning on the first day of the scheduled on-site monitoring visit. It is the ADES’ expectation that the monitoring will begin at the agreed date and time for scheduled monitoring. The on-site monitoring visit will include these activities: Entrance Interview which includes the ADES Contracts staff, Program staff and finance staff, as well as the CAA's Program Managers, contracts and finance staff. During the entrance interview, ADES describes the monitoring activities that will take place, review the monitoring process, and review the scheduled interviews over the course of the two week monitoring period. On-site Visit consists of a program interview using a program interview guide, with follow-up questions appropriate to the local situation. Additionally, Program staff observe intake processes and A16 activities, when available. To monitor the ADES internal determinations, the Program team completes case audits monthly to ensure accurate determinations are made. Second-level audits will also be completed to ensure audits are being performed correctly. For non-CAA Community Navigation agencies providing LIHEAP intake assistance, meetings are held quarterly to review data and sample application outcomes, especially application denials, to determine the performance and accuracy of the applications received by the organization. ADES provides training and technical assistance to the agencies to ensure accurate applications are received. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: Agencies site visits are completed at least once every three years. If there are concerns related to a specific agency operation, the agency would be a priority for monitoring. Desk Reviews: Desk reviews of Agency reports are conducted monthly. They are reviewed for financial, contract, and federal compliance. 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Triannually 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.