Colorado WIC Program Policies and Procedures Section 10: Monitoring and Audits Revised: 01/01/2025

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Fiscal Monitoring

Policy: The US Department of Agriculture (USDA) Audit Guide specifies that the objective of a local agency financial audit is "to determine whether the local agency has adequate control over funds and an effective accountability system." The purpose of a WIC local agency fiscal monitoring is to ensure that the local agency is in compliance with State rules and Federal Regulations.

Regulation: 7 CFR 246.19 (b), 7 CFR 246.20, 7 CFR 3015 Implements OMB circulars, 7 CFR 3016 Implements OMB circulars, P.L. 89-642 Child Nutrition Act of 1966 17-62 (11/6/92, p 33) Biennial review requirement P.L. 98-502 Single Audit Act , OMB A-87 Cost principles for state and local governments, OMB A-102 Grants and cooperative agreements with state and local governments, OMB A-110 Grants and agreements with institutions of higher education, hospitals, and other nonprofit organizations , OMB A-122 Cost principles for nonprofit organizations, OMB A-128 Audits of state and local governments, OMB A-133 Audits of institutions of higher education and other nonprofit organizations

Procedure/Additional Guidance: The local agency financial monitoring is conducted in conjunction with the Colorado Department of Public Health and Environment (CDPHE) Financial Risk Management System (FRMS) team. The FRMS process was created within CDPHE to ensure standardization of the monitoring process across programs within the department and to eliminate duplication of efforts regarding information gathered at the local level during the fiscal monitoring visit. The result of this effort is a partnership between the department and the WIC program in evaluating each agency’s compliance with contractual fiscal requirements. FRMS applies to all Colorado local health agencies and some nonprofit agencies.

FRMS provides the department the ability to implement risk-based monitoring. The foundation for the system is a standardized assessment of a contractor’s financial management system and results in a risk rating of Low, Medium or High. The rating provides the WIC program with an understanding of how the contractor manages the funding received from the department and consequently what the potential is for noncompliance with fiscal requirements. The FRMS team conducts a thorough examination of each agency’s overall accounting practices via a site visit at least once every 24 months and a questionnaire every 12 months for agencies exhibiting low risk. That visitation schedule increases to once per year for agencies rating “high.” Areas reviewed include agency payroll and timekeeping efforts and policies and procedures among other topics. The results of this examination are maintained within CDPHE and the overall rating and recommendations for improvement (if applicable) are shared with the WIC program. A diagram of the FRMS process as well as a sample questionnaire is included with this manual.

The State Fiscal Unit Manager and/or WIC Fiscal Officer will perform an in depth fiscal monitoring of each local agency at least once every two years. In addition to using the information provided through the FRMS process, the WIC fiscal personnel will examination operational expenses specific to WIC reimbursement invoices, including supplies, equipment, travel, cost allocations specific to rent, phone, utilities, etc. If through the FRMS process, discrepancies are identified relating to personnel expenses charged to the WIC or the Breastfeeding Peer Counseling program, additional review of invoices may be necessary. Depending upon the size of the agency and the number of expenses to review, the fiscal monitoring visit will either be conducted on-site or through a desk audit process.

For those agencies that do not fall under the FRMS guidelines, the WIC fiscal officer will conduct a full monitoring, including a review of time and effort and payroll costs in addition to the operational costs mentioned above. The monitoring form for those agencies is listed at the end of this section.

An entrance interview conducted either in person or on the phone, will be held prior to the monitoring with appropriate local agency staff to explain the monitoring process. At least one local agency staff member must be available to answer questions. Due to the nature of a fiscal monitoring, this may involve staff members from various departments (i.e., personnel, accounting), as well as a WIC staff member.

An in-depth fiscal monitoring consists of the State staff member looking at the source documentation to back up all costs billed to WIC. The Contract Reimbursement Statements (CRTs) for the period of time being monitored will be compared to the source documents to assure that all costs are properly supported and allowable. A sample of the fiscal monitoring form is provided on page 3.

Colorado WIC Program Policies and Procedures Section 10: Monitoring and Audits Revised: 01/01/2025

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The following types of records must be made available by the local agency at the time of the review:  Original receipts, invoices, etc. for all items charged to WIC (supplies, utilities, etc.).  Lease agreements (where applicable).  Documentation of the methodology used for allocation of costs (where applicable).  Travel expense forms.

An exit conference conducted either in person or on the phone, will be held with appropriate local agency staff to discuss results of the monitoring and any recommendations. A written summary of the monitoring visit will be sent to the local agency within 30 days. The local agency will respond with a written plan of action and target dates for resolution of problems not already corrected. After review of the local agency's response, the State agency will follow up as necessary. Any unallowable costs found during the monitoring will be reclaimed within the same fiscal year either through a check paid to the CDPHE or through a credit to a reimbursement invoice submitted within the same fiscal year as the unallowable expense. The replayment methodology shall be approved in advance by the WIC Fiscal Administrator.

All local agencies will ensure that the WIC Program is included in audits of the agency as required in the state/local agency contract.

Colorado WIC Program Policies and Procedures Section 10: Monitoring and Audits Revised: 01/01/2025

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Colorado WIC Program Policies and Procedures Section 10: Monitoring and Audits Revised: 01/01/2025

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Colorado WIC Program Policies and Procedures Section 10: Monitoring and Audits Revised: 01/01/2025

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