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

10.1. How do you ensure good fiscal accounting and tracking of funds? Fiscal control and accounting procedures have been established to assure proper dispersal for all federal funds received. The State of Michigan continues to utilize the financial and accounting system, Statewide Integrated Governmental Management Application, also known as SIGMA. SIGMA has continued to provide for Michigan's financial transactions, including budgeting, accounting, and payments. DHHS must follow rigorous fiscal accountability and control procedures as laid out in the Financial Management Guide (FMG). The FMG represents a consolidation of state financial management policies and procedures. The FMG is an internal document, available on the State of Michigan's intranet. The program area works with Grant Management Staff to develop Interagency Agreements which specify the responsibilities of any state department and the DHHS in the dispersal of federal funds and reporting the required data and fiscal information to the US Department of Health and Human Services. Involved state departments cooperate in providing reports, as outlined in the Interagency Agreement and with the federal investigations undertaken in accordance with section 2608 of the Low-Income Home Energy Assistance Act of 1981, as amended. The LIHEAP Program Office also works with the department's Bureau of Audit and Compliance division for ongoing reviews of crisis assistance benefits issued through the State Emergency Relief program. These reviews include accounting and tracking practices. 10.1a Provide your definitions of the following: Obligation Funds set aside for a particular use, i.e. 10% obligated for administrative purposes, 25% obligated for the home heating program to use from 1/1-9/30. Funds that are set aside for a specific use, committed to use for direct pay for HHC or administration costs, these funds are preportioned to the specific need, however may be reallocated due to unuse. Funding that is obligated for a particular use, but not yet cleared, awaiting warrant/EBT cashing. Such as nominal payments issued on EBT cards, but have not been cleared/cashed by the recipient. Expenditures Funds already processed through the system and paid. These funds have been expended and therefore accounted for by the system. Expenditure timeframe FY award must be expended by the end of the award date, therefore all funds obligated for a paticular use must be expended/accounted and paid out by the award end date. The HHC is obligated a portion of the LIHEAP award, of which an amount is set up in a payable for the next FY to be expended/cashed by the end of the award grant period. HHC is processed and issued to the recipient by the end of the fiscal year award, however, the recipient has an extended time in the next fiscal year to cash the warrant in which Treasury will submit invoices to DHHS for payment from the accounts payables, but before the end of the award grant period. Administrative costs Cost of administration to run the program. Cost of workers salaries to administer LIHEAP benefits, supplies, contracts to budget personnel, system enhancements, etc. 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. In accordance with MCL Section 18.1461, Single audits are conducted by the State of Michigan Office of Auditor General (OAG) or an independent accounting firm selected by the OAG. 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 other 2023-057: MDHHS did not maintain sufficient documentation of its efforts to evaluate client eligibility; examples of documentation include support for the verification of the client's income, client contribution payment, and proof of energy crisis for 11 (26%) of 42 sampled LIHEAP-funded State Emergency Relief (SER) energy payments. In Progress procedure/policy changes 2 other See attached report. In Progress procedure/policy changes 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: 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. Weatherization: The Department's Bureau of Community Action and Economic Opportunity (BCAEO) conducts the program monitoring for weatherization. We monitor 10 percent file reviews and 5 percent onsite technical monitoring based on the DOE production and program year. DOE and LIHEAP funds are typically braided on Weatherizaiton jobs. Grant managers monitor expenditures and grant compliance throughout the grant period. Annual programmatic and fiscal monitoring are completed at each agency along with quarterly production desk reviews. MEAP: MEAP grantees provide financial status reports and program status reports on a quarterly basis, which are reviewed by staff from the Michigan Public Service Commission (MPSC), who administers MEAP on behalf of DHHS. Reporting requirements are outlined in the MEAP RFP, see attached. Staff from the LIHEAP Program Office work closely with MPSC staff to ensure compliance and appropriate spending of LIHEAP's Assurance 16 funding. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: 5 percent of weatherized homes are monitored based on the DOE production and program years. MPSC review and perform an attribute-sampling of the monthly client lists for correct eligibility determinations as well as perform(virtual) site visits with each grant recipient during the fiscal year. Desk Reviews: 10 percent of weatherized homes are monitored based on the DOE production and program year. 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Annually Other 10.9. How many local agencies are currently on corrective action plans? 4 CAA's 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.