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: Management staff have responsibility for delegating authority and responsibilities to supervisors and line staff in order to promote and support program integrity and accountability. Management staff have delegated duties in the following ways to assure oversight of internal controls that support and promote program integrity and accountability: Non grant/contract expenditures: I. Responsibility for encumbering CCDF funds is delegated to program staff. II. Responsibility for approval to expend CCDF funds is delegated to: • Management staff to establish budgets for approval of the encumbrance • Financial Operations Division Buyer to purchase the item • Program and Operations staff to check budgets and review and approve the invoice prior to payment • Financial Operations Division staff to pay the invoice III. Responsibility for approval of payroll is delegated to management staff. Grant/Contractual expenditures I. Responsibility for writing a contract is delegated to program and Operations staff. II. Responsibility for review of the contract is delegated to Contract, Legal and Compliance staff. III. Contract, Legal and Compliance staff along with program management staff approve and sign the contract. Child care direct expenditures I. Responsibility for determining eligibility and authorizing care for eligible families and registering providers is delegated to the local agency staff. II. Billing documents are created through the Minnesota Electronic Child Care System for registered providers serving eligible and authorized families. III. Responsibility for entry of billing records is delegated to the provider or the local agency staff. IV. Review and approval of the billings records is delegated to the local agency staff. V. All payments are made through the Minnesota Electronic Child Care System. VI. Daily payments are summarized by program and loaded into SWIFT (the state accounting and budget system) via an interface file. This assures expenditures are charged to the correct budget account. Individual staff activities are reviewed annually by each employee and supervisor. Activities are coordinated between various areas to avoid conflicting duties and identify and remove duplicated efforts and assure expenditures are appropriate and not duplicated. Communication between Child Care Operations staff, program staff and Financial Operations Division staff occurs before an invoice is paid. Duties have been segregated in the following ways to assure oversight of internal controls that support and promote program integrity and accountability: Non grant/contract expenditures: I. The encumbrance is created by administrative support staff. II. Approval of the encumbrance is completed by program and management staff. Each encumbrance requires multiple approvals. III. Financial Operations Buyer has final approval and purchases the item. IV. Program and Operations staff review and approve the invoice for payment. Approval of the payment is separate from the person doing the work. All invoices require at least two approvals before payment is made. V. Financial Operations Division staff pay the invoice. VI. Individual staff complete their timesheet and approvals are made by their supervisor or manager. Grant/Contractual expenditures: I. Program and Operations staff write the contract. II. Contract, Legal and Compliance staff review the contract. III. Contract, Legal and Compliance staff along with program management staff approve and sign the contract. Child care direct expenditures I. Local agency workers determine eligibility and authorize care for eligible families. They also register providers. II. Minnesota Electronic Child Care System creates the billing documents used to bill for services by registered providers serving eligible families. III. The provider or local agency staff enter billing records into the Minnesota Electronic Child Care system. IV. Local agency staff review and approval billings records before payment. V. Minnesota Electronic Child Care System has checks and balances programmed into the system to assure payments are made according to policy. VI. Daily payments are summarized by program and loaded into SWIFT (the state accounting and budget system) via an interface file. This assures expenditures are charged to the correct budget account. Checks and balances in the contracting process by delegation and segregation of duties. This includes multiple reviews completed by contracting, operations and program staff prior to finalization of a contract. Each contract requires both contract and operations management staff to sign the contract. Grants/contract expenditure reports and invoices are reviewed by department staff with follow- up with the vendor on any inconsistencies, unreasonable or unallowable costs. Non grant/contract costs: personnel expenditures are reviewed and approved by department management. Non-personnel expenditures go through a purchase order (EIOR) system requiring review and approval by several individuals to assure costs are reasonable and allowable. Written policies and procedures are in place on how to establish a contract, how to encumber funds and to pay expenditures. Agency wide risk assessment is conducted for CCDF funds. Each risk identified is ranked and high risks are mitigated to reduce the likelihood they occur. Risks are reviewed quarterly to ensure mitigation processes are working. Annual state audit of CCDF block grant is conducted by the State Auditor’s Office. Each local agency is audited by the department. Child care direct expenditures to providers are made through the Minnesota Electronic Child Care system. This system is programmed with multiple checks and balances including, but not limited to: tracking and limiting payments for absent days and holidays and capping provider payments according to policy. 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 department maintains CCDF grants and other contracts with the sub-recipient agencies and vendors. The grants and contracts contain language requiring compliance with federal, State and department guidelines. The agencies and vendors certify that they will follow department guidelines when the contracts are signed. They must also submit work plans and budgets that are included as attachments to the contract and must be approved by the department to receive funding. Any requested changes to the work plans and budgets must be submitted to the department for prior approval. The agencies must also submit to the department the reports for any outside audits that have been completed. In addition, the department has established performance measures for the grant contractors based on the contract work plans which the department uses to evaluate the work and performance of the agencies based on the established measures. The department requires these agencies to submit regularly scheduled financial and program reports based on timelines that are included in the contract language (i.e. financial reports are submitted quarterly or more frequently for grant contracts and program reports are submitted biannually). These reports and related administrative data compiled by the department are monitored ongoing as part of a desk review process. The department also requires onsite monitoring visits with the agencies holding grant contracts annually for larger contracts or at least once during each contract period for smaller grant contracts and maintains ongoing communication and technical assistance with the agencies throughout the contract period. Other contracted agencies submit work products which are reviewed prior to final approval. Vendors submit invoices on a monthly or quarterly basis which are reviewed by the agency before payment is made. In compliance with 2 CFR 200.332 (https://www.ecfr.gov/current/title-2/subtitle- A/chapter-II/part-200/subpart-D/subject-group-ECFR031321e29ac5bbd/section-200.332 for federally funded grants, Minnesota Statute 16B.981 (https://www.revisor.mn.gov/statutes/cite/16B.981), Department of Administration Office of Grants Management policy 08-06 (https://mn.gov/admin/assets/Policy 08-06 Pre-Award Risk Assessment Effective Date January 15 2024_tcm36-604382.pdf) and the department’s contracting policy a Pre-Award Risk Assessment (PARA) is completed on all grants over $50,000 including those legislatively named. The PARA consists of: 1) reviewing the responders eligibility by verifying they are not suspended and/or debarred by the US Government and State of Minnesota as well as verifying they are in good standing with the Minnesota Secretary of State; 2) conducting an entity risk assessment by ensuring that they have submitted all of the required documents and attestations and completing a review of the entities prior performance history including but not limited to performance, compliance with terms and conditions and issues or concerns that arose during past monitor or financial reconciliations; 3) completing a financial risk assessment to determine if the entity is financially stable and capable to carry out the duties of the work, this includes reviewing financial documents: IRS Form 990 or 990-EZ, audited financial statements, certified financial audits and other financial documents. The financial risk assessment is not required for political subdivisions such as cities, towns, counties or other municipal corporations or political subdivisions authorized by law to enter into contracts; 4) any risks identified should have additional requirements imposed as part of the contract requirements; 5) if the entity meets eligibility requirements, no substantial risks are determined and/or additional requirements are imposed to ensure success of the project and the entity is financially stable to carry out the work then an award recommendation is provided. The PARA must be completed before a contract can be executed with the entity. 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: Grants/contract expenditure reports and invoices are reviewed by department staff with follow-up on any inconsistencies, unreasonable or unallowable costs. Non grant/contract costs: personnel expenditures are reviewed and approved by department management. Non-personnel expenditures go through a purchase order (EIOR) system requiring review and approval by several individuals to assure costs are reasonable and allowable. Child care direct expenditures to providers are made through the Minnesota Electronic Child Care system. This system is programmed with multiple edits and safeguards, including, but not limited to: tracking and limiting payments for absent days and holidays and capping provider payments according to policy. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: The process for preparing and submitting required reports are as follows: ACF-800: Reports and Forecast unit staff collaborate with Child Care Services and Office of Inspector General (OIG) to draft the report. Data is reviewed by both Child Care Services and the Office of Inspector General prior to submission into CARS. The report is entered into CARS by Reports and Forecast staff. Child Care Services Manager certifies and submits the report through CARS. This process is completed prior to the December 31 due date annually. ACF-801: Reports and Forecast unit staff collaborate with Office of Inspector General staff to obtain data for submission. Reports and Forecast staff upload the file into CARS and submit monthly. ACF-696: Financial Operations staff compile the information to draft the quarterly ACF- 696 Financial Report. The draft is reviewed by Children Family Services program and management staff. Any required revisions are made and final report is submitted through Federal Online Data Collection System (OLDC) by Financial Operations staff. ACF-403 and ACF-404: Child Care Services staff collaborate with staff within Program Compliance and Audit to complete these reports. Review of the draft report is completed by management staff within both units. Report information is entered into Federal Online Data Collection System by Child Care Services Staff and submitted by Child Care Services Director. Both reports are completed on a triannual basis. ACF-901 ARP Stabilization Grants Provider-Level Data: Child Care Services collaborates with the Office of Inspector General in pulling the provider level data from the data system. Data is reviewed by both Child Care Services and the Office of Inspector General prior to submission into CARS. This process is done within days after the close of the end of the quarter that is being reported on. ACF-118 State and Territory Plan: Child Care Services staff collaborate with staff within Office of Inspector General staff, Reports and Forecast and Financial Operations to complete this plan. Consultation also occurs with agencies and partners outside of the department. Child Care Services staff enter and Director submits the plan through CARS. ACF-218 State and Territory Quality Progress Report: Child Care Services has a process and timeline written that identifies who is lead writer for each section, departments to collaborate with and timeline for writing and reviews. The process starts two months prior to the due date. d. Other. Describe: Minnesota utilizes an integrated accounting system which manages the budgeting (established limits for CCDF funds), procurement (obligates CCDF funds), accounts payable (expends CCDF funds), grant management (creates the accounting codes and controls flow of CCDF funds) and accounts receivable (used to generate draw requests from the federal Payment Management System (PMS)), and cash receipting (posts CCDF funds wired from PMS) activities. Accounting transactions are executed and monitored by accounting professionals. Reports are produced and reviewed for each step of the fiscal lifecycle. For federal grants such as CCDF, an accounting professional will have it assigned as part of their portfolio and will review the specific terms and conditions of the federal awards. The accounting process is centralized in the Financial Operations Division which supervises the financial transactions in accordance with GAAP, GASB and applicable federal regulations. 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: Establishment of a framework of policies and procedures that ensures proper budgeting and accounting activities, to include the hiring of professional staff, adequate training of staff, building and maintaining efficient and effective processes, and separation of duties. Financial management is transparent and there is the ability to be agile to make informed decisions while ensuring funds are used within statutory compliance. Financial and operating data is used to show financial stability. Financial risk management ￿ identification of risks and putting policies in place to mitigate effects before they occur. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: Results are measured by tracking the following: Operating budgets budgets All operating budgets are tracked by the Child Care Services Operation Team by reviewing expenditures quarterly and comparing to the actual budget. Performance is measured comparison of expenditures to the actual budget. All anticipated overages are managed by assigning expenditures to another budget or increasing current budget. Burn rate The burn rate is measured by comparing expenditures to the actual budget on a quarterly basis. This process includes administrative budgets, grants and contracts. Time it takes for accounts payable to process invoices Invoice processing is measured from a performance perspective by including both program and contract staff in the review and approval process. Staff assure invoices are received within the timeframe outlined in grants and contracts. Staff assure invoices are processed according to State requirements. Funds written off over time Overpayments are written off by local agencies following policy. This is reviewed and measured quarterly to assure compliance with policy. Any write-offs that are inappropriate are followed-up by program staff. These are reviewed monthly and reported quarterly to financial operations. Payroll health over time Payroll health is measured by managing payroll expenditures to utilize all funding sources appropriately and to stay within the CCDF administrative cap. Budget creation cycle time Budget cycle tasks are measured by completion of the various tasks in a timely manner. Additional processes are required if tasks are completed outside of the budget cycle. Updating CCDF fund with expenditures from previous year This is measured by updating internal fund tracking document to show actual expenditures used and to determine future funds available. This is done ongoing throughout the year. Negative cash flow Negative cash flow situations are reviewed quarterly. This involves review of accounts to determine revenue is appropriately assigned to offset/remove any negative cash flow. c. How the results inform implementation. Describe: Results of the measures above are used to inform management on effectiveness of the fiscal management practices and as a guide for making changes. The results from the items tracked above are reviewed and addressed to assure fiscal practices are followed such as: 1) moving staff payroll expenditures to state appropriated budgets to allow for division growth 2) discussions with staff when invoices are not processed according to requirements and 3) review and follow-up on CCDF fund tracking document to make future funding decisions 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: A complete risk assessment of policies and procedures is completed for the CCDF funds every three years, most currently in calendar year 2023. The project team includes staff from administrative operations and all program areas funded by CCDF. This includes all areas funded by CCDF including subsidy, grants and contracts, quality, licensing, financial operations and program integrity. Program and operational risks are assessed and ranked based on likelihood and severity. Controls are then identified that will mitigate these risks. A risk mitigation plan is created for risks lacking adequate controls. In addition, the results of the full risk assessment and the risk mitigation plan are reviewed and updated on an annual basis. The annual update comprises a review of ongoing change indicators such as changes to the operating environment or leadership or personnel. This work is completed to adhere to both federal and state requirements regarding internal controls within the CCDF program. In compliance with 2 CFR 200.332 for federally funded grants, Minnesota Statute 16B.981, Department of Administration Office of Grants Management policy 08-06 and the department’s contracting policy a Pre-Award Risk Assessment (PARA) is completed on all grants over $50,000 including those legislatively named. The PARA consists of: 1) reviewing the responders eligibility by verifying they are not suspended and/or debarred by the US Government and State of Minnesota as well as verifying they are in good standing with the Minnesota Secretary of State; 2) conducting an entity risk assessment by ensuring that they have submitted all of the required documents and attestations and completing a review of the entities prior performance history including but not limited to performance, compliance with terms and conditions and issues or concerns that arose during past monitor or financial reconciliations; 3) completing a financial risk assessment to determine if the entity is financially stable and capable to carry out the duties of the work, this includes reviewing financial documents: IRS Form 990 or 990-EZ, audited financial statements, certified financial audits and other financial documents. The financial risk assessment is not required for political subdivisions such as cities, towns, counties or other municipal corporations or political subdivisions authorized by law to enter into contracts; 4) any risks identified should have additional requirements imposed as part of the contract requirements; 5) if the entity meets eligibility requirements, no substantial risks are determined and/or additional requirements are imposed to ensure success of the project and the entity is financially stable to carry out the work then an award recommendation is provided. The PARA must be completed before a contract can be executed with the entity. b. The frequency of each risk assessment. Describe: A full risk assessment is completed every three years with an annual update. This includes all areas funded by CCDF including subsidy, grants and contracts, quality, licensing, financial operations and program integrity. The PARA is completed on all grants over $50,000. The PARA must be completed before a contract can be executed with the entity. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: Risks of errors in determining eligibility, authorizing care and making payments are assessed in the following ways: ￿ Minnesota participates once every three years in the federal Improper Payment (IP) error report process and conducts an in-depth review of a sample of individual cases throughout the state. Cases handled by subcontractors are included in the full population used to select the sample for the IP process and, if selected, are subject to the same in- depth review as other cases handled by a local agency. The results of these reviews are used to create tools for workers to help reduce the errors and clarify/simplify policy. These tools include trainings, newsletters, memos, tip sheets, policy pointers and program guides. The results are also used when developing outreach education materials used at individual agency and statewide trainings. ￿ Minnesota continuously reviews a sample of cases from local agencies on an ongoing monthly basis, using the standards established in the Federal Error Report Data Collection Instructions to conduct the reviews. Most common errors found during these reviews are shared with local agencies at statewide conferences and at counties, Tribes, and regional locations when requested to focus efforts on reducing them. The results of these reviews are used to create tools for workers to help reduce the errors and clarify/simplify policy. These tools include trainings, newsletters, memos, tip sheets, policy pointers and program guides. The results are also used when developing outreach education materials used at individual agency and statewide trainings. ￿ Some local agencies develop a case management review process to determine causes of errors and identify specific policies needing review related to eligibility determination. In the most current plan cycle, 62 local agencies indicated they conduct case management reviews of CCAP cases and 33 indicated they conduct case management reviews of CCAP providers. Local agencies share the results of these reviews with their staff and review the policies that led to the error. ￿ Minnesota performs case accuracy reviews on a quarterly basis. Case accuracy reviews require all agencies to complete an Accuracy Review form for each case selected by the department. This process focuses on one CCAP policy at a time, such as a policy used when determining eligibility, authorizing care, registering a provider, or making payments. The results of these reviews are used to create tools for workers to help reduce the errors and clarify/simplify policy. These tools include trainings, newsletters, memos, tip sheets, policy pointers and program guides. The results are also used when developing outreach education materials used at individual agency and statewide trainings. Analysis of these processes inform program improvement by identifying error prone areas, areas of misunderstanding or areas needing simplification. The PARA is used to determine if the entity is financially stable and capable to carry out the duties of the work. Any risks identified should have additional requirements imposed as part of the contract requirements. If the entity meets eligibility requirements, no substantial risks are determined and/or additional requirements are imposed to ensure success of the project and the entity is financially stable to carry out the work then an award recommendation is provided. The PARA must be completed before a contract can be executed with the entity. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: One purpose of the risk assessment is to identify controls in place to avoid negative consequences. The risk assessment process is effective when adequate controls are in place that reduce negative consequences, such as errors, complaints from providers or customers or reduce or identify fraud. 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: Training of workers on MEC2: Staff within local agencies are required to attend training(s) specific to their role in MEC2 that includes child care assistance policy and/or system instruction. Ongoing the department provides training and technical assistance to local agency eligibility workers about policy and system changes. Fraud training: OIG staff conduct routine and non-routine training for financial workers and fraud prevention investigation staff geared towards educating on what fraud is, the importance of fraud referrals, and identifying and investigating potential fraud by CCAP recipients and providers. Additionally, the same OIG staff conduct ongoing trainings for eligibility workers/supervisors/FPI's, and prosecutors on fraud indicators, investigations, steps to establish that fraud exists, and establishing burden of proof, and criminal considerations. Policy change notices are in the form of bulletins and memos. Policy change notices are issued when needed to inform local agency staff and providers of policy changes. Department staff also issue guidance to local agency staff and child care providers through listserv communications. Department staff conduct in-person and online trainings for both department staff and members of other agencies that administer the CCDF program when program requirements involve major changes. In early 2023, a Child Care Assistance Program refresher training was offered around the state to approximately 266 CCAP eligibility workers income, copayments, and other policy and system updates. Policy manual revisions are issued when needed, approximately 4 times per year. This ensures that local agency staff have access to the most up-to-date CCAP policies and information. Updates to the CCAP manual are posted on a PartnerLink website accessible by all local agency staff. Each time updates are made, an email announcement is sent to all county/Tribal contact staff (identified by each local agency) and internal partners identifying the following: • What’s New which highlights recent policy changes to the manual. • Electronic version of the entire manual. • PDF version of the entire manual. • How to locate archived manual versions. For the Child Care Assistance Program, Minnesota ensures that all staff are informed and trained regarding changes made to its policies and procedures, which include program requirements and integrity, through bulletins or memos, PartnerLink content, PolicyQuest (Minnesota's online system that allows local agencies to submit and log case-specific questions), regular contact with five CCAP policy specialists who are assigned to provide technical assistance to local agencies, monthly MEC2 mentor meetings, web announcements, bi-monthly caseworker newsletters, policy pointer emails, training team curriculum updates and revision of old and development of new forms. Department staff also attend periodic meetings with local agency groups throughout the year to provide updates. Information is provided to all new family child care licensing workers during Foundations Training. Foundations Training is required for all family child care licensing workers within the first 90 days of their employment as a licensing worker and must be completed prior to working independently. ii. Describe how staff training is evaluated for effectiveness: Ongoing monitoring and assessment of policy implementation is done through monthly case reviews, quarterly case accuracy reviews, discussion with individual workers when policy questions are raised. Family Care Licensing first provides information for licensors during Foundations Training. Continued monitoring work is done through Rule 13 reviews (MN Rule 9543) that take place every two years. These reviews monitor each county/agency’s licensing work for compliance. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: Program integrity data through error rate results and risk assessment information is used to evaluate and change practice or address training needs in the following ways: I. Risk areas are identified through the full risk assessment of policies and procedures completed for the CCDF funds every three years. These risks are evaluated to identify training needed to mitigate the risk. II. Errors discovered through the monthly review of child care cases completed by Program Compliance and Audits staff and quarterly case accuracy reviews completed by local agencies are analyzed ongoing. During the most current completed reporting quarters, income policy was the focus of the case accuracy reviews. On average, there were 261 cases reviewed per quarter with 8.1% of cases resulting in an error. Errors included data entry mistakes, missing income sources, missing verifications, and inaccurate copayment amounts. This analysis is used to identify training needed to reduce errors. 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: Department staff issue new guidance and policy reminders to child care providers through a listserv and published online. Child care providers receive a copy of the Minnesota Child Care Assistance Program (CCAP) Child Care Provider Guide when they register for subsidy payments and when they renew their registration. The guide is available in paper and electronic formats; it is updated to reflect policy changes. The Child Care Assistance Program Orientation Training online course has been developed and made available to providers. This course is intended for providers serving families on the CCAP. This is a basic orientation to the CCAP and identifies provider’s responsibilities. It is available in English, Spanish and Somali. Child care providers may take a Minnesota Child Care Assistance Program (CCAP) Provider Billing Tutorial. This YouTube video for providers is available any time and describes billing rules and policies (including some interactions between attendance records and billing) and demonstrates how a provider bills using MEC² PRO. The video is available in: • English: https://www.youtube.com/watch?v=wcQsrLSy_Ok • Hmong: https://youtu.be/jMW73kAbmSs • Somali: https://youtu.be/hE-bPVKh72w • Spanish: https://youtu.be/Hp5lIkxeOrI OIG staff operate an ￿Early and Often￿ program, which provides technical assistance, support, and enhanced monitoring for licensed child care centers in their first year of operation. For example, ￿Early and Often￿ staff provide training on attendance record keeping requirements. In addition, the following training documents have been created to assist providers: 1) Minnesota Child Care Assistance Program (CCAP) Child Care Provider Guide ((https://edocs.dhs.state.mn.us/lfserver/Public/DHS-5260- ENG) DHS- 5260), 2) Child Care Center Employer Responsibilities ((https://edocs.dhs.state.mn.us/lfserver/Public/DHS-3941A-ENG) DHS-3941A), 3) Child Care Health and Safety: Questions and Answers for Child Care Centers ((https://edocs.dhs.state.mn.us/lfserver/Public/DHS-3942A-ENG) DHS-3942A), and 4) The Child Care Assistance Program (CCAP): What to know about fraud ￿ information for providers (https://edocs.dhs.state.mn.us/lfserver/Public/DHS- 3943A-ENG) DHS-3943A) (last form is available in English, Somali and Spanish languages). The department has set up a provider telephone line to respond to provider questions about CCDF requirements. The department has met with numerous provider groups to train on program changes and CCDF compliance. ii. Describe how provider training is evaluated for effectiveness: Ongoing monitoring and assessment of policy implementation is done through monthly case reviews, quarterly case accuracy reviews, discussion with individual local agency workers when policy questions are raised. The ￿Early and Often￿ unit conducts multiple on-site visits to child care centers during their first year of licensure. For example, OIG staff conduct an ￿A￿ visit and a ￿C￿ visit. Data supports the effectiveness of the training and shows significant overall improvement between visits. In CY2023: • OIG staff conducted 81 ￿A￿ visits and 70 ￿C￿ visits. • After the ￿A￿ visits, OIG issued 81 technical review letters (one after each visit). • After the ￿C￿ visits, OIG issued 32 ￿no error￿ letters, 17 corrective action notices, and 11 only overpayments. 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 through error rate results and risk assessments is used to evaluate and change practice or address needs in the following ways: I. Risk areas are identified through the full risk assessment of policies and procedures completed for the CCDF funds every three years. These risks are evaluated to identify training needed to mitigate the risk. II. Errors discovered through the monthly review of child care cases completed by Program Compliance and Audits staff and quarterly case accuracy reviews completed by local agencies are analyzed ongoing. During the most current completed reporting quarters, income policy was the focus of the case accuracy reviews. On average, there were 261 cases reviewed per quarter with 8.1% of cases resulting in an error. Errors included data entry mistakes, missing income sources, missing verifications, and inaccurate copayment amounts. This analysis is used to identify training needed to reduce errors. 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: Triennial error rate report results as well as ongoing monthly/annual case review results are shared with department management and program staff. This information is reviewed to identify areas where internal controls can be enhanced to remove risk and reduce errors. Error rate report findings are evaluated to determine what changes are needed to reduce errors in the future. Internal control processes are revised to reduce errors and improve program results. 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: Annual audit results are shared with department management and program staff. Findings related to the effectiveness of internal controls are addressed. . Internal control audit findings are evaluated to determine what changes are needed to mitigate the findings in the future. Internal control processes are revised to improve program results and mitigate future findings. 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: Internal controls are evaluated through the risk assessment process. A complete risk assessment of policies and procedures is completed for the CCDF funds every three years, most currently in calendar year 2023. Risks are assessed and ranked based on likelihood and severity. Internal controls are reviewed to determine if they are sufficient to mitigate the risks. A risk mitigation plan is created for risks lacking adequate controls. In addition, the results of the full risk assessment and the risk mitigation plan are reviewed and updated on an annual basis. This work is completed to adhere to both federal and state requirements regarding internal controls within the CCDF Program. The OIG’s CCAP Audits and Investigations Unit utilizes a control plan with check points that have been established for each phase of their attendance record review and investigative process. A Quality Control Dashboard is maintained that provides access to summary reports for routine monitoring and compliance tracking and reporting on results. 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? Weaknesses show up as audit findings during the annual CCDF Fund financial audit. During the SFY22 audit, the Minnesota Office of State Auditor identified the following weaknesses: Allowable Costs/Cost Principles ￿ Allocation of Costs to Cost Centers Not Included in the Public Assistance Cost Allocation Plan: There were two cost centers included in the Central Office Cost Allocation System (COCAS) that were not listed in the Public Assistance Cost Allocation Plan amendments, resulting in the State of Minnesota being reimbursed for costs from cost centers not included in the Public Assistance Cost Allocation Plan. The department used this information to change the process. Removed of inactive cost centers from the Public Assistance Cost Allocation Plan won’t be done until all related transactions have been processed and costs have stopped flowing through the cost centers. Subrecipient Monitoring: The following exceptions were noted in the testing of subrecipient monitoring: The Minnesota Department of Children, Youth and Families does not perform formal risk assessments on its county subrecipients or document the response to risk assessments for the Temporary Assistance for Needy Families and the Child Care and Development Block Grant programs. The department has used this information to strengthen our internal controls by create a division wide inventory documenting existing risk and monitoring practices such as system recertifications, mandatory training and program case file eligibility reviews. The department has implemented pre-award risk assessment work process for all grants over $50,000. Eligibility: The Minnesota Department of Children, Youth and Families maintains the computer system, MEC2, which is used by local counties to support the eligibility determination process. The sample of the cases reviewed by Minnesota Department of Children, Youth and Families Internal Audit noted not all documentation was available, updated, or input correctly to support participant eligibility. The identified errors noted clients received benefits for incorrect amounts as well as benefits that should not have been paid due to case file information being incorrect, not updated, or not received to process eligibility for the benefit month. The department has used this information to strengthen our internal controls through the following work: • Making changes to MEC² to allow for greater controls, fewer workarounds for workers and more efficient processes. • Doing frequent data clean-up and resolving errors that are found in child care cases. • Revising the MEC² User Manual to make it more plain language and user friendly. • Solicited input from local agency workers about ways to reduce errors. • Researching other ways of automating eligibility information. • Working with local agency staff to improve internal controls through training, ongoing messaging through newsletters, policy pointers and revising policy manual to make it plain language with clear information. Special Tests and Provisions ￿ American Rescue Plan Act Stabilization Funds: In a sample of 40 ARPA stabilization payments tested, 29 payments were made to providers whose application did not include the certifications that the child care provider will provide relief from copayments and tuition payments. The division amended the application for the Child Care Stabilization Base Grants to include language requiring providers to provide relief for co-payments and tuition payments for the families enrolled in the provider’s programs, to the extent possible, and prioritize such relief for families struggling to make either type of payment. The division also updated the program’s Frequently Asked Questions webpage to clarify this requirement.