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 Office of Community Services generates Activity Summary Reports for each CAA weekly, or more frequently if needed, which encompass case processing details, demographics, and financial data such as committed funds, invoiced amounts for payment, and actual spending. These reports are scrutinized to verify that funds are allocated and spent both appropriately and punctually. Community Action Agencies (CAAs) must submit quarterly reports detailing administrative and programmatic spending. These reports are then matched against each agency's sanctioned budget, with payments disbursed accordingly. When used in connection with a non-federal entity's utilization of funds under a federal award, obligations in Connecticut mean orders placed for property and services, contracts and sub-awards made, and similar transactions during a given period that require payment by the non- federal entity during the same or a future period. The initial step is to prepare the allocations for the federal fiscal year, which is generally based on the funding received the previous year. The allocations consider the number of applications received and transactions made for each fuel type (oil, gas, electric, etc.) from the previous year. Once the allocations are finalized, the contracts are prepared and include the budget amount for program services, administration, and Assurance 16. Tracking funds and expenditures, LIHEAP funds are monitored in CORE-CT, the accounting software utilized by the State of Connecticut. The system encompasses the general ledger, accounts payable, accounts receivable, and commitment control/budget, among others. The Special Identification Code (SID), budget reference, and project number separately track funds. CAPTAIN and Fuelware are the two energy data source systems employed statewide by community action agencies. DSS can generate expenditure reports from the source systems at any time for each CAA, upon which payments are based on CORE-CT. Expenditures for administration and Assurance 16 are inputted by the CAA into CORE-CT and require DSS review and approval before issuing subsequent payments. Accounting reconciliation of payment expenditures is conducted for each subgrantee throughout the program year and during the closeout, necessitating the signature of CAA fiscal and program staff. Refund checks from utilities are received continuously and reviewed by the DSS Office of Community Services, which administers LIHEAP. The check stub includes the client's name, application number, CAA name, payment amount, and the program year of the refund. This information is then transferred to a spreadsheet and sent with refund checks to the DSS Division of Fiscal Services, which deposits the funds according to the SID, budget reference, and project number. 10.1a Provide your definitions of the following: Obligation In Connecticut obligation means orders placed for property and services, contracts and sub-awards made, and similar transactions during a given period that require payment by the non-federal entity during the same or a future period. The initial step is to prepare the allocations for the federal fiscal year, which is generally based on the funding received the previous year. The allocations consider the number of applications received and transactions made for each fuel type (oil, gas, electric, etc.) from the previous year. Once the allocations are finalized, the contracts are prepared and include the budget amount for program services, administration, and Assurance 16. Expenditures An expenditure is the issuance of payment for allowable purposes in alignment with HHS cost standards & LIHEAP terms & conditions to support the provision of LIHEAP services to eligible recipients. An obligation must occur prior to an expenditure payment is made. In alignment with LIHEAP Informational Memorandum, an expenditures usually indicate liquidation, or payments made on invoices, approved household applications, as well as other direct and indirect expnses. Expenditure timeframe In accordance with HHS costs standards, Connecticut obligates and expend LIHEAP funds in accordance with the laws and procedures applicable to the obligation and expenditure of its own funds, in alignment with CT cost standards, accounting manual and contractual agreements. Fiscal control and accounting procedures are sufficient to (a) permit preparation of reports required by the statute authorizing the block grant and (b) permit the tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of the statute authorizing the LIHEAP. Administrative costs In accordance with 96.88(a), "admnistrative costs" are defined as costs/expenses associatd with planning, administration and oversight of the LIHEAP program. Any expenditure for governmental functions normally associated with administration of LIHEAP must be included in determining administrative costs subject to the statutory limitation on administrative costs (10%), regardless of whether the expenditure is incurred by the State, a subrecipient, a grantee, or a contractor of the State. 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. As a pass-through entity for Federal funds, DSS is responsible for the monitoring of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and associated terms and conditions. As part of the monitoring process, DSS Office of Quality Assurance Audit Division is responsible for ensuring that subrecipients take timely and appropriate action on all deficiencies noted in audit reports pertaining to the Federal award provided by the Department to each subrecipient. The Audit Division is also responsible for the issuance of a management decision for audit findings pertaining to any Federal award. The monitoring of subrecipient audit reports is performed by the Departments Audit Division. On an annual basis, the Audit Division compiles a list of all recipients of both State and Federal Funds to determine which subrecipients could meet the State and Federal Single Audit expenditure thresholds ($300,000/$750,000). The Department obtains the single audit reports either from the State Office of Policy Management website or directly from the subrecipient to determine whether there were any reportable findings. If there were no reportable findings related to the Departments programs in the audit report, there are no further actions taken. The Audit Division will review the subrecipients corrective action plan for any audit report that contains reported findings related to the Department Programs. If the corrective action plan does not provide sufficient information to issue a management decision, the Audit Division will request additional information or documentation from the subrecipient, including a request for auditor assurance related to the documentation. The Audit Division would consult with the Departments Office of Community Services if needed prior to issuing the management decision. The Departments Audit Division will issue the management decision letter to the subrecipient within six months of receipt of the audit report. The management decision letter will clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. The letter will indicate whether the correction action plan is appropriate to resolve the audit deficiency. The management decision will describe any appeal process available to the subrecipient. 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 reporting Connecticut's Statewide Single Audit identified that (1) the Department of Social Services (DSS) reported nine subawards, totaling $63,913,532, between 18 and 65 days late on FSRS; and (2) DSS reported the incorrect contract number for one LIHEAP subaward, totaling $262,193. There were no questioned costs. Yes training changes 2 monitoring Connecticut's Statewide Single Audit identified that the Department of Social Services (DSS) did not conduct a full subrecipient monitoring for every subrecipient. There were no questioned costs. Yes staffing/management changes 3 reporting Connecticut's Statewide Single Audit identified that the Department of Social Services (DSS) did not have detailed backup documentation for certain reported levels of assistance. There were no questioned costs. Yes staffing/management changes 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 Connecticut Department of Social Services (DSS) is responsible for establishing and maintaining effective internal control over financial reporting, which includes safeguarding of assets and compliance with applicable laws and regulations. The Connecticut Office of the State Comptroller (OSC) maintains a guide for internal controls and accountability for all State Agencies and Authorities to ensure integrity and efficiency in accounting and reporting, and requires all State Agencies to conduct an annual internal control self-assessment, prior to June 30, as required by the Internal Control Guide. This Internal Control Guide has been modeled on the Federal Managers Financial Integrity Act of 1982, and draws upon a number of internal control initiatives, including work by the United States General Accounting Office and Office of Management and Budget (OMB) Circular Uniform Guidance, Managements Responsibility of Internal Control. The CT DSS, Division of Financial Services conducts the self-assessment of the effectiveness of the agencys internal control over financial reporting in accordance with these guidelines. Although primary responsibility for the implementation and risk assessment is with the CT Department of Social Services, in accordance with the statutory authorities, the monitoring function is shared among the CT State Auditors of Public Accounts (APA), Office of the State Comptroller (OSC), and the Office of Policy and Management (OPM). The CT State Auditors conduct annual and biennial audits of the CT Department of Social Services. During the audit process, APA evaluates the effectiveness of the CT Department of Social Services internal control structure and performs tests of the agencys compliance with certain provisions of law, regulations, contracts and grants. In addition, as required by the Federal Single State Audit Act, APA conducts an annual Statewide Single Audit of the States general purpose financial statements, as well as its federal financial assistance programs. The States general purpose financial statements, as well as its federal financial assistance programs. 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: The monitoring process involves onsite reviews of sample program files and payments to ensure compliance with the State Plan, conducted by DSS staff. A key takeaway from the pandemic-related challenges is that the department will continue to utilize remote activities via computer, ensuring that our monitoring process remains both efficient and effective. 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. Each CAA is assigned staff from the DSS Office of Community Services to provide technical assistance and monitoring oversight. Frequent on-site visits are conducted throughout the program year to review sample files and address any emerging issues. Additionally, a sampling of deliverable fuel slips and associated payments is examined to ensure accurate, proper, and timely payments. While onsite evaluations are ongoing, a key takeaway from the pandemic-related challenges has equipped us to effectively continue remote reviews via computer, maintaining the same high level of oversight and efficiency.. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: CAAs are continuously monitored throughout the program year for programmatic compliance through both onsite and remote reviews. Fiscal monitoring is conducted quarterly, both remotely and onsite. If any concerns arise, agencies are monitored more frequently to ensure compliance. Desk Reviews: CAAs are continuously monitored throughout the program year for programmatic compliance through both onsite and remote reviews. Fiscal monitoring is conducted quarterly, both remotely and onsite. If any concerns arise, agencies are monitored more frequently to ensure compliance. 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? 1 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.