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 Programmatic Monitoring Unit (PMU) is led by a manager, who manages and supervises a staff of 11 monitors, 2 of which are Team leads. The PMU manager is responsible for assigning the workload to staff engaged in conducting eligibility. The PMU Manager is responsible for the day-to-day operations of assigning, reviewing and approving all child care program integrity review activities completing reports that show findings as related to oversight, waste, and or abuse of CCDF subsidies. There are currently two teams assigned to conduct monitoring reviews. 11 staff that are divided under the leadership of 2 team leads. All initial reviews are conducted by 1st level reviews who utilizes all resources such as the CCAP eligibility system (CCMS), the CCAP payment system (HSCCMS), and other accessible State databases to determine the accuracy and correctness of an approved application/redetermination processed by the contracted agency. The team leads take on the role of second level reviewers after the review is completed by the Social Service Program Planer IIIs (1st level reviewers). The reviews are checked for accuracy and completeness by the team leads. Any discrepancies found are communicated with 1st level reviewers for corrections. All findings are shared with management; however, all improper payment errors are referred to management for a final determination. Contractors are monitored every three years, and they are reviewed against performance measures and standards as set in their contracts. The lead agency’s program monitoring, fiscal and program unit teams meet routinely to share status, flag potential concerns, discuss mitigation strategies, and enhance monitoring procedures. 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: Certificate Providers - Providers submit their billings through the Integrated Voice Response Phone System or send completed Certificate Reports to their Service Delivery Area. Providers that submit their billings through the Integrated Voice Response system are processed with the nightly cycle, so they are ensured a timely payment. All contracted providers submit their billings/expenditure reports through the appropriate Lead Agency Program Staff. These providers include Child Care Resource and Referral Agency Contracts, Quality/Discretionary Contracts and Site Administered Child Care Contracts. Each Program Area reviews the billings and approves the payments based on the type of budget that is submitted at the beginning of the fiscal year. The Child Care Program uses two types of budgets, Fixed-Rate Budgets for the Site Program and Uniform Grant Budgets for all other contracted providers. Each month a billing/expenditure report is reviewed, payment recommendation is made, and the payment is processed through the State's Accounting System. The Contract and Payment Unit makes the payments within 10 days of receipt of the approved billing. The Program areas review reports/billings monthly to ensure sound fiscal management of the funds used. In addition to the monthly reviews by Program staff, the Lead Agency's Program Integrity Unit audits each contractor on-site at least every three years. Contractors are also selected through a risk analysis (funding amounts, past audit findings, time between audits, etc.) to be audited through the Lead Agency's Office of Contract Administration. 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's staff have the Child Care Management System (CCMS) produce Monthly Enrollment Reports which indicate all cases for direct services only approved for a service month. This report serves two purposes: 1) to indicate the size of each contractor's caseload for administrative purposes, and 2) to indicate the eligible days for each approved child. Attendance is noted on this form, so the Lead Agency can monitor attendance versus eligibility and verify that payments are for authorized. The Program areas review reports/billings monthly to ensure sound fiscal management of the funds used. In addition to the monthly reviews by Program staff, the Lead Agency's Program Integrity Unit audits each contractor on-site at least every three years. Contractors are also selected through a risk analysis (funding amounts, past audit findings, time between audits, etc.) to be audited through the Lead Agency's Office of Contract Administration. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: Lead agency have designated staff that work in partnership between Programs and Operations to prepare and submit all required state and federal fiscal reporting. Reports are then reviewed for accuracy by Lead Agency director and fiscal and budget team. d. Other. Describe: NA 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: The Lead Agency defines effective fiscal management by ensuring accountability for federal assets, compliance with regulations, and the inclusion of internal controls. Appropriate reporting systems are in place, and program leadership collaborates to develop and execute a budget that reflects and supports program goals and priorities. Within IDEC, the Bureau Chief of Contracts and Payments, along with the Bureau Chief of Fiscal and Budget, monitors all expenditures of CCDF funds. IDEC provides oversight of all CCDF expenditures. Additionally, the Lead Agency handles federal reporting and other federal financial requirements. The Lead Agency maintains written agreements with all CCDF subrecipients. These agreements include standard language outlining the terms of the agreement, the scope of services, payment requirements, an independence statement, a prohibition on lobbying, a confidentiality clause, record retention requirements, audit requirements, financial reporting requirements, and a termination and debarment clause for non-compliance or violations. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: The lead agency preforms fiscal administrative reviews on a three-year cycle for all of our grantees. The grantees submit quarterly progress performance reports that outlines how the grantee completed all of their proposed grant deliverables, program measures and standards. The program staff overseeing the grants monitor these reports to ensure the grantees are completing their deliverables. Program staff meet at a minimum quarterly with all grantees to ensure they are meeting expectations of grant deliverables. c. How the results inform implementation. Describe: Lead Agency regularly assesses the risk of its policies and procedures. The Quality Assurance Unit is responsible for assessing, recommending, and revising policies and procedures. In addition, IDEC leadership meets to discuss situations in which policies and procedures were brought into question to assess whether revisions are needed. d. Other. Describe: 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 Grant Accountability and Transparency Act (GATA) provides for the development of a coordinated, non-redundant process for the provision of effective and efficient oversight of the selection and monitoring of grant recipients, ensuring quality programs and limiting fraud, waste and abuse. The Lead Agency's GATA Unit has a process in place where a Financial and Administrative Risk Assessment and a Programmatic Risk Assessment are performed. At the risk assessment process, the grantees are rated as low, medium, or high risk and based on the risk assessment; additional specific conditions could be required. At the Pre-qualification and Programmatic risk steps, a notification is sent indicating: 1) the nature of the additional requirements, 2) the reason for the additional requirements, 3) the nature of the action needed to remove the additional requirements, and 4) the method for requesting reconsideration of the additional requirements imposed. The programmatic monitoring unit (PMU) conducts two types of state level reviews. 1.) Eligibility and payment file Reviews. The eligibility review is conducted by reviewing all required documentation located in CCMS that led to the approval of families for child care subsidized assistance. Payment file reviews are conducted using HSCCMS (Payment file inquiry system). The system maintains and provides detailed information submitted by providers for monthly billing. The Lead Agency also participates in a federal audit through the ACF known as the Error Rate Review (Improper Payment Review). The CCDF methodology for measuring improper payment focuses on client's eligibility and employs a case record review process to determine whether eligibly for child care subsidy payment was properly determined, and whether any improper payments were made. This process goes through two lines of review: the Case Review Team and 2nd line reviewers (also known as Case Rereviews). The Case reviewers will conduct a desk audit of a sample size of cases. All reviews will be conducted using the ACF-403 Record Review Worksheet. The 2nd line reviewers will do random selection of cases to rereview to ensure accuracy, consistency, and communication of necessary policy or operational comparison throughout the review process. b. The frequency of each risk assessment. Describe: GATA reviews are done annually during the contract renewal process. PMU reviews are conducted on contractors on a three-year rotation. The OCC Error Rate Review is conducted every three years c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: Contractors are monitored against performance measures and standards as set in their contracts. At the beginning of each fiscal year, a program plan is submitted detailing how the services and deliverables will be accomplished including, program budget, personnel matrices and budget narrative. They are also expected to submit quarterly program plan reports, monthly expenditure reports, and quarterly program data reporting. The results of the risk assessment inform us on how we can better collaborate with grantees to ensure fidelity in program implementation. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: The lead agency requires each grantee to complete an annual Internal Control Questionnaire (ICQ) and Programmatic Risk Assessment. These questionnaires allow the lead agency to determine the level of risk associated with each grantee. The assessments are then used by both internal and external auditors during the audit process to evaluate this risk and ensure compliance with the Grant Accountability and Transparency Act (GATA). e. Other. Describe: The Programmatic Monitoring Unit (PMU) monitoring reviews of contractors will ensure that: 1) 90% of all CCAP applications and redeterminations are processed according to contract and program policy timeframes; 2) 90% of all CCAP applications and redeterminations are processed accurately; 3) 90% of all CCAP billing is submitted within 10 days of the end of the month and/or service completion; 4) Billing complies with 85% accuracy rate to eligibility for reimbursement (need for care, schedule of care, etc.) and co- payment calculation; 5) The Agency has implemented a system of ongoing staff training for current and new staff; and 6) 90% of CCAP billing complies with the procedures around the 70% rule. Billings are supported by legible attendance/sign-in sheets. 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: Internal and contracted staff working with the CCDF program are offered training by the Llead Agency that covers all policies and procedures that are relevant to their position. Lead Aagency staff develop training materials and conducts train-the-trainer sessions with contractor to ensure new staff can be onboarded properly. Trainings on specific topics are conducted monthly as well as when policies, procedures or system changes warrant. All training materials are maintained in a common location that is accessible by contracted agencies. Trainings are also conducted on areas of program operations that the OCC improper payment review identifies as having a high rate of error and on areas that have been identified as being out of CCDF compliance and can be addressed through re-training. Training topics are also determined based on the areas of policy clarifications or technical assistance requests. ii. Describe how staff training is evaluated for effectiveness: A post-training anonymous survey is sent to all participants, that allows the Lead Agency to take an objective look at the outcomes of the training ￿ making sure the goals were fulfilled, and adjustments are made for future training. A follow up training/clarification meeting with a specific agency or on a specific policy and procedure can be provided if necessary or requested. Results of PMU monitoring, payment accuracy reviews, trends in policy clarification requests and State Plan reviews results help to ensure the training material is being implemented correctly. 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 offers an informative, clarifying, and interactive webinar trainings where all participants have opportunities to engage with realistic case scenarios from the errors along with live feedback, questions and answers on the policy and the procedure related to the errors to all staff and contractors’ technical team. 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: The Lead Agency offers interactive webinar and in-person trainings on CCDF policy, procedure and system trainings to all contracted providers. Participants have opportunities to engage with realistic case scenarios along with live feedback, questions and answers to all the contractors. The contractors then train their staff on the program requirements and program integrity. The Lead Agency posts information on its website and social media platform highlighting policy changes. The contractors are required to post that information on a similar platform and in the walk-in areas available to the public. Trainings and supporting information are also provided to provider groups and community-based organizations on CCDF topics as needed or upon request. ii. Describe how provider training is evaluated for effectiveness: A post anonymous training survey is sent to all participants, so that it allows the Lead Agency’s training team to take an objective look at the outcomes of the training ￿ making sure the goals were fulfilled, and adjustments are made for future training. A follow up training/clarification meeting with a specific agency or on a specific policy and procedure can be provided if necessary or requested. Once the providers become aware of the program requirement and have any questions/concerns, they usually reach out to the contractors or the Lead Agency’s customer service team for clarifications. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: The Bureau of Program Support is provided information from the Programmatic Monitoring Unit on common errors discovered during monitoring reviews, including the error rate review results. Training webinars are conducted to retrain and clarify staff and training materials supplied to all contracted agencies performing CCAP processes. 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 Error rate review results are shared with the Lead Agency’s training staff. The results are discussed to determine a training course designed to address findings. The action plan is reviewed for the purpose of correcting or reinforcing policy and procedures. The Lead agency uses the information to determine what type of trainings should be developed. 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 results are shared with the IDEC Secretary and executive team members. The Program Bureau and the Programmatic Monitoring Unit within the lead agency along with other pertinent IDEC Leadership and stakeholders are made aware of results from internal and external audits. The information is reviewed and used to develop improvement plans to minimize the same or similar risks in the future. 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: 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? Programmatic Monitoring looks at past review findings and compares them to any current review findings through triennial reviews. If it is determined that the same findings are noted, we can communicate that information and share those findings reports with the Bureau of Subsidy Management to identify and provide needed training, and guidance. A Corrective Action Plan with measurable timelines is also put in place. As a result of these measures, the areas of risk are lessened, and the contractor is demonstrating compliance with documented policy and procedures. The number and type of programmatic monitoring review and re-review findings, across contractors, are an indication of the results of internal controls and any weaknesses identified. As you look across the timeframes between reviews as well as the changes/updates to policy/procedures, your review findings will provide a picture that illustrates whether the information is communicated timely, clearly, and effectively. Evidence of these desired results are fewer errors and findings. We review contractors on a triennial or as-needed basis. Having the staff and resources to increase the frequency of reviews, would lessen any areas of risk and aid in ensuring work stays in compliance with policy.