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

10.1. How do you ensure good fiscal accounting and tracking of funds? LIHEAP funds are tracked by the Delaware Accounting System called First State Financial Accounting System (FSF) and additionally by utilizing Microsoft Excel Spreadsheets. DHSS/DSS/OCS conducts financial and program monitoring on an annual basis with LIHEAP primary contractor. Contracts used by DHSS/DSS/OCS require that the contractor agency shall maintain complete and accurate financial/accounting records, using (GAAP) along with following LIHEAP policies and procedures. Programmatic activities are monitored regularly through reports, computer printouts and site visits to ensure contract compliance. Findings requiring corrective action are noted in a written report. LIHEAP system tracks the refund amount from each client. The non-profit sends the State the check for all the refunds it has received from the energy vendors. The check includes the back-up that is a report from the LIHEAP system that shows the allocated benefit, cost of fuel delivered and any refunds on the application. This report can only run for one vendor at a time. The funds are credited based on the coding provided by the program. Program uses the supporting documentation from the non- profit to determine the fiscal year and services to apply the credit. If we receive a credit we do not add the funds back to the purchase order, the funds are returned to the available balance of the grant. 10.1a Provide your definitions of the following: Obligation Encumbrances of funds by purchase order or contract. Funds are earmarked in the encumbrance section of the First State Financial. However, the obligation for the LIHEAP 90% statutory requirement also includes expenditures made. Additionally, the LIHEAP obligation can also mean funding the benefits in the LIHEAP system and providing energy vendors with the Notification to Vendors. Expenditures Funds that have been expensed and the First State Financial shows them as an expense. Expenditure timeframe Expenditure timeframe for obligated funds is the same as allowed by federal liquidation period for LIHEAP. State of Delaware Office of Management and Budget: Budget and Accounting Manual: Budgetary Funds 3.2: “Federal funds are not considered State monies and are subject to individual grant program rules." Administrative costs Administrative costs are specifically related to the management and operational aspects of running the program and do not include expenses associated with delivering services to clients. Any expenses that a vendor incurs in providing services, such as payments for home heating and cooling bills, energy crisis assistance, and other forms of direct assistance, including case management, intake, and outreach, are considered program costs, not administrative costs. Costs for Assurance 16 activities, including personnel costs, are not administrative and are not considered under the limits on administration. 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. The LIHEAP is audited when the single audit risk assessment has determined that LIHEAP should be audited and it was audited in 2021, 2022, 2023, 2024. Hence, it could happen that LIHEAP is not audited every year 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 other Single audit for 2025 just started and we have no results In Progress procedure/policy 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: 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: WAP is required to obtain the Single Audit for each of its contractor annually. Each contractor undergoes a complete programmatic monitoring (administrative and technical) annually that is conducted by the Grantee (DNREC) as required by the Department of Energy. 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. At least every two years the primary contractor is monitored by an internal auditor from DSS. Throughout the year file monitoring is conducted by DSS. If DNREC and other state agencies receive LIHEAP funds, they are monitored by the DSS internal auditor. For the purpose of monitoring, eligibility files will be randomly selected by using Microsoft Office Excel functions that generate random numbers between the range specified. =RANDBETWEEN(range bottom, range top), which returns a random integer number between the range specified. The range of the set will be inquired from the contractor whose files are going to be audited. The set will be created from the application numbers. The sample size will be determined according to the following criteria: a) confidence level between 90% and 95% (90 and 95 included); b) margin of error 5% and 15%. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: Local agencies are selected for monitoring based on discussions with the Fiscal Management Unit Administrator and the Fiscal Management Unit Internal Auditor. The Fiscal Internal Auditor utilizes annual risk assessments of local agencies as well as the review of program eligibility monitoring reports completed by the OCS internal auditor. We also undertake monitoring based on referrals from other local agencies. Site Visits and Desk Reviews are based on: Prior year findings, referrals, and program monitoring reports. Desk Reviews: All agencies are monitored continuously as the state receives the requests for reimbursements. Site Visits and Desk Reviews are based on: Prior year findings, risk assessment, referrals, and program monitoring reports. Portions of LIHEAP are monitored annually. The WAP is overseen by DNREC and they conduct regular monitorings of their contractors throughout the year along with the annual monitoring of the administrative and technical functions. The WAP State Program Monitor also conducts informal visits in the field to review subcontractor work quality, compliance with home energy audits, and health & safety practices. 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? 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.