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 Division of Administration and Financial Management (DAFM), Policy and Program Administration Branch is responsible for fiscal oversight and monitoring of grants and contracts. (DAFM) budget staff is responsible for the compilation and submission of the biennial budget for grant programs; monthly monitoring of financial activity; budget modifications and realignments; and contract funding verification. In addition, DGA and DAFM work together to submit the ACF-696 Financial Report. This report track’s all expenditures for every funding source with the program and is submitted quarterly for each Program Period that is still open. The report is submitted within 30 days of the end of the Quarter. The Public Assistance Quality Control (PAQC) Review Branch, within the Office of the Ombudsman and Administrative Review, will conduct a monthly random sample of 23 cases. PAQC staff will conduct their reviews to ensure state eligibility staff have applied proper policy in determining eligibility and issuing the correct monthly subsidy payment. If a discrepancy is discovered, detailed information surrounding the cause of the error is sent to state eligibility staff for corrections. PAQC will issue a monthly error trend report to the Division of Child Care and Division of Family Support. This report would identify each case in error, the elements contributing to the error, if it contained an improper payment, and a summary of findings from PAQC staff. This information will be used to determine a monthly error rate percentage and to establish error trends of state eligibility staff, which may lead to additional training and/or policy revisions. The IEES online portal allows Kentucky's families access to public assistance benefits such as Supplemental Nutrition Assistance Program (SNAP), Kentucky Transitional Assistance Program (KTAP), Medicaid and Child Care Assistance Program (CCAP). The system shares and conducts a data match across eligibility programs to validate demographic details (e.g. income, address, and social security numbers of children, parents, and childcare providers). The IEES System generated reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Lead Agency staff conduct an analysis of invoices; Billing forms (DCC-97), Claims and payment; Attendance Records (DCC-94E) to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential over-payments, theft, and misappropriation of funds. Citation: Division of Child Care (DCC) / Child Care Assistance Program (CCAP) / Claims Section, KRS Chapter 45.453 Budget and Financial Administrations, The Division of Administration and Financial Management (DAFM), Policy and Program Administration Branch, DGA & DAFM- ACF-696 Financial Report, The Public Assistance Quality Control (PAQC) Review Branch, within the Office of the Ombudsman and Administrative Review, Monthly Error Trend Report, Child Care Aware Network, Services of Coaching, Technical Support, and Training all to support Program Integrity & Accountability, Office of the Inspector General (OIG) ￿ investigate fraud & pursue prosecution through the court system, Kentucky Integrated Child Care System (KICCS), and Integrated Eligibility & Enrollment System (IEES). 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 Division of Administration and Financial Management (DAFM), Policy and Program Administration Branch is responsible for fiscal oversight and monitoring of grants and contracts. DAFM administers the Personal Service Contracts (PSC's), Memorandum of Agreements (MOA's), and Memorandum of Understandings (MOU'S); development and issuance of competitive solicitations or RFP's; contract monitoring functions; coordination of federal formula and block grant applications and their electronic archiving; and review of OMB A-133 audit reports from sub recipients of federal funds. DAFM also works with the state’s Division of General Accounting (DGA) to ensure that earmark requirements, Maintenance of Effort (MOE), and State Match requirements are met. These two agencies work in a combined effort to periodically check the earmark requirements for compliance and maintain an analysis spreadsheet that tracks this information. Verifying and processing billing records to ensure timely payments to Providers. The Provider Billing Form is system generated and submitted electronically or mail by approved providers for prior month child care services. The payment section staff process provider billing payments for the prior month after the 1st day of each month, within ten (10) calendar days of receipt. Providers shall receive payment within thirty (30) working days of processing the PBF, except when there are payment discrepancies in the payment amount billed and the amount owed to the provider. If this happens, the Cabinet is not held to the thirty (30) daytime period for payment. Citation: KRS Chapter 45.453 Budget and Financial Administrations & The Division of Administration and Financial Management (DAFM), Policy and Program Administration Branch. 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: In addition, DGA and DAFM work together to submit the ACF-696 Financial Report. This report tracks all expenditures for every funding source with the program and is submitted quarterly for each Program Period that is still open. The report is submitted within 30 days of the end of the Quarter. The Division of Administration and Financial Management (DAFM) budget staff is responsible for the compilation and submission of the biennial budget for grants programs; monthly monitoring of financial activity; budget modifications and realignments; and contract funding of verification. Funds are allocated either through the state plan, executed contracts, or memorandums of agreement/understanding. Contracted funds are invoiced for reimbursement. The contract dictates what services the funds can be spent on. The invoices are submitted for payment through an email address set up specifically for this. Once received, they are distributed to the Contract Specialists that oversees that particular contract. The Contract Specialists reviews the invoice and then sends it on to program staff to review. Program staff then reviews the invoice to ensure that the services billed on the invoice are appropriate for the grant. Once program staff approves, the invoice is then sent to the Budget Specialists to review, who ensures that the funding information entered on the contract is correct. Once approved by budget staff, the contract specialists submit the invoice into an online system called KITS for payment. It goes into the work queue and then a payables employee in the Division of General Accounting (DGA) will pull the invoice and pay it based on the accounting information provided. All invoices received are reviewed in this manner. Payments for the Child Care Assistance Program (CCAP) are entered in the Kentucky Integrated Child Care System (KICCS) provider portal for payment. The CCAP Team reviews the submitted invoices through KICCS for any anomalies before approving for payment. The Division of Child Care (DCC) payment staff are responsible for the processing and review of all provider billing forms (PBF) submitted by child care provider facilities that provide care for Kentucky children receiving subsidy. PBFs are generated on the first of the month by the Kentucky Integrated Child Care System (KICCS), currently subsidy payments are retroactive and cover the prior month of care for child care providers. The PBFs are a record of the requested payment for care for each child receiving subsidy funding enrolled with the child care facility. DCC payment staff review each PBF for accuracy prior to approving or denying a payment request. At current it is possible for PBFs to be processed based on: A. Attendance: When paying based on attendance DCC payment staff must review the number of absences reported for each child, reported enrollment end dates, and any reported center closures including but not limited to illness, training, inclement weather, or vacation. Child care providers are allotted five paid absences per month per child that do not require documentation to verify the absence (KAR 922:002 160 14(3)). All other absences require written documentation if the child care facility is requesting payment. DCC payment staff must also consider the age and the care schedule of each child as well as the hours of operation for each child care facility to avoid overpayments from improperly coded PBFs. B. Enrollment: When paying based on enrollment all payments are issued following the care schedule reflected on the CCAP certificate of enrollment for each child. Exceptions to this rule apply when the care schedule does not accurately reflect the level of care needed for the child. When a certificate of enrollment is signed and processed by Family Support staff the care schedule will pre-fill on the PBF generated for the child care provider. Child absences are not expected to be recorded but child care facilities are expected to report absences that effect the entire center’s attendance such as holidays or training periods. Providers are expected to use the exceptions section to make any modifications for DCC payment staff to review prior to issuing payment. The hours of operation for child care facilities, any facility closures, and the child care schedules are still considered when paying based on enrollment, but individual absences are not. Discrepancies may occur if child care providers request payment outside of their hours of operation, if they request payment for children who have not been in attendance for 90 days or more, or if they fail to adjust the prefilled PBF for children who may have an incorrect care schedule. Discrepancies are handled by issuing a worker exception to modify the PBF submitted by the child care provider to avoid overpayment or by referring the PBF to the DCC claims section for a recoupment of funds due to an improper payment being issued. When discrepancies occur child care providers are notified by DCC staff and the child care provider is informed of the error and the next step in the review process. This process serves to minimize the issuance of funds that were improperly requested and reduce the burden of recoupment for childcare facilities. Federal Grants are set up in our accounting system using a Major Program and program code to isolate each individual FFY grant. Each grant has sub functions listed under it to track specific expenditures for earmarking. Payroll posted to the grants are reviewed monthly to ensure that the correct personnel is coding time to these grants. Citation: DGA & DAFM- ACF-696 Financial Report. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: The Public Assistance Quality Control (PAQC) Review Branch, within the Office of the Ombudsman and Administrative Review, will conduct a monthly random sample of 23 cases. PAQC staff will conduct their reviews to ensure state eligibility staff have applied proper policy in determining eligibility and issuing the correct monthly subsidy payment. If a discrepancy is discovered, detailed information surrounding the cause of the error is sent to state eligibility staff for corrections. PAQC will issue a monthly error trend report to the Division of Child Care and Division of Family Support. This report would identify each case in error, the elements contributing to the error, if it contained an improper payment, and a summary of findings from PAQC staff. This information will be used to determine a monthly error rate percentage and to establish error trends of state eligibility staff, which may lead to additional training and/or policy revisions. The Lead Agency’s, Division of Administration and Financial Management (DAFM) is responsible for the department’s financial management and budget activities through oversight, monitoring, auditing, and assuring process compliance with CCDF requirements, federal auditing procedures, and DCBS’ policies and procedures. Citation: KRS Chapter 45.453 Budget and Financial Administrations, The Division of Administration and Financial Management (DAFM), Policy and Program Administration Branch, and The Public Assistance Quality Control (PAQC) Review Branch, within the Office of the Ombudsman and Administrative Review. d. Other. Describe: N/A 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 Division of Administration and Financial Management (DAFM), Policy and Program Administration Branch work in a combined effort to periodically check the earmark requirements for compliance and maintain an analysis spreadsheet that tracks this information. Effective Fiscal Management practices include ensuring multiple levels of expenditure review by different functional areas including contract staff, program staff, budget staff, and accounting staff before payments are made. Grants are set up in the accounting system in a manner that allows them to be tracked individually. The Lead Agency's, Division of Administration and Financial Management (DAFM) is responsible for the department's financial management and budget activities through oversight, monitoring, auditing, and assuring process compliance with CCDF requirements at § 98.65(h), federal auditing procedures, and CHFS's policies and procedures. This includes routine monitoring of contracts and agreements. An audit examines, monitors, and reviews internal controls used to identify risk. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: The Division of Administration and Financial Management programs are reviewed at least once every three years by our Auditors of Public Accounts (APA) office and compliance with the effective fiscal management practices is reviewed during that audit. Citation: The Division of Administration and Financial Management (DAFM). c. How the results inform implementation. Describe: If any issues are identified during the APA audit, a corrective action plan is developed to correct those through implementation of new fiscal management practices. 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 Integrated Eligibility and Enrollment System (IEES) generated reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Child Care Payment Analysts conduct an analysis of invoices, claims and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential overpayments, theft and misappropriation of funds. Documented findings of fraud are submitted to Claims Section for processing and if over $5,000 is sent to the Office of Inspector General, Audits and Investigations, for further investigation and potential prosecution. Regular quality assurance case reviews are conducted monthly, and the lead agency is provided with a Child Care Error Trend Report that targets areas in the eligibility process that needs attention. The lead agency then uses the data provided to make policy and/or regulation clarifications or updates, system changes, and training modifications which support program integrity and accountability. The success of this effort is trackable using the error rates provided. 2023-2024. Fiscal year had 3.88% error rate, which is down from the 2022-2023 fiscal year that carried a 13% error rate. The Lead Agency shares in an eligibility system that conducts a data match across eligibility programs to validate demographic details (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. The Claim’s Section receives documented findings and reviews for potential processing of Claim establishment. The IEES system generates reports access data to validate and report any inconsistencies. The Provider and Applicant Validation analyzes the employee master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Child Care Payment Analyst conduct an analysis of invoices; Billing forms (DCC-97), Claims and payment; Child Care Daily Attendance Records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential overpayments, theft and misappropriation of funds. Office of Inspector General (OIG) investigates further fraudulent activities of over $5,000 (Applicants) and $10,000 (Child Care Providers) for potential prosecution. Each of these activities assists in the identification and prevention of fraud and IPVs through: data matches on demographic elements (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. The Provider and Applicant Validation analyzes the employee master file and vendor master file help to identify duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. Child Care payment analysis helps to conduct an analysis of billing invoices and attendance records. Inadvertent Error (IE) occurs when there is a misunderstanding or an unintended error by the recipient causing a Claim. Activities include but are not limited to: Child Care Payment analysis of invoices; Billing forms (DCC-97), Claims and payment; Child Care Daily Attendance Records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential overpayments, theft and misappropriation of funds. Above activities assists in identification of Intentional Program Violations (IPV), IPVs ordered by the court, and Suspected Intentional Program Violations (SIPV), Agency Error (AE), and Inadvertent Household Error (IHE). The Agency utilizes the data match system and the 100% attendance report to flag attendance anomalies with Child Care Providers that may lead to IE, duplicate payments, overpayments or other potential fraudulent activities. These systems allow us to identify agency errors and utilize systematic measures to prevent agency errors. b. The frequency of each risk assessment. Describe: Risk assessments are conducted monthly on a random sampling of 100% attendance reported. Assessments are also completed on a case-by-case basis. These are some of the mechanisms used to identify inconsistencies: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, 100% Attendance Report, Hotline Referrals from OIG, & Regulation. Citation: 922 KAR 2:020; 922KAR 2:160 c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: Kentucky has a one-case concept, and the Integrated Eligibility and Enrollment System (IEES) conducts a data match across eligibility programs to validate demographic details (e.g. income, addresses and social security numbers) of children, parents, and childcare providers. The system then generates reports that validate and report any inconsistencies in case information which could impact factors pertaining to CCAP eligibility. The Lead Agency uses the following mechanisms to identify inconsistencies: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, 100% Attendance Report, and 10th of the month Report. The Integrated Eligibility & Enrollment System (IEES) allows on-line portal access to Kentucky’s families. The system shares and conducts data matches across eligibility programs to validate demographics details (e.g., income, address, and social security numbers). IEES generates reports to access data to validate and report any inconsistencies. The Provider and Applicants validation analyzes the employer master file and vendor master file for duplication or records, unusual relationships, potential conflicts of interests between vendors and employees and other anomalies. The Kentucky Integrated Child Care System (KICCS), the child care payment analysis conducts an analysis of billings invoices, claims, and payment records to identify trends and anomalies resulting in unauthorized disbursements, duplicate payments, potential overpayments, theft, and misappropriation of funds. Reviewing all these, will result in any risk assessments to improve the programs. The Lead Agency staff use all of these mechanisms to identify areas of potential risk. Once risks are identified, we make necessary amendments to administrative regulations, policies, IEES, KICCS, training materials, technical assistance materials (tip sheets/guidance documents). d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: Based on evaluation of the above listed mechanisms, Lead Agency staff identified areas in which providers needed technical assistance. Claims staff began delivering individual technical assistance to child care providers in March 2023. During that year, 173 overpayments were identified; 513 coaching/mentoring sessions were provided; and 286 claims were established. From January 2024 through August 2024, 90 overpayments have been identified, 381 coaching/mentoring sessions have been provided; and no Claims have been established. Regular quality assurance case reviews are conducted monthly, and the lead agency is provided with a Child Care Error Trend Report that targets areas in the eligibility process that needs attention. The lead agency then uses the data provided to make policy and/or regulation clarifications or updates, system changes, and training modifications which support program integrity and accountability. The success of this effort is trackable using the error rates provided. 2023-2024. Fiscal year had 3.88% error rate, which is down from the 2022-2023 fiscal year that carried a 13% error rate. Citation: Child Care Claims Procedures Manual, Administrative Hearings for Claims Appeals. Policy Manual, MS 6050 IPV Disqualification Penalties. 922 KAR 2:020. Child Care Assistance Program (CCAP) improper payments, claims, and penalties. e. Other. Describe: N/A- no other ways of identifying risks 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: There is CCAP Training for new eligibility staff. Upon hire Staff are considered non-case decision workers that must have all of their casework evaluated by a senior worker. Work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are also regular policy and training meetings to review error trends and discuss ways to improve training materials for effectiveness. CCAP staff use the Claims Policy and Procedure Manual as one of the tools for internal training and knowledge base of processes. There is also a CCAP refresher course. The Department of Administration and Financial Management (DAFM) is responsible for contract monitoring functions including monthly monitoring of financial activity; budget modifications and realignments; and contract funding verification. Contract and Budget staff are required to complete procurement, budget, and grant training. Division of Child Care (DCC) /Child Care Assistance Program (CCAP) Claims Reference Guide and annual Provider Billing Training are used to inform staff of program requirements and integrity. ii. Describe how staff training is evaluated for effectiveness: New eligibility staff are required to complete CCAP Training on internal processes. These eligibility staff are considered non-case decision workers that must have all of their casework evaluated by a senior worker. Work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are also regular policy and training meetings to review error trends and discussion ways to improve training materials for effectiveness. All staff use the Claims Policy and Procedure Manual for internal training and processes. The Quality Control reports are evaluated. The work of case decision workers is evaluated monthly through a quality control review process for accuracy. There are regular policy and training meetings to review error trends and discussion of ways to improve training materials for effectiveness. Citation: DCC-94E, Child Care Daily Attendance Record, DCC-97, Provider Billing Form, 100% Attendance Report, annual Provider Billing Training, and 10th of the month Report. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: DCBS Policy Staff conducts policy panels to train staff and support program integrity and accountability. Child Care Aware Network of Services Coaches conduct follow-ups with Providers around best practices of Technical Assistance and Training to support program integrity and accountability. All staff use the Claims Policy and Procedure Manual for internal training and processes. The Lead Agency meets with the training department quarterly to discuss data gathered from the Error Trend Reports, to discuss areas that need to be added or clarified upon in not only the initial CCAP training, but also a refresher course that more seasoned workers are able to take. This is also a time that upcoming policy and system changes can be outlined to ensure front-line field staff get the most current information. This information is also used to create ￿micro trainings" that target specific areas of concern. These short trainings can be assigned to workers that need specialized attention in a specific area, such as calculating income or child care enrollments. 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 Child Care Aware of Kentucky staff serves to coach providers and conducts follow-up TA and training to support program integrity and accountability in proper attendance procedures. The CCAP Claim’s staff reviews data and reports (e.g., 100% Attendance Report and 10th of the month report) to determine areas of concern and then uses the gathered information to support providers with ￿one on one￿ coaching so they can correctly complete daily attendance records and bill accurately, to prevent future claims. Providers receiving CCDF funding are also required to take an annual ￿Billing Basics￿ training. Provider feedback and CCAP Policy is then used to update the training yearly and serves as an instruction tool that covers everything related to the CCAP billing process. Providers are also sent policy updates through Listserv, the portal ￿Splash￿ page and they are also invited to attend regular Town Hall meetings which address key ￿hot topics￿. Child Care Providers receiving CCDF funding are required to take an annual Billing Basics training. Provider feedback and CCAP Policy is then used to update the training yearly and serves as an instructional tool that covers everything related to the CCAP billing process. Providers are sent policy updates through ListServ, the portal Splash page and they are also invited to attend regular Town Hall meetings which address key hot topics. The Lead Agency gives the CCAP Providers the tools necessary to inform them of the CCAP requirements and program integrity. The information will present on reports, provider feedback, and Town Hall meetings if they are accurately informed and delivering program integrity. The CCAP Payment section has furnished all CCAP Providers with, Provider Training Guides, billing information, ListServ e-mails, information on the portal Splash page and Town Hall meetings to fulfill the training requirement for KY providers to know payments are based on enrollment rather than attendance. Citation: 922 KAR 2:160, Annual Provider Billing Training and DCBS Policy Training for staff. ii. Describe how provider training is evaluated for effectiveness: Citation: 100% Attendance Report, annual Provider Billing Training, and 10th of the month Report. The Claims’ section is providing coaching to all approved CCAP Providers to assist them with their billing, correct billing codes, and attendance records requirements. The CCAP Claim’s staff reviews data and reports (e.g., 100% Attendance Report, 10th of the month report, and fraud reports from OIG/DRCC hotline) to determine areas of concern and then uses the gathered information to support providers with one-on-one coaching so they can correctly complete daily attendance records and bill accurately, to prevent future claims. DCC has a dashboard through the IEES system that allows for monthly claim reports (e.g., pending claims, discrepancies past due, child care collections, terminated and compromised claims, court claims and child care claims paid in full). Providers are able to give feedback when completing the annual ￿Billing Basics￿ training, which is used to clarify information or address areas in which providers are struggling. CCAP providers are also able to directly reach out to the CCAP Billing team with questions regarding capturing attendance, billing codes, billing issues, etc. These questions can then be used to identify problematic areas that need to be addressed in trainings. All staff use the Claims Policy and Procedure Manual as one of the tools for internal training and knowledge base of processes. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: Program Integrity data that is received from the 100% Attendance Report and the 10th of the month report can be used to catch error trends. This data opens the way for a ￿one on one￿ coaching session with providers and provides content that can be added to annual trainings and regular Town Hall meetings. 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 Public Assistance Quality Control (PAQC) Review Branch, within the Office of the Ombudsman and Administrative Review, will conduct a monthly random sample of 15 Positive cases and 5 Negative cases. Positive cases are those in which a subsidy payment was issued for the sample month. Negative cases are those in which a denial/discontinuance of services was issued for the sample month. PAQC staff will conduct their reviews to ensure state eligibility staff have applied proper policy in determining eligibility and issuing the correct monthly subsidy payment. If a discrepancy is discovered, detailed information surrounding the cause of the error is sent to state eligibility staff for corrections. PAQC will issue a monthly error trend report to the Division of Child Care and Division of Family Support. This report will identify each case in error, the elements contributing to the error, if it contained an improper payment, and a brief summary of findings from PAQC staff. This information will be used to determine a monthly error rate percentage and to establish error trends of state eligibility staff, which may lead to additional training and/or policy revisions. 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 Auditor of Public Accounts (APA) conducts yearly audits of the Lead Agency. The APA reviews existing regulations, policies, and case records to determine if the Lead Agency is following all required guidelines. If areas of improvement are identified, the Lead Agency must create an action plan to become compliant. 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- no additional information about evaluation of internal control activities to add in this section. 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? The DCC Claims team identified a weakness in an internal control. An identified trend was providers not making payments on delinquent claims. CCAP subsidy payments were still being made to providers, even though their claims status was delinquent. To close the gap between the Claims team and Billing team, the Division made internal system changes that literally ￿flagged￿ each delinquent provider and ￿paused￿ their subsidy payment until their claim could be reviewed by the Claims team. Once a determination is made, the Billing team releases the payment if applicable. This simple system change has decreased the number of delinquent claims as a whole. Additionally, through case reviews and staff trainings, internal weaknesses have been identified. The primary indicator identified as a weakness through case review is case calculation error (i.e., earned income, unearned income, and payment calculation errors). As a measure of strengthening internal controls, policy panels are scheduled to discuss internal weaknesses and newly incorporated policies and procedures. Staff also use the Child Care Assistance Program Policy Manual, Claims Policy and Procedure Manual for internal training and processes. Additionally, there are regular policy and training meetings to review error trends and ways to improve training materials for effectiveness. These measures help to ensure the integrity of CCDF funds and practices.