10.1 Effective Internal Controls

Lead Agencies must ensure the integrity of the use of CCDF funds through effective fiscal management and must ensure that financial practices are in place. Lead Agencies must have effective fiscal management practices in place for all CCDF expenditures. 10.1.1 Organizational structure to support integrity and internal controls Describe how the Lead Agency’s organizational structure ensures the oversight and implementation of effective internal controls that promote and support program integrity and accountability. Describe: Multiple layers of authority and responsibility within the Office of the State Superintendent of Education (OSSE) and District Government work together to ensure program integrity and accountability in the use of federal and local funds and compliance with applicable statutes, regulations, and programmatic rules and requirements. Within OSSE’s Division of Early Learning, programmatic units (Licensing, Compliance, and Subsidy Unit and Quality Improvement Unit for Child Care and Development Fund [CCDF]-related programming) are responsible for designing programs and grants in compliance with local and federal requirements; developing and monitoring grantee scopes of work and monitoring grantee performance; and training and supporting child development facilities and Department of Human Services (DHS) staff to implement child care subsidy eligibility determination and attendance policies and processes in compliance with OSSE, District, and federal requirements and policies. These programmatic units partner with the Division of Early Learning’s Policy Unit to regularly review programmatic policies and processes to ensure compliance with federal and local requirements, and with fiscal staff in the Division of Early Learning’s Operations and Grants Management Unit to monitor grantee, contractor, and subsidized child care provider expenditures and reimbursements to ensure fiscal integrity and compliance with District and federal laws, policies, and processes related to integrity of public funds. This collaboration includes routine one-on-one check in meetings between program and fiscal staff. During these meetings, staff review, discuss and flag issues related to vendor/subcontractor grants, with a focus on addressing specific issues on individual grants/contracts and identifying trends across one or more grants/contracts that inform future training and technical assistance. These ongoing meetings ensure both programmatic and fiscal teams are accountable for and to operationalize program integrity and internal controls. As part of this shared accountability for program integrity, and to provide an additional layer of checks and balances on all programmatic expenditures, all grantee, contractor, and subsidized child care provider reimbursements are reviewed by both a programmatic and a fiscal staff member prior to approval for reimbursement, with additional layers of supervisory review in place for larger payments (as described below). Programmatic, policy, and fiscal staff within the Division of Early Learning (DEL) are accountable to the Director of Licensing and Compliance (for child care subsidy agreements and payments), Director of Quality Initiatives (for quality and supply building grants supported with CCDF and local funds), Policy Director (for compliance with federal and local laws and regulations), and Director of Operations and Grants Management (for fiscal integrity), who are in turn accountable to the Deputy Superintendent of Early Learning. This accountability structure includes communicating and reviewing monthly grantee expenditure and programmatic reports which further supports program integrity. As the CCDF administrator, the Deputy Superintendent of Early Learning holds overall accountability for program integrity of the District’s Child Care Subsidy Program and implementation of CCDF-funded programs, with support and partnership of other OSSE divisions and infrastructure that support program integrity across all locally and federally funded programs administered by the agency (see further description below). The Deputy Superintendent of Early Learning supervises the directors of each respective unit to ensure clear coordination and communication between fiscal, programmatic, and policy staff and facilitates coordination and communication between Division of Early Learning staff and other OSSE units that administer agency-wide systems, infrastructure, and policies supporting program integrity. The Deputy Superintendent of Early Learning reports directly to the State Superintendent of Education, who is appointed by and accountable to the Mayor of the District of Columbia. As both the state education agency (SEA) for the District of Columbia and the CCDF lead agency, OSSE is responsible for administering federally and locally funded grant programs annually and has put in place robust centralized infrastructure to ensure programmatic and fiscal integrity across locally and federally funded grants programs. Within OSSE’s Operations Division, the Office of Grants Management and Compliance puts in place and manages infrastructure and internal processes for ensuring integrity of grants funding, including the Enterprise Grants Management System (EGMS) through which all OSSE grants (including those supported with CCDF funds) are administered, and provides training, technical assistance, and monitoring to ensure that programmatic divisions comply with agency, District, and federal policies and requirements to ensure integrity and appropriate tracking of public funds. OSSE’s Office of General Council partners with programmatic divisions and the Office of Grants Management and Compliance (OGMC) to ensure that all locally and federally funded grants are implemented in compliance with applicable local and federal laws and regulations. Within the District, OSSE works closely with two other District Government agencies responsible for ensuring fiscal integrity and internal controls: The Office of the Chief Financial Officer (OCFO) and the Office of Contracting and Procurement (OCP). The OCFO, whose mission is to enhance the fiscal and financial stability, accountability, and integrity of the Government of the District of Columbia, is responsible for operating and maintaining a coordinated financial management system to budget, collect, control, and properly account for all District funds and for developing, implementing, and monitoring the District’s accounting policies and systems and producing the District’s audited Comprehensive Annual Fiscal Report. Through the District Integrated Financial System (DIFS), the OCFO processes all payments to grantees, vendors, and subsidized child care providers on behalf of OSSE; ensures that funds are assigned to appropriate accounts with adequate controls and tracing to establish that federal and local funds are used only for purposes authorized by federal and local laws; and develops and submits required financial reports (e.g., the 696 for CCDF funds) to the federal government in coordination with and on behalf of OSSE. The OCFO staff reviews payments before processing and returns to the team and supervisor necessary clarifications and corrections. These steps support the agency’s internal controls by minimizing agency errors, such as processing multiple payments in one month for one child. OCP provides contracting services for OSSE and other District agencies. OCP is responsible for both establishing procurement processing standards that conform to regulations and monitoring the effectiveness of procurement service delivery. Procurement processing and management are executed by procurement professionals who are assigned to agency worksites to directly collaborate with program staff throughout the entire procurement process. OCP core services include the DC Supply Schedule, Purchase Card (P-Card) program, and the surplus property disposition and re-utilization program. OCP’s learning and certification programs support the ongoing development of staff proficiency and procurement service quality. CCDF-funded contracts are managed in OCP’s electronic Procurement Automated Support System (PASS), which enables OSSE to track obligations, invoices, and payments in compliance with District procurement law. This structure, and the multiple layers of accountability and coordination it puts in place ensure multiple checks and balances on all programmatic and fiscal activities and expenditures associated with OSSE’s implementation of the CCDF to ensure program integrity and identify and prevent potential fraud risks. Include the following elements in your description: 1. Assignment of authority and responsibilities related to program integrity. 2. Delegation of duties. 3. Coordination of activities. 4. Communication between fiscal and program staff. 5. Segregation of duties. 6. Establishment of checks and balances to identify potential fraud risks. 7. Other activities that support program integrity. 10.1.2 Fiscal management practices Describe how the Lead Agency ensures effective fiscal management practices for all CCDF expenditures, including: a. Fiscal oversight of CCDF funds, including grants and contracts. Describe: OSSE monitors all CCDF sub-recipients. Fully executed grant agreements and contracts are in place for all sub-contractors and/or sub-grantees and include a detailed Scope of Work (SOW) which outlines deliverables, activities, and reporting requirements to ensure compliance with grant terms and conditions. OSSE requires all sub-recipients to participate in ongoing training and meetings. Early post-award meetings cover the specific work to be done and provide a review of OSSE's financial and programmatic policies and procedures and relevant local and federal regulations. Ongoing training and meetings are used to troubleshoot issues and provide updates and/or reminders of information provided in the early post-award meetings. OSSE follows the agency-wide reimbursement request policy to ensure fiscal accountability for sub-recipients. Sub-recipient reimbursement requests and supporting documentation are reviewed by both a programmatic lead and a fiscal lead at OSSE to ensure payments are accurate and costs are allowable. Invoice submissions for contracts are also reviewed and approved by the program manager directly overseeing the work and the Director of Operations and Management to ensure allowable uses of funds. The OCFO staff reviews payments before processing and returns to the team and supervisor necessary clarifications and corrections. These steps support the agency’s internal controls by minimizing agency errors, such as processing multiple payments in one month for one child. For providers participating in the District’s Child Care Subsidy Program, the Provider Agreement for Subsidized Child Care Services serves the functions of a contract and outlines the programmatic and quality requirements that providers accepting subsidy funds must meet (including participation in Capital Quality, the District’s quality rating and improvement system (QRIS), and administration of screening to all CCDF children within 45 days of enrollment); the terms and timing on which providers are paid for services rendered; requirements for identifying, reporting, and recouping or correcting potential overpayments- or underpayments; methods of dispute resolution; policies and procedures for reporting fraud the consequences; and penalties associated with these actions, including the steps the agency will take against providers who intentionally commit fraud in the subsidized child care program. Level II providers, which are authorized to conduct eligibility determinations on behalf of the OSSE, sign an additional agreement supplement detailing their responsibilities. Under OSSE’s current payment structure, and consistent with the D.C. Government Quick Payment Act of 1984 (D.C. Law 5-164, D.C. Official Code 2-221.01 et seq), child care subsidy providers are reimbursed on a monthly basis, based on services rendered. Subsidy payments are generated using child care provider attendance records. The records serve as a provider’s invoice for reimbursement for child care services. Providers participate in the required training related to submitting attendance records. Division of Early Learning attendance and eligibility monitors, the subsidy program manager, and grants and operations staff collaborate with OSSE’s Office of the Chief Information Officer (CIO) and OCFO to ensure timely and accurate processing of all subsidy payments. Subsidy payments complete multiple rounds of review by supervisory staff, the subsidy program manager, and the Director of Operations and Grants Management and are reviewed and signed by the Deputy Superintendent of Early Learning prior to the release of monthly payments. These multiple layers of review serve to ensure proper documentation is provided and tracked and to detect and correct potential payment errors before processing. b. Tracking systems that ensure reasonable and allowable costs and allow for tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the provision of this part. Describe: OSSE uses EGMS for the fiscal management of grants. The system was designed to improve the management and administration of federal and local grants managed by OSSE, including tracking grant costs and expenditures. EGMS provides users with information on the status of grant applications, awarded amounts, expenditures to date, and payment status of pending reimbursements. EGMS offers sub-grantees and OSSE fiscal and programmatic staff a single and centralized location to manage all OSSE grant applications, submission of programmatic and/or fiscal amendments to the original application, and submission of electronic reimbursement requests with required supporting documentation. The system provides OSSE operational efficiencies, security architecture, central data storage and warehousing, increased transparency, workflow automation, and performance accountability. OSSE's grants management and program staff review monthly reimbursement requests in EGMS to determine that all expenses are aligned with the grantees' SOW and approved budget. Reimbursement requests are reviewed by two internal OSSE staff members to ensure costs are being expended against the approved budget, and are allowable, reasonable, and allocable. These requests, alongside programmatic reports, and onsite monitoring, provide a thorough review of the grantee's compliance with OSSE's approved programmatic application, work plan, and budget. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: DIFS serves as the authoritative record of all District Government expenditures and is managed by OCFO. OCFO accounting staff prepare required state and federal fiscal reports based on authoritative records in DIFS and collaborate with the Division of Early Learning Director of Operations and Grants Management to ensure programmatic review and timely and accurate submission of expenditure reports. For other required federal reporting, OSSE’s CCDF administrator and co-administrator monitor and track required CCDF federal reports and put in place collaborative processes and routines to collect required information from Division of Early Learning programmatic and fiscal staff, review reports for accuracy and completeness, and ensure timely submission. d. Other. Describe: OSSE conducts mid-year and year-end evaluations of sub-recipients, including onsite monitoring. Each program maintains records on file for a minimum period of three years. These records must be accessible at all times for review upon request by officials from the District Government or the federal government. On-site visits support efforts to maintain quality and ensure compliance with OSSE grant and contractual agreements, inclusive of OSSE's internal policies and procedures, and relevant District and federal regulations. 10.1.3 Effectiveness of fiscal management practices Describe how the Lead Agency knows there are effective fiscal management practices in place for all CCDF expenditures, including: a. How the Lead Agency defines effective fiscal management practices. Describe: OSSE defines effective fiscal management practices as ensuring the effective application of grant funds and compliance with regulations through guidelines set by the fund issuer. Supporting policies and procedures include: cost-effective budgeting, monitoring of expenditures, and documentation of all fiscal transactions; timely billing and payment for services rendered; and implementation of internal tracking systems to ensure reasonable and allowable cost reimbursement. Information and data documenting these systems, as well as programmatic and fiscal activities and expenditures, must be readily available for audit and compliance checks. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: OSSE’s OGMC sets policies and provides support on fiscal practices. Through the audit process, relevant staff meet at least annually to assess the implementation of internal procedures and prepare a brief internal report on compliance with the procedures. After the audit is complete, the summary report is shared with senior-level budget and operations staff. Within the Division of Early Learning, the Operations and Grants Management Unit monitors the timeline for processing monthly reimbursement submissions and convenes program and fiscal grants management staff to review timeliness reports, which may result in changes to existing policies or processes. The team provides routine updates to OSSE’s agency-aide Grants Management and Compliance Committee. c. How the results inform implementation. Describe: OSSE’s OGMC convenes an agency- wide committee with representatives from each division to review the agency’s adherence to the policies and procedures established for effective fiscal management and compliance with both federal requirements (2 CFR 200.305(b)(3)) and District requirements (D.C. Government Quick Payment Act of 1984, as amended, D.C. Law 5-164, D.C. Official Code 2-221.01 et seq). Information collected through the OGMC Agency Committee and the unit-specific internal grants report help inform policy changes, procedural updates, or system enhancements. d. Other. Describe: N/A 10.1.4 Identifying risk Describe the processes the Lead Agency uses to identify risk in the CCDF program including: a. Each process used by the Lead Agency to identify risk (including entities responsible for implementing each process). Describe: OSSE's risk assessment activities include conducting evaluations for each sub-grantee. The evaluation confirms if the sub-grantee was non-compliant with any grant fiscal requirements. If the evaluation shows that a grantee has a finding, the grantee will be subject to a corrective action, determined by OSSE and based on the nature of the finding. These actions may include additional reporting on grant/fiscal-related matters, increased monitoring/oversight by grants and programmatic staff, or other actions that may prohibit the grantee from participating in the grant in a subsequent year. b. The frequency of each risk assessment. Describe: The Division of Early Learning Operations and Grants Management Unit conducts annual risk assessments. Additionally, OCFO completes single audit requests annually and will request OSSE to provide documentation for expenditures in support of those audits. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: OSSE uses risk assessment results to identify areas for improvement and set measurable goals to improve management processes. This includes assessment of organizational structure, resources, commitment, and documented methods to plan and execute change management processes to ensure improved outcomes. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: OSSE’s risk assessment process is used to determine compliance with corrective action plans (when a grantee is issued a finding following an evaluation) and to identify, decrease, and minimize the likelihood of fraud, waste, or abuse. Risk assessments are effective when OSSE reports full compliance with corrective actions, records a decrease in the corrective actions issued, and demonstrates progress on meeting risk assessment areas of improvement. Our fiscal monitors continuously review fiscal reports, reimbursement submissions, and invoicing data and work with program staff to identify any additional needs not met by the grant recipient. e. Other. Describe: The Division of Early Learning Operations and Management Director and program manager(s) receive training from OGMC on additional grant topics to ensure we uniformly employ as an agency the best grant management practices for fiscal oversight and monitoring. 10.1.5 Processes to train about CCDF requirements and program integrity Describe the processes the Lead Agency uses to train staff of the Lead Agency and other agencies engaged in the administration of CCDF, and child care providers about program requirements and integrity. a. Describe how the Lead Agency ensures that all staff who administer the CCDF program (including through MOUs, grants, and contracts) are informed and trained regarding program requirements and integrity. i. Describe the training provided to staff members around CCDF program requirements and program integrity: The CCDF administrator and co- administrator, director of operations and grants management and other fiscal staff, quality initiatives staff responsible for overseeing subgrants fully or partially funded with CCDF funds, and OCFO staff who submit financial reports on behalf of the lead agency all completed fiscal fundamentals training offered by the Administration of Children and Families (ACF) and regularly participate in ACF- sponsored professional development and technical assistance opportunities related to fiscal management, as appropriate to their roles and responsibilities. The CCDF administrator and co-administrator also reach out to request technical assistance on fiscal and grants management questions when needed. OSSE provides quarterly child care eligibility policy training for all Level II providers and Department of Human Services (DHS) employees who conduct eligibility determinations. Email notifications for upcoming orientations are sent to all child care subsidy providers. ii. Describe how staff training is evaluated for effectiveness: OSSE uses surveys, post- training efficiency quizzes, results from quarterly audits, and results from the triennial federal error rate/improper payment audit report to evaluate the effectiveness of staff training. When applicable, the CCDF team meets with DHS Child Care Services Division (CCSD) and Level II provider eligibility staff to share findings, debrief training and, based on information gathered from those meetings, update staff training to ensure staff develop and/or maintain the skills and knowledge to effectively carry out program objectives in compliance with program requirements. Lead agency team members who participate in ACF- sponsored technical assistance and training on fiscal matters debrief afterwards to document lessons learned, identify potential implications for OSSE practice and processes, and surface any needs for further guidance or technical assistance. The CCDF co-administrator maintains a listing of all currently active technical assistance requests and monitors progress of those requests. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: Risk assessment information is used to evaluate and address training needs by identifying areas in need of improvement, which then allows for training needs to be addressed and administered. b. Describe how the Lead Agency ensures all providers for children receiving CCDF funds are informed and trained regarding CCDF program requirements and program integrity: i. Describe the training for providers around CCDF program requirements and program integrity: Child care providers interested in participating in the Child Care Subsidy Program must complete the program orientation, which is available online and offered in English and Spanish. Providers must complete a brief quiz after the orientation, which ensures an understanding of program requirements. Providers also have the option to schedule a live, virtual orientation with the subsidy team. The Subsidy Program Manual is available on the OSSE website for all child care providers to use as a reference. Any programmatic changes are communicated via email to child providers, and subsidy staff conduct targeted outreach to ensure understanding. OSSE provides quarterly child care eligibility policy training for all Level II providers who conduct eligibility determinations and all subsidized child care providers attend a mandatory child care subsidy training annually. ii. Describe how provider training is evaluated for effectiveness: OSSE periodically reviews training materials, policies, administrative issuances, and other pertinent CCDF materials to ensure the information meets the goals and objectives of the training. Training topics are assessed and adjusted as needed to address common issues or areas of confusion. OSSE holds brown bag training for eligibility staff to cover targeted topics based on error reporting and payment adjustment data. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: OSSE reviews findings from error reports to determine the impact of improvements incorporated into the most recent error rate review. The team prepares a summary overview of the findings and shares this information with Division of Early Learning leadership and eligibility workers as appropriate. The team incorporates the error rate action items into training and meetings with eligibility workers and management staff, including surveys to inform ongoing training. 10.1.6 Evaluate internal control activities Describe how the Lead Agency uses the following to regularly evaluate the effectiveness of Lead Agency internal control activities for all CCDF expenditures. a. Error rate review triennial report results (if applicable). Describe who this information is shared with and how the Lead Agency uses the information to evaluate the effectiveness of its internal controls: OSSE uses data and findings from the triennial error rate review to evaluate and improve the effectiveness of the agency’s internal controls. The internal project staff reviewed the findings from the last two reports to determine the impact of the improvements incorporated into the most recent error rate review. The team prepares a summary overview of the findings and shares this information with Division of Early Learning leadership and eligibility workers as appropriate. The team incorporates the error rate action items into training and meetings with eligibility workers and management staff, including surveys to evaluate the effectiveness of the updated internal controls. b. Audit results. Describe who this information is shared with and how the Lead Agency uses the information to evaluate the effectiveness of its internal controls: The Single Audit is a requirement for any non-federal entity that expends $750,000 during its fiscal year in Federal Awards. It entails an audit of both the organization’s financial statements and compliance with Federal Award requirements for those programs identified as ￿major programs￿ based on the award amount, or other high-risk factors. OSSE qualifies for this Single Audit every year. The District contracts with an auditing firm for five years at a time; the auditing firm chooses which programs to audit each year, based on General Accepted Accounting Principles. The last year CCDF was chosen was in fiscal year 2022 (FY22), for FY21 and the audit did not have any findings. c. Other. Describe who this information is shared with and how the Lead Agency uses the information to evaluate the effectiveness of its internal controls: N/A 10.1.7 Identified weaknesses in internal controls Has the Lead Agency or other entity identified any weaknesses in its internal controls? a. [x] No. If no, describe when and how it was most recently determined that there were no weaknesses in the Lead Agency’s internal controls. The District contracts with an auditing firm to conduct the Single Audit according to General Accepted Accounting Principles. CCDF was selected for inclusion in the Single Audit in FY22, for FY21. CCDF did not have any findings in that audit. OSSE reviewed the information and findings from the CCDF Monitoring Cycles 1 and 2 processes to determine which processes were flagged for non- compliance. The District did not receive any notices of non-compliance on program integrity topics. Additionally, the District recently completed ACF’s Grantee Internal Controls Self-Assessment, which did not identify areas of weakness. b. [ ] Yes. If yes, what were the indicators? How did you use the information to strengthen your internal controls?