10.2 Fraud Investigation, Payment Recovery, and Sanctions

Lead Agencies must have the necessary controls to identify fraud and other program violations to ensure program integrity. Program violations can include both intentional and unintentional client and/or provider violations, as defined by the Lead Agency. These violations and errors, identified through the error-rate review process and other review processes, may result in payment or nonpayment (administrative) errors and may or may not be the result of fraud, based on the Lead Agency definition. 10.2.1 Strategies used to identify and prevent program violations Check the activities the Lead Agency employs to ensure program integrity, and for each checked activity, identify what type of program violations the activity addresses, describe the activity and the results of these activities based on the most recent analysis. a. [ ] Share/match data from other programs (e.g., TANF program, Child and Adult Care Food Program, Food and Nutrition Service (FNS), Medicaid) or other databases (e.g., State Directory of New Hires, Social Security Administration, Public Assistance Reporting Information System (PARIS)). i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: ii. [ ] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice:: b. [x] Run system reports that flag errors (include types). i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: EEC audit staff utilize the following reports to aid in identifying intentional and unintentional program violations: over enrollment report, attendance reports, billing extract reports, and secondary approver reports. If a violation is found, the child care financial assistance (CCFA) audit log report is used to find the affected client record, the type of record, the action taken, the date the action was taken, and user id of the individual that took the action. The record types included in the report are person, placements, attendance, and eligibility. CCFA requires subsidy administrators to state the reason for making an adjustment to each record, which helps with reviews conducted by the EEC Audit Unit. These types of reviews are denoted as a special reviews and a determination is made as to the type of error i.e., non-payment, improper payment, or substantiated fraud. In FY23 the Audit Unit was assigned twelve special reviews. None of these reviews resulted in an intentional program violation. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: EEC audit staff utilize the following reports to aid in identifying intentional and unintentional program violations: over enrollment report, attendance reports, billing extract reports, and secondary approver reports. If a violation is found, the child care financial assistance (CCFA) audit log report is used to find the affected client record, the type of record, the action taken, the date the action was taken, and user id of the individual that took the action. The record types included in the report are person, placements, attendance, and eligibility. CCFA requires subsidy administrators to state the reason for making an adjustment to each record, which helps with reviews conducted by the EEC Audit Unit. As a result of these activities, EEC has updated the procedure manual to clarify guidance on using the CCFA system, informing better practices for internal and external teams regarding the use of flag reports to identify issues. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: EEC audit staff utilize the following reports to aid in identifying intentional and unintentional program violations related to agency errors: over enrollment report, attendance reports, billing extract reports, and secondary approver reports. If a violation is found, the child care financial assistance (CCFA) audit log report is used to find the affected client record, the type of record, the action taken, the date the action was taken, and user id of the individual that took the action. The record types included in the report are person, placements, attendance, and eligibility. CCFA requires subsidy administrators to state the reason for making an adjustment to each record, which helps with reviews conducted by the EEC Audit Unit. As a result of these activities, EEC has updated the procedure manual to clarify guidance on using the CCFA system, informing better practices for internal and external teams regarding the use of flag reports to identify issues. c. [x] Review enrollment documents and attendance or billing records. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: EEC's Audit Compliance and Resolution (ACR) Unit engages in risk assessment analysis, on-site monitoring, review of attendance records, review of billing records, and provides technical assistance through corrective action plans. EEC has adopted the Record Review Worksheet established by the Administration for Children and Families (ACF) as a result of Improper Payments Elimination and Recovery Act of 2010 (IPERIA). The worksheet was designed to identify improper authorizations which ACF believes are the source for improper payments. As part of the eligibility review, the fiscal monitors also interview staff, verify that both client and related provider files are organized, ensure accurate billings are submitted to EEC for payment, and review compliance with EEC’s Financial Assistance Policy Guide. In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. No Intentional Program Violations were discovered during these reviews. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: EEC's Audit Compliance and Resolution (ACR) Unit engages in risk assessment analysis, on-site monitoring, review of attendance records, review of billing records, and provides technical assistance through corrective action plans. EEC has adopted the Record Review Worksheet established by the Administration for Children and Families (ACF) as a result of Improper Payments Elimination and Recovery Act of 2010 (IPERIA). The worksheet was designed to identify improper authorizations which ACF believes are the source for improper payments. As part of the eligibility review, the fiscal monitors also interview staff, verify that both client and related provider files are organized, ensure accurate billings are submitted to EEC for payment, and review compliance with EEC’s Financial Assistance Policy Guide. In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. No Unintentional Program Violations were discovered during these reviews. As a result of these activities, EEC has updated the procedure manual to clarify guidance on using the CCFA system, informing better practices for documenting enrollment, processing billing, recording attendance, and determining eligibility. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: EEC's Audit Compliance and Resolution (ACR) Unit engages in risk assessment analysis, on-site monitoring, review of attendance records, review of billing records, and provides technical assistance through corrective action plans. EEC has adopted the Record Review Worksheet established by the Administration for Children and Families (ACF) as a result of the Improper Payments Elimination and Recovery Act of 2010 (IPERIA). The worksheet was designed to identify improper authorizations which ACF believes are the source for improper payments. As part of the eligibility review, the fiscal monitors also interview staff, verify that both client and related provider files are organized, ensure accurate billings are submitted to EEC for payment, and review compliance with EEC’s Financial Assistance Policy Guide. In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing: 23 agency errors were discovered during these reviews. The Monitoring Review report details corrective action plan requirements when agency errors are discovered. The agency must utilize the EEC Financial Assistance Policy Guide, the EEC Financial Assistance Procedures Manual, the EEC Forms for Managing Financial Assistance, and the EEC Early Education subsidy checklist to ensure eligibility for families is determined correctly. The policy guide and checklists should be provided and reviewed with all staff that are responsible for completing parent enrollment and authorizations. The agency must establish or update their review procedure (i.e., a two-person review process) for all files to ensure compliance with all of EEC’s regulations. A corrective action plan (CAP) template is used to respond to findings. This CAP template contains the following sections for completion: identified issues, corrective measures, time frame, action deemed successful, means of evaluation, and name and title of person responsible for the issue. The CAP is reviewed and signed for approval by the EEC Audit Unit Supervisor as well as a senior leader from the agency. A follow up to the CAP is held during the next fiscal monitoring visit to ensure corrective measures have been implemented. d. [x] Conduct supervisory staff reviews or quality assurance reviews. i. [x] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: EEC conducts on-site monitoring to ensure quality. Where applicable, non-payment errors and payment errors are detailed in the on-site monitoring reports. Corrective action plans are required when the review results in nonpayment and payment errors. The ACR Unit Supervisor is responsible for conducting a secondary review of all intentional program violations reported by the ACR Fiscal Monitors as well as approving all final reports and corrective action plans. In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. No Intentional Program Violations were discovered during these reviews. As a result of these activities, EEC has updated the procedure manual to clarify guidance on using staff and quality assurance reviews to identify program violations. ii. [x] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: EEC conducts on-site monitoring to ensure quality. Where applicable, non-payment errors and payment errors are detailed in the reports. Corrective action plans are required when the review results in nonpayment and payment errors. The ACR Unit Supervisor is responsible for conducting a secondary review of all intentional program violations reported by the ACR Fiscal Monitors as well as approving all final reports and corrective action plans. In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. No Unintentional Program Violations were discovered during these reviews. As a result of these activities, EEC has updated the procedure manual to clarify guidance on using quality assurance reviews to identify unintentional program violations. iii. [x] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: EEC conducts on-site monitoring to ensure quality. Where applicable, non-payment errors and payment errors are detailed in the reports. Corrective action plans are required when the review results in nonpayment and payment errors. The ACR Unit Supervisor is responsible for conducting a secondary review of all intentional program violations reported by the ACR Fiscal Monitors as well as approving all final reports and corrective action plans. In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 non-payment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. The Monitoring Review report details corrective action plan requirements when agency errors are discovered. The agency must utilize the EEC Financial Assistance Policy Guide, the EEC Financial Assistance Procedures Manual, the EEC Forms for Managing Financial Assistance, and the EEC Early Education subsidy checklist to ensure eligibility for families is determined correctly. The policy guide and checklists should be provided and reviewed with all staff that are responsible for completing parent enrollment and authorizations. The agency must establish or update their review procedure (i.e., a two-person review process) for all files to ensure compliance with all of EEC’s regulations. A corrective action plan (CAP) template is used to respond to findings. This CAP template contains the following sections for completion: identified issues, corrective measures, time frame, action deemed successful, means of evaluation, and name and title of person responsible for the issue. The CAP is reviewed and signed for approval by the EEC Audit Unit Supervisor as well as a senior leader from the agency. A follow up to the CAP is held during the next fiscal monitoring visit to ensure corrective measures have been implemented. e. [ ] Audit provider records. i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: ii. [ ] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: f. [ ] Train staff on policy and/or audits. i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: ii. [ ] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: g. [ ] Other. Describe the activity(ies): i. [ ] Intentional program violations. Describe the activities, the results of these activities, and how they inform better practice: ii. [ ] Unintentional program violations. Describe the activities, the results of these activities, and how they inform better practice: iii. [ ] Agency errors. Describe the activities, the results of these activities, and how they inform better practice: 10.2.2 Identification and recovery of misspent funds Lead Agencies must identify and recover misspent funds that are a result of fraud, and they have the option to recover any misspent funds that are a result of unintentional program violations or agency errors. a. Identify which agency is responsible for pursuing fraud and overpayments (e.g., State Office of the Inspector General, State Attorney): EEC and the Massachusetts Office of the State Auditor/Bureau of Special Investigations (BSI) work collaboratively through a Memorandum of Understanding to review and investigate fraud and overpayments. b. Check and describe all activities, including the results of such activity, that the Lead Agency uses to investigate and recover improper payments due to fraud. Consider in your response potential fraud committed by providers, clients, staff, vendors, and contractors. Include in the description how each activity assists in the investigation and recovery of improper payment due to fraud or intentional program violations. Activities can include, but are not limited to, the following: i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 non -payment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. One of those non- payment errors had an improper payment that was less than $150. The improper payments were not a result of fraud or intentional program violations. With the approval of the 2025-2027 State Plan, EEC will implement a minimum threshold of $150 for reviews that result in an improper payment. This will minimize overly cumbersome processes in the CCFA system, freeing time for fiscal units to focus on more proactive and substantive activities. The process will be initiated through the Audit Unit’s post monitoring activities if an improper payment is determined. ii. [x] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: EEC works closely with the Massachusetts Operational Services Division and the Attorney General's Office, Division of Public Charities, in reviewing and following up with providers whose annual financial reports and/or filings indicate that improper payments may have occurred. In FY23 the EEC Audit Unit completed 145 risk assessment and assigned risk scores by utilizing Operational Service Divisions Uniform Financial Report Database. The Attorney General's debarment list was used to confirm that no EEC Contract was debarred. When a contracted provider, voucher provider, or subsidy recipient is suspected of committing fraud, the case is referred to the Office of the State Auditor/Bureau of Special Investigations (BSI), who may initiate an in-depth investigation. EEC and/or the Auditor's Office may also refer the matter to the Attorney General's Office or District Attorney's Office for further civil or criminal legal action, which could include debarment and liquidation of assets. Between FY21-24, the Office of the State Auditor, who normally conducts audits on internal controls surrounding eligibility determinations, did not conduct any independent audits on EEC contractors. In FY 2023, EEC referred 23 cases of suspected fraud by a subsidy recipient to BSI. Of those, 3 resulted in a determination of fraud, 5 resulted in a determination of no fraud, and 15 either resulted in a determination of ￿Completed Pending Court’ or ￿Non-Court Calculation’. iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: EEC places outstanding debts owed by contractors, providers, and/or subsidy recipients on the Commonwealth's Billing and Accounts Receivable Subsystem (BARS), which includes prior fiscal year improperly authorized payments. Through BARS, invoices are generated to debtors that include instructions on how to make payments and notifications of any rights which the debtor may have to request a hearing to challenge the debt amount. In FY23, EEC had 303 clients on BARS with a total of $1.7 million owed to date. In that time frame, EEC collected $261,747.12 in revenue. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Through EEC's automated eligibility and billing system called Child Care Financial Assistance System (CCFA), EEC can recoup any sums that must be repaid related to services provided within the current fiscal year from a provider's future payments. This includes payments that were improperly authorized for families who were ineligible for child care subsidies. EEC can also recoup any improper payments made to CCR&Rs through CCFA by reducing future payments for services provided within the current fiscal year. In FY23, the EEC Unit conducted 34 fiscal monitoring visits. Of those 34 visits, 3 providers required reduced payments through CCFA. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: If the debtor fails to make any payments on a timely basis, the Commonwealth may initiate a collection action against the debtor and/or intercept any other Commonwealth funds being paid to the debtor including, but not limited to, the intercept of tax refund payments. In FY23, 222 intercepts took place totaling $86,075.37 collected in revenue. vi. [ ] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [x] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: All state and federally funded providers that contract with EEC to provide and/or manage subsidized child care for eligible families, including family child care systems and CCRRs, are subject to fiscal and compliance monitoring by EECs Audit Compliance and Resolution (ACR) Unit. The ACR Unit consists of four fiscal monitors and one supervisor overseeing the monitoring activities. The monitoring program consists of activities to confirm that families receiving care through these contracts are eligible to receive services according to state and federal regulations and EEC policies. In addition, the monitoring program corroborates contractor compliance by verifying financial information, confirming compliance with audits, and evaluating internal controls. The collection of improper payments, through payment adjustments in the Child Care Financial Assistance System (CCFA) and through the Billing and Accounts Receivable Subsystem (BARS), is completed by the EEC Accounting and Contracts Unit. This Unit consists of two payment specialists. In FY 2023, the ACR Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 nonpayment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. viii. [ ] Other. Describe the activities and the results of these activities: c. Does the Lead Agency investigate and recover improper payments due to unintentional program violations? [ ] No. [x] Yes. If yes, check and describe below any activities that the Lead Agency will use to investigate and recover improper payments due to unintentional program violations. Include in the description how each activity assists in the investigation and recovery of improper payments due to unintentional program violations. Include a description of the results of such activity. i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 nonpayment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. One of those nonpayment errors had an improper payment less than $150. The improper payments were not as a result of an intentional program violation. With the approval of the 2025-2027 State Plan, EEC will implement a minimum threshold of $150 for reviews that result in an improper payment. This will minimize overly cumbersome processes in the CCFA system, freeing time for fiscal units to focus on more proactive and substantive activities. The process will be initiated through the Audit Unit’s post-monitoring activities if an improper payment is determined. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: EEC places outstanding debts owed by contractors, providers, and/or subsidy recipients on the Commonwealth's Billing and Accounts Receivable Subsystem (BARS), which includes prior fiscal year improperly authorized payments. Through BARS, invoices are generated to debtors that include instructions on how to make payments and notifications of any rights which the debtor may have to request a hearing to challenge the debt amount. In FY23, EEC had 303 clients on BARS with a total of $1.7 million owed to date. In that time frame, EEC collected $261,747.12 in revenue. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Through EEC's automated eligibility and billing system, called Child Care Financial Assistance System (CCFA), EEC can recoup any sums that must be repaid related to services provided within the current fiscal year from a provider's future payments. This includes payments that were improperly authorized for families who were ineligible for child care subsidies. EEC can also recoup any improper payments made to CCR&Rs through CCFA by reducing future payments for services provided within the current fiscal year. In FY23, the EEC Unit conducted 34 fiscal monitoring visits. Of those 34 visits, 3 providers required reduced payments through CCFA. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: If the debtor fails to make any payments on a timely basis, the Commonwealth may initiate a collection action against the debtor and/or intercept any other Commonwealth funds being paid to the debtor including, but not limited to, the intercept of tax refund payments. In FY23, 222 intercepts took place totaling $86,075.37 collected in revenue. vi. [ ] Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [x] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: All state and federally funded providers that contract with EEC to provide and/or manage subsidized child care for eligible families, including family child care systems and CCRRs, are subject to fiscal and compliance monitoring by EECs Audit Compliance and Resolution (ACR) Unit. The ACR Unit consists of four fiscal monitors and one supervisor overseeing the monitoring activities. The monitoring program consists of activities to confirm that families receiving care through these contracts are eligible to receive services according to state and federal regulations and EEC policies. In addition, the monitoring program corroborates contractor compliance by verifying financial information, confirming compliance with audits, and evaluating internal controls. The collection of improper payments, through payment adjustments in the Child Care Financial Assistance System (CCFA) and through the Billing and Accounts Receivable Subsystem (BARS), is completed by the EEC Accounting and Contracts Unit. This Unit consists of two payment specialists. In FY 2023, the ACR Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 nonpayment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. viii. [ ] Other. Describe the activities and the results of these activities: d. Does the Lead Agency investigate and recover improper payments due to agency errors? [ ] No. [x] Yes. If yes, check and describe all activities that the Lead Agency will use to investigate and recover improper payments due to agency errors. Include in the description how each activity assists in the investigation and recovery of improper payments due to administrative errors. Include a description of the results of such activity. i. [x] Require recovery after a minimum dollar amount of an improper payment and identify the minimum dollar amount. Describe the activities and the results of these activities based on the most recent analysis: In FY 2023, the Audit Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 nonpayment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. One of those nonpayment errors had an improper payment less than $150. The improper payments were a result of an administrative error. With the approval of the 2025-2027 State Plan, EEC will implement a minimum threshold of $150 for reviews that result in an improper payment. This will minimize overly cumbersome processes in the Child Care Financial Assistance system, freeing time for fiscal units to focus on more proactive and substantive activities. The process will be initiated through the Audit Unit’s post-monitoring activities if an improper payment is determined. ii. [ ] Coordinate with and refer to the other State/Territory agencies (e.g., State/Territory collection agency, law enforcement agency). Describe the activities and the results of these activities based on the most recent analysis: iii. [x] Recover through repayment plans. Describe the activities and the results of these activities based on the most recent analysis: EEC places outstanding debts owed by contractors, providers, and/or subsidy recipients on the Commonwealth's Billing and Accounts Receivable Subsystem (BARS), which includes prior fiscal year improper authorized payments. Through BARS, invoices are generated to debtors that include instructions on how to make payments and notifications of any rights which the debtor may have to request a hearing to challenge the debt amount. In FY23, EEC had 303 clients on BARS with a total of $1.7 million owed to date. In that time frame, EEC collected $261,747.12 in revenue. iv. [x] Reduce payments in subsequent months. Describe the activities and the results of these activities based on the most recent analysis: Through EEC's automated eligibility and billing system, called Child Care Financial Assistance System (CCFA), EEC can recoup any sums that must be repaid related to services provided within the current fiscal year from a provider's future payments. This includes payments that were improperly authorized for families who were ineligible for child care subsidies. EEC can also recoup any improper payments made to CCR&Rs through CCFA by reducing future payments for services provided within the current fiscal year. In FY23, the EEC Unit conducted 34 fiscal monitoring visits. Of those 34 visits, 3 providers required reduced payments through CCFA. v. [x] Recover through State/Territory tax intercepts. Describe the activities and the results of these activities based on the most recent analysis: If the debtor fails to make any payments on a timely basis, the Commonwealth may initiate a collection action against the debtor and/or intercept any other Commonwealth funds being paid to the debtor including, but not limited to, the intercept of tax refund payments. In FY23, 222 intercepts took place totaling $86,075.37 collected in revenue. vi. [ ]Recover through other means. Describe the activities and the results of these activities based on the most recent analysis: vii. [x] Establish a unit to investigate and collect improper payments and describe the composition of the unit. Describe the activities and the results of these activities based on the most recent analysis: All state and federally funded providers that contract with EEC to provide and/or manage subsidized child care for eligible families, including family child care systems and CCRRs, are subject to fiscal and compliance monitoring by EECs Audit Compliance and Resolution (ACR) Unit. The ACR Unit consists of four fiscal monitors and one supervisor overseeing the monitoring activities. The monitoring program consists of activities to confirm that families receiving care through these contracts are eligible to receive services according to state and federal regulations and EEC policies. In addition, the monitoring program corroborates contractor compliance by verifying financial information, confirming compliance with audits, and evaluating internal controls. The collection of improper payments, through payment adjustments in the Child Care Financial Assistance System (CCFA) and through the Billing and Accounts Receivable Subsystem (BARS), is completed by the EEC Accounting and Contracts Unit. This Unit consists of two payment specialists. In FY 2023, the ACR Unit was able to complete 34 fiscal monitoring reviews. A total of 1,209 child care slots were reviewed for eligibility, attendance, and billing. Twenty-three Agency errors, comprised of 20 nonpayment and 3 payment errors, were discovered during these reviews, resulting in a 2% error rate. Fifteen of the 34 fiscal monitoring reviews resulted in non-payment and/or payment errors that required a corrective action plan. viii. [ ] Other. Describe the activities and the results of these activities: e. What type of sanction will the Lead Agency place on clients and providers to help reduce improper payments due to intentional program violations or fraud? Check and describe all that apply: i. [x] Disqualify the client. Describe this process, including a description of the appeal process for clients who are disqualified. Describe the activities and the results of these activities based on the most recent analysis: In accordance with EEC’s Financial Assistance Regulations, if Massachusetts determines that an applicant or recipient of subsidized child care committed fraud as part of their application, EEC reserves the right to disqualify the individual until the improper payment is repaid/recouped. Any time an applicant's child care subsidy is denied, terminated, or reduced or a recoupment is issued, the individual has the right to seek an appeal. If the individual does not agree with EEC’s final decision, they may seek further appeal of the decision in Superior Court. EEC created a tiered sanctions system for Intentional Program Violations and Fraud with 12-, 24-, and 36-month disqualifications depending on the severity and number of occurrences. Parents' appeal rights have remained the same. ii. [x]Disqualify the provider. Describe this process, including a description of the appeal process for providers who are disqualified. Describe the activities and the results of these activities based on the most recent analysis: If a provider managing subsidized child care committed fraud as part of their role as a Subsidy Administrator, EEC reserves the right to terminate the subsidy contract until the improper payment is repaid/recouped. In FY23 there were no instances of provider disqualification. iii. [x] Prosecute criminally. Describe the activities and the results of these activities based on the most recent analysis: When a contracted provider, voucher provider, or subsidy recipient is suspected of committing fraud, the case is referred to the Office of the State Auditor/Bureau of Special Investigations (BSI), who may initiate an in-depth investigation. EEC and/or the Auditor's Office may also refer the matter to the Attorney General's Office or District Attorney's Office for further civil or criminal legal action, which could include debarment and liquidation of assets. We have not had any prosecutions since our last state plan. iv. [ ] Other. Describe the activities and the results of these activities based on the most recent analysis: Appendix 1: Lead Agency Implementation Plan The Appendix will be available for Lead Agencies to use in CARS after the Plan approval letter is issued. For each non-compliance, Lead Agencies must describe the following: • Action Steps: List the action steps needed to correct the finding (e.g., update policy manual, legislative approval, IT system changes, etc.). For each action step list the: o Responsible Entity: Indicate the entity (e.g., agency, team, etc.) responsible for completing the action step. o Expected Completion Date: List the expected completion date for the action step. • Overall Target Date for Compliance: List date Lead Agency anticipates completing implementation, achieving full compliance with all aspects of the findings. (Note: Compliance will not be determined until the FFY 2025-2027 CCDF Plan is amended and approved). Appendix 1: Form [Plan question with non-compliance and associated provision will pre-populate based on preliminary notice of non-compliance] A. Action Steps for Implementation B. Responsible Entity(ies) C. Expected Completion Date Step 1: Step 2 (as necessary): [Additional steps added as necessary] Overall Target Date for Compliance: