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 separation of duties between fiscal and program staff is critical to effective control because it reduces the risk of both erroneous and inappropriate actions. Separation of duties implements checks and balances that help prevent issues that can negatively affect the CCDF program. Issues relating to budget and fiscal management are communicated through monthly meetings between fiscal and program staff and ongoing communications on program guidelines. Eliminating waste, fraud, and abuse of the program is very important to the Lead Agency, and the agency has put in place processes and procedures to manage the program and minimize the risk of waste, fraud, and abuse. The Lead Agency has an Internal Audit team that helps to identify and address risk. The CCAP team also works closely with state auditors on a recurring basis to review all aspects of the program and to identify possible weaknesses. The Child Care Assistance Program Fraud Management Unit (FMU) was developed to reduce the risk of, identify, and investigate fraud. Clients (families), child care providers, and stakeholders, both internal and external, have access to the FMU to report any suspected fraudulent CCAP activity. FMU investigates all referred fraudulent circumstances as well as suspected fraud based on review of CCAP data. FMU staff review past and current activities of the providers and participants according to current CCAP policies. These audits may include review of time and attendance records, payment records, eligibility documentation, and eligibility determination. FMU staff document information of the monitoring, including discrepancies. Information from these circumstances is then used to determine what additional procedures might be needed to further deter fraudulent activity. In regard to Child Care Assistance Program payments, the Lead Agency utilizes a weekly statewide authorization file for payments to providers based on enrolled children. This automated process utilizes active authorizations for each eligible child to calculate the weekly payments that are made to the provider two weeks after services have been provided. Utilization of authorizations are monitored through the KinderConnect attendance tracking system to ensure that payments are being issued for services authorized. Even as the leaders at each level work together and serve as a resource for one another, the Lead Agency separates duties to help ensure integrity. For example, the Child Care Assistance Program (CCAP) team has separate program units conducting the determination of eligibility and issuing payments. Each unit also performs internal section reviews. On the eligibility team, case readings are completed by supervisory staff and program specialists. Social service analyst supervisors conduct quarterly random case readings per analyst and program specialists. These random case readings can take place when a case is questioned by an external source. In addition, the supervisor conducts formal case readings per quarter on analysts’ cases. On the payments team, the program and quality specialists continue to run mock 403 reviews with the Record Review Worksheet (RRW) during non-federal review years, as a continued audit of payments, to prevent payment errors. This ongoing identification of possible payment errors consequently provides analysts with individualized training on payment errors. Each analyst has a payment error rate that is tracked by supervisors and management and encompasses both payment and administrative errors. In regard to quality and infant/toddler programs, program staff oversee all contracts and review deliverables before payment can be made. All flowthrough funds are distributed through a system whereby the recipient must sign assurances that they will adhere to the allowable uses; they must also submit a budget, and Lead Agency staff review the budget and provide feedback and approval. All expenses must be entered into a workflow system where the Director of Early Childhood Finance approves the spend and the assigned budget analyst from the Lead Agency finance office confirms and approves the funding and coding prior to the purchase. At that time, the validity and the cost of the purchase as well as the allowability is considered. 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: Program staff oversee all contracts and review deliverables before payment can be made. All flowthrough funds are distributed through a system whereby the recipient must sign assurances that they will adhere to the allowable uses, as a preventive control; the recipient must also submit a budget, and Lead Agency staff review the budget and provide feedback and approval. This review encourages proper use of funds prior to release of funds. In regard to Child Care Assistance Program payments, the Lead Agency utilizes a weekly statewide authorization file for payments to providers based on enrolled children. This automated process utilizes active authorizations for each eligible child to calculate the weekly payments that are made to the provider two weeks after services have been provided. Utilization of authorizations are monitored through the KinderConnect attendance tracking system to ensure that payments are being issued for services authorized. 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: All expenses must be entered into a workflow system where the Director of Early Childhood Finance approves the spend and the coding prior to the purchase. At that time, the validity and the cost of the purchase as well as the allowability is considered. In regard to Child Care Assistance Program payments, program and quality specialists continue to run 403 reviews with the Record Review Worksheet (RRW) during non-federal review years, as a continued audit of payments, to prevent payment errors. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: The financial reporting staff of the agency is required to electronically submit the ACF-696 report 30 days after the end of each quarter. The agency uses its financial management system to track obligations and expenditures to ensure compliance and accuracy of the report. d. Other. Describe: The agency has a financial management system that tracks the budget, obligation, and expenditures. There are ongoing communications between fiscal and program staff regarding grant requirements, planning, and spend-down of funds. 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 practice as the standard operating procedures designed to improve the proper execution of financial accounting, reporting, and budgeting. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: Fiscal management practices are tracked and measured by the ability to spend funding in accordance with grant guidelines on allowable expenses within the grant available period. c. How the results inform implementation. Describe: The fiscal management results inform implementation through the ability to adequately plan and implement initiatives that can be accomplished through the grant availability period. 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 Lead Agency Bureau of Internal Audit (BIA) annually conducts a Lead Agency-wide Risk Assessment in accordance with the Louisiana State Internal Audit Law and Professional Standard of the Institute of Internal Auditors. In addition, the CCAP Fraud Management Unit conducts various audits and reviews utilizing attendance logs, billing records, reports. payment files, and case records. The time and attendance audits determine whether a participant and/or provider are in compliance with CCAP policies, procedures, and regulations. The Lead Agency reviews excessive back scanning and discrepancy in attendance logs comparable to the attendance tracking system. CCAP cases are audited based on referrals, reports, requests, and at random by the FMU. b. The frequency of each risk assessment. Describe: The Lead Agency’s Bureau of Internal Audit Risk Assessment is conducted annually. The Fraud Management Unit (FMU) conducts reviews on a monthly or quarterly basis depending on the type of review. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: The Risk Assessment is used by the Lead Agency’s Bureau of Internal Audit (BIA) as the basis for implementing the BIA annual audit plan. The FMU identifies trends for assessment of the system, training needed for staff, and technical assistance needed for providers. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: The Annual Risk Assessment and all other audit projects conducted by the Lead Agency’s BIA are reported to the Louisiana State Board of Elementary and Secondary Education, the State Superintendent of Education, the Louisiana Legislative Auditor, and all other appropriate State and Federal officials, as necessary or required by law. The FMU works directly with outside entities, when contract funding allows, for audit and risk assessment of the effectiveness of the processes and controls in place. 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: CCAP staff receive annual training on program policies and procedures. Staff also receive additional ongoing individual and/or team training based on trending occurrences. The Lead Agency has regular internal meetings with staff to review the program, consider any modifications, and continuously make improvements. The Lead Agency’s Licensing staff receive supervised training for up to 3 months once hired. A mid-point review is conducted 3 months after hire to determine whether the staff is ready to work unsupervised. Then a final review is conducted at the 6-month mark. If determined to work individually, the staff will receive continuous weekly internal meetings with the direct Supervisor, then monthly internal meetings led by the Program Managers with all Licensing staff. There is additional internal training conducted annually. The Lead Agency’s Child Care Criminal Background Check staff receive supervised training for up to a month once hired. When determined to be ready to work individually, the newly-hired staff member then continues to receive weekly internal training with all staff. Additionally, new hires’ CCCBC System permissions are set and monitored by the CCCBC Program Manager for alterations on a monthly basis, until a CCCBC team member is promoted to a Program Specialist position. New hires cannot issue final determinations for CCCBC applications with given system permissions. The Lead Agency’s Strategy team receives weekly support from the early childhood finance team members regarding administration of contracts and allocations for quality and infant/toddler programs. ii. Describe how staff training is evaluated for effectiveness: The Lead Agency’s CCAP staff trainings are evaluated for effectiveness through staff feedback and surveys following the given training. The individual staff error rates, the agency overall error rate, and individual quality reviews help to identify possible areas of improvement and further needed training. Also, provider inquiries in the help desk portal and responses from the CCAP team are reviewed for accuracy and effectiveness. In the event the Program Manager identifies recurring errors, staff training is re-evaluated and adjusted to be more effective. The Lead Agency’s Licensing staff training is evaluated for effectiveness through weekly quality reviews of their work. The quality reviews consist of the Internal Program Manager and Director reviewing the processing of initial, renewal, and change request applications to ensure accuracy and timeliness. The Field Program Manager and Director review monitoring inspections of sites to ensure accuracy and clear and concise description of deficiencies, if applicable. The Internal Program Manager and Director review the intake of complaints and incidents to ensure accuracy of information received and timeliness. The Internal Program Manager and Director review responses to providers to ensure accuracy of information, and these internal quality reviews help with determining further staff training needs. In the event the Program Manager identifies recurring errors, staff training is re-evaluated and adjusted to be more effective. The Lead Agency’s Child Care Criminal Background Check staff receive monthly quality reviews of their work to include application processing, verbal responses to providers, and written responses to providers, to evaluate effectiveness of training received. In the event the Program Manager identifies recurring errors, staff training is re-evaluated and adjusted to be more effective. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: CCAP staff receive annual training on all program policies and procedures. In addition, staff receive additional ongoing individual and/or team training based on trending occurrences. Louisiana follows a system of tracking individual staff errors and incoming complaints. This helps to tailor training to individual staff needs and to plan both large and small group training on all topics and areas of need. 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: Providers receive training that guides program integrity during monthly early childhood webinars, other provider training during the year, technical assistance as needed, and updates and reminders via the early childhood newsletter. In addition, the Licensing Team offers to CCDF and non-CCDF providers a new provider orientation on licensing rules and regulations for owners and directors prior to issuing a license to operate. Also, there is an initial inspection prior to issuing a license to operate that is completed with the new provider, where regulations and requirements are discussed. In addition, the CCCBC team offers two annual webinar trainings to provide technical assistance and to share updates and reminders. The CCCBC team presents at various meetings, and team members are available for individual questions as needed by the provider. The CCCBC team provides prompt response to questions when asked via email and phone communication. ii. Describe how provider training is evaluated for effectiveness: The Lead Agency’s Child Care Assistance Program team provides an open loop during trainings in which providers can ask questions as the webinar or in-person training is being conducted. Staff monitor this loop and provide feedback and answers to questions. Staff make further, follow-up contact with providers when needed, for more detailed responses or individual situations. Questions asked during these training opportunities are used to direct future training and provide on-going clarity and resources. The administration also collaborates with other outside agencies that work directly with providers and families in the field to determine the effectiveness of messaging, training, and resources. Providers can also send e- mails directly to management, and the level of understanding and clarity reflected in these e-mails is also used as an internal measurement of existing training effectiveness and a tool for identifying concerns and additional training needs. After the new provider orientation is completed with the Lead Agency’s Licensing team, an assessment is given to participants to evaluate effectiveness of the training. If the new provider answers more than 4 of the assessment questions incorrectly, an on-site visit is scheduled with the provider. Monitoring inspections are also conducted to evaluate effectiveness The Lead Agency’s Child Care Criminal Background Check Section provides a segment after a webinar or training where providers can ask questions. Questions asked by providers are used to measure effectiveness. Concerns are utilized to evaluate future training. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: As described above, the Lead Agency uses information received as an on-going assessment to identify risk areas or areas of external concern. As questions are answered in the Provider Help Desk Ticket system, data is gathered on the inquiry and used as a tool to inform future decisions, identify areas of concern, monitor error and program effectiveness, and also identify risk. The Lead Agency’s CCCBC Section uses information received as an on-going assessment to identify risk areas. Trainings are provided according to areas of concern. The Lead Agency’s Licensing section uses information from monitoring inspections, on-site technical assistance visits, and provider orientation training to inform ongoing provider training needs. 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: Members of the Lead Agency’s Early Childhood team (including the Child Care Assistance Program leaders and the Early Childhood executive team members) review the triennial report and determine what processes or policies could be changed or put in place to improve the Lead Agency’s error rate. Information about the triennial review is also shared with all members of the CCAP payments and internal training team. Program managers use this information in vision forward planning to identify risk and in the formation and revision of internal policy and procedures. 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 Lead Agency CCDF team members and leaders, including the Early Childhood executive team members, and with the Lead Agency executive team, including the State Superintendent of Education. Audit results are used as a planning tool for training and as a tool for monitoring and strengthening internal controls. 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: The Lead Agency conducts attendance and billing reviews, record matching and database linkage, random sampling, process monitoring, and compliance resources. Information found in these reviews is discussed by program management during vision forward meetings and is used to guide planning, implement needed changes, and identify and assess areas of potential concerns. 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? Indicators of weak or nonexistent internal controls were identified as a result of the audit procedures and testing conducted by the Bureau of Internal Audit and reported to the Superintendent of Education & Board of Elementary & Secondary Education in accordance with regulatory guidance. Specifically, the ability for management override of specific information in the data system, with limited oversight of changes, was identified as an indicator of weakness in internal controls. In response the Lead Agency has built in new and additional internal controls to remove the weakness in this identified area.