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

10.1. How do you ensure good fiscal accounting and tracking of funds? Kentucky Housing Corporation (KHC) receives an audit of their Weatherization Assistance Program (including LIHEAP funded Weatherization) as part of the Statewide Audit of the Commonwealth, performed by Kentucky's Auditor of Public Accounts. DCBS reviews the statewide audit for any findings related to the program. Program Monitoring: CAK will monitor the local Community Action Agency's LIHEAP program at least once during the program year to ensure the appropriate delivery of services and documentation of case actions and billings. Monitoring reports will be completed for each agency and will include a summary of program and financial performance. A description of any corrective action to be taken will be included, if necessary. CAK will send reports to DCBS Program Specialist for LIHEAP to review and approve before mailing to agency. CAK will follow up on all correction plans and report resolutions to DCBS for approval. DCBS has engaged the CHFS Office of Inspector General to perform quality reviews of CAK and all Kentucky Community Action Agencies audit reports. DCBS, Division of Administration and Financial Management (DAFM), Contract Performance Branch, will monitor CAK during the year to assure that the operation of the program is in compliance with all contract requirements and federal statutes. Kentucky Housing Corporation (KHC) receives an audit of their Weatherization Assistance Program (including LIHEAP funded Weatherization) as part of the Statewide Audit of the Commonwealth, performed by Kentucky's Auditor of Public Accounts. DCBS reviews the statewide audit for any findings related to the program. KHC will monitor the local Community Action Agencies weatherization programs at least once during the program year. The purpose of the monitoring is to assess program compliance with the Kentucky Weatherization Assistance Program (KWAP) requirements. Monitoring reports completed for each CAA will include a description of concerns, observations or findings, which will require a corrective action plan. A copy of each monitoring report, including corrective action plans will be provided to DCBS for review. See the attached monitoring tool and checklist utilized by KHC. The DAFM Contract Performance Section monitors DCBS contractors for compliance review and approval with contractual provisions and federal/state laws. The Contract Performance Section prioritizes the annual monitoring of all contractors whose funding total require the contractor to undergo an annual audit performed in accordance with 2 CFR, Part 200 Subpart F. All DCBS contractors receive an on-site monitoring no less than once every three years or are monitored more frequently upon request of DCBS program staff. Fiscal Monitoring: Methods and procedures are in place for properly charging the costs of administration under the plan and are maintained in accordance with Federal requirements as specified in 45 CFR 205.150 and 45 CFR Part 95 Subpart E, including identifying costs applicable to each of the separate federal programs. Revisions in such methods and procedures are submitted by CHFS on a timely basis for approval by the Department of Health and Human Services. Procedures for determining reasonableness, allowability and allocability of costs are in accordance with provision P.L 97-35, as amended, 45 CFR Parts 75 and 96 as applicable, 2 CFR Part 200 Subpart E and federal agency implementing agencies as applicable and applicable state laws. These requirements are applicable to subcontractors who will be required to report to CAK in a manner that meets CAK"s reporting requirements to the Cabinet. The DFS LIHEAP Public Assistance Program Specialist (PAPS) participates on-site reviews with a minimum of 20% of annual reviews. The PAPS also reviews a copy of each monitoring report and approves prior to CAK notifying the local agency. All CAAs receive an on-site monitoring no less than once every three years or are monitored more frequently upon request of DCBS program staff. DCBS tracks LIHEAP expenditures through a daily report emailed to DFS and DAFM. The report includes the following details per local CAA: Total Allocation, Expenditures, percentage of allocation spent, remaining benefits, anticipated days left of funds to be available, date running out, number of applications, and number of households approved. 10.1a Provide your definitions of the following: Obligation A binding agreement that will result in outlays, immediately or in the future. This can either be in the form of a contract, memorandum of agreement, memorandum of understanding, or in a state plan. Budgetary resources must be available before obligations can be incurred legally. (see Section 20.5) OMB Circular No. A-11 (2021) page 8 of section 20. Funds are considered obligated when they are place in contracts or contract modifications. Expenditures The disbursement of funds in contracts or funds obligated in a state plan to pay for services incurred. Expenditure timeframe Expenditure timeframe references the time period in which expenditures are posted and which grant period they align. Administrative costs Any expenditure for governmental functions normally associated with administration of a public assistance program must be included in determining administrive costs subject to the statutory limitation on administrative costs, regardless of whether the expenditure is incurred by State, a subrecipient, a grantee, or a contractor of the state. 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. A single audit is required for non-federal entities that expends more than $750K or more in Federal funds during the fiscal year. The audit is performed by a public auditing firm, per the contract the agency sends the audit engagement letter to Community Action Kentucky and Cabinet for Health and Family Services. This is to ensure the agency has engaged with a public firm to perform the audit. Then a copy of the audit when it is completed. It must be completed annually. The Schedule of Expenditures of Federal Awards (SEFA) is a part of the audit. 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 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: DCBS monitors invoices monthly and reconciles against the daily scheduled report. 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: 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. CAK monitors the local Community Action Agencies which operate LIHEAP at least once during the program year to ensure the appropriate delivery of services and documentation of case actions for each monitoring visit. This will include a description of corrective actions to be taken. By contractual agreement, CAK will follow up on all corrective action plans and report the resolution to DCBS. DCBS reviews findings and has final approval of resolution. Please see the attached monitoring tool. Schedule is pending. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: The monitoring schedule is developed with CAK to visit all sites each year. All reviews will be conducted on-site. This is to ensure every agency is following the same procedures across the state. Desk Reviews: Desk reviews are now the exception and will be used sparingly should the agency be affected by extreme weather as was the case when Kentucky experienced the devestating tornados and flooding. 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Annually 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.