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: The lead agency has a Policy and Program Development Unit where there is an Administrator for each of the subsidy programs. The Administrator is responsible for managing the subsidy program which includes revising, developing, and interpreting the respective policies, managing contracts, responding to stakeholder inquiries, etc. There is also a fiscal/procurement team who manages the fiscal aspects of the subsidy programs and some of there responsibilities include draw down of the funds, managing the pass through to other agencies, reporting. The lead agency has MOUs with CCDF partners that outline the responsibilities and reporting requirements. CCDF partnering agencies also submit Time and Effort reports twice a year which details the time and effort each of their team members put forth toward administration of the CCDF program. The policy unit and the fiscal unit meet on a quarterly basis to discuss status of grant spending, deadlines for obligating and liquidating funds, etc. Child care monitors are also a part of the team. Their responsibilities include monitoring provider contracts, annual site visits, verifying attendance and implementing corrective action when discrepancies are identified. Additionally the lead agency works with other state agencies to identify potential fraud risks when fraud is detected in any of our programs. 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: The Lead Agency ensures the state and department procurement policies and procedures are adhered to and sets performance standards. MOU’s are developed to establish responsibilities and reporting requirements with partnering agencies. Contracts are monitored through monthly reports requiring statistics and data. Additionally, the Lead Agency has quarterly meetings with fiscal staff to ensure that all staff involved in monitoring/administering grants and contracts are following procurement protocol. During this meeting any concerns regarding grants and contracts are discussed. 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: The lead agency utilizes contracts and MOU’s that detail budgets, and specific statements of work and how CCDF funds will be used. Spreadsheets are used to track monthly expenditures. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: State and federal reports are listed on a monthly meeting agenda as a reminder. This includes the due dates and person responsible. d. Other. Describe: 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: Fiscal management is the process of keeping the divisions spending within the limits of the funding allocations by planning, controlling and monitoring financial resources. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: The lead agency uses develops spending estimates, develops budgets, seeks formal approval of budgets, only spends funds that are authorized, implements policies and procedures, established a procurement team who manages suppliers based on formal and transparent processes, ensures audit trails by retaining all information related to financial activities and transactions to support expenditures, conducts audits and communicates spending estimates and plans to state legislatures and other stakeholders to ensure transparency. c. How the results inform implementation. Describe: The lead agency uses audit results and results of fiscal management practices to inform continuous quality improvement, to inform spending allocation or revisions to approved budgets. 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: The state does not currently have a process in place; however, the Lead Agency intends to conduct annual risk assessments of policies and procedures, based on the CCDF Fraud Toolkit, provided by the National Center on Subsidy Innovation and Accountability (NCSIA). The use of this interactive tool will assist the Lead Agency understand the impact of current policies and procedures and make improvements based on the results of the assessment. b. The frequency of each risk assessment. Describe: N/A c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: N/A d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: N/A e. Other. Describe: 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: New Staff and experienced staff participate in the Lead Agency's training academy. Staff participate in training specific to childcare policy and application. The lead agency conducts annual "Roadshows" by attending eligibility team meetings statewide to review childcare subsidy policy and address questions/ concerns. ii. Describe how staff training is evaluated for effectiveness: Trainings are evaluated for effectiveness by including interactive activities to gauge comprehension and knowledge transfer to determine ability to apply what was learned. Evaluation also includes performance measurement. Error rates are a key indicator of training effectiveness. Provider trainings are evaluated for effectiveness by including interactive activities to gauge comprehension and knowledge transfer to determine ability to apply what was learned. Evaluation also includes performance measurement. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: The lead agency uses error rate results to inform ongoing staff training needs. Monthly meetings are held with QC team who is responsible for case reviews. At these meetings, we discuss error trends. Based on the trends identified topics are chosen for Podcasts, policy briefs, roadshows, etc. 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: Licensed childcare providers who have been approved to serve children receiving funds receive an orientation from the Lead Agency. This orientation explains program requirements and integrity expectations. ii. Describe how provider training is evaluated for effectiveness: Provider trainings are evaluated for effectiveness by including interactive activities to gauge comprehension and knowledge transfer to determine ability to apply what was learned. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: Providers are monitored by the lead agency’s Child Care Monitors. If errors are identified in attendance submission, billing, etc. Providers received one on one training based on the identified error. 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: The triennial report is shared with leadership which includes the eligibility team leads. Based on the results, these team members are involved in the development of the CAP. 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: Audit reports are shared with the leadership team which includes all program administrators. Findings are reviewed and corrective action is put in place to address identified 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: A state audit indicated missing time and effort reports from CCDF administering agencies. The lead agency met with these agencies to review the findings, reporting expectations and revised the T/E reporting protocol. 10.1.7 Identified weaknesses in internal controls Has the Lead Agency or other entity identified any weaknesses in its internal controls? a. [ ] No. If no, describe when and how it was most recently determined that there were no weaknesses in the Lead Agency’s internal controls. b. [x] Yes. If yes, what were the indicators? How did you use the information to strengthen your internal controls? A state audit indicated missing time and effort reports from CCDF administering agencies. The lead agency met with these agencies to review the findings, reporting expectations and revised the T/E reporting protocol.