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 accounting and tracking of LIHEAP funds takes place on the state and local levels. Local administering agencies are allowed only three days’ cash on hand. The Minnesota Department of Commerce requires local administering agencies to submit monthly financial status reports and tracks and monitors those reports on an ongoing basis. Quality and Performance Control tracking is performed to reduce late payments and process energy vendor refunds in a timely manner. Centralized payment process for Primary Heat, Crisis, and ERR benefits. Commerce staff review and assess SP fiscal information annually for compliance as part of the annual contracting process (Local Plan and Internal Controls Documentation). 10.1a Provide your definitions of the following: Obligation Minnesota’s Definition of Obligation: Amount of award for a specific Federal Fiscal Year that is: Spent or encumbered; • Funds that are obligated via agreement or memo (e.g., to the Weatherization Assistance Program) through the end of that Federal Fiscal Year (i. e., through September 30); • And funds that are budgeted in SWIFT for payments for EAP benefits for pending applications (e.g., applications submitted in by 10/1 for the upcoming program year). • Encumbrances include: Money that is budgeted in SWIFT for state personnel • Money for which a purchase order has been created for a specific purpose • Money for which a Notice of Funds Available (NFA) has been created for a specific purpose • Expenditures Expenditures are funds that are spent on a specific item. Expenditures occur when funds are actually paid out. Expenditure timeframe 90 percent of funds from an award for a given Federal Fiscal Year (FFY) must be obligated in the same FFY in which they were awarded. Any funds carried over into the subsequent FFY must be obligated by the end of the FFY following the FFY in which they were awarded. Funds that are obligated by the abovementioned deadlines time must be fully expended by the deadline for the final SF-425 for the associated award. Administrative costs Administrative Funds may be used for the cost of EAP staff and associated costs including: Program planning and preparation. • Taking an application and verifying information. • Entering data into eHEAT. • Advocacy services not paid with Assurance 16 funds. • Out-of-State travel. • Additionally, time spent processing completed applications, determining eligibility, entering information into eHEAT, etc. is always an administrative cost, regardless of household need. Time spent helping households who are able to complete their application without unreasonable hardship is an administrative cost. 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. All single audits of state agencies are conducted by the State Auditor, which is a statewide elected position. https://www.osa.state.mn.us/ 10.3. Describe any audit findings of the grant recipient (i.e. State/Tribe/Territory) rising to the level of material weakness or reportable condition cited in the single audits, inspector general reviews, or other government agency reviews from the most recently audited fiscal year. No Findings Finding Type Brief Summary Resolved? Action Taken 1 10.4. Audits of Local Administering Agencies What types of annual audit requirements do you have in place for local administering agencies/district offices? Select all that apply. Local agencies/district offices are required to have an annual audit in compliance with Single Audit Act and OMB Circular A-133 Local agencies/district offices are required to have an annual audit (other than A-133) Local agencies/district offices' A-133 or other independent audits are reviewed by Grant recipient as part of compliance process. Grant recipient conducts fiscal and program monitoring of local agencies/district offices Local agencies and district offices are required to have an annual audit in compliance with Single Audit Act and OMB Circular A-133 Compliance Monitoring 10.5. Describe your monitoring process for compliance at each level below. Check all that apply. Grant recipients have a policy in place for appropriate separation of duties and internal controls. Internal program review Departmental oversight Secondary review of invoices and payments Other program review mechanisms are in place. Describe: 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: Commerce EAP receives, reviews and assesses SP corporate audit information annually for compliance as part of the annual contracting process (Local Plan and Internal Controls Documentation). 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. All local EAP agencies are monitored on site at least once a year. Initial monitoring takes place from October to December at selected EAP agencies. Full monitoring is typically started in late December or January, with the last visits completed in May or June. All local EAP agencies receive a full monitoring visit. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: All local EAP Service Providers receive at least one on-site monitoring visit. Commerce conducts a comprehensive organizational risk assessments annually. The risk assessment includes review of various planning documents as well as an assessment of each organization's financial position and internal controls maturity. Overall risk is based on both probability (i.e., likelihood of risk events occurring) and impact (as measured by relative program size and/or service to particularly sensitive populations). Service providers are rated as low, medium, or high risk. Low and medium risk service providers are typically not selected for in-person initial program audit visits, whereas high risk service providers will typically have both an in-person initial visit and subsequent full program audit visits. All service provider have the latter. Particularly high risk service providers will receive ongoing T&TA throughout the program year, depending on the particular issues. Desk Reviews: Commerce runs and analyzes reports on a weekly basis for all EAP Service Providers. Commerce has authority to request any information regarding the operation of the program. In addition, Commerce regularly analyzes eHEAT (EAP's database) and other data for patterns and information. This information may lead to questions about a Service Provider's program delivery. When questions arise, the Program Performance Auditor or other designated staff may follow up with the Service Provider 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Annually 10.9. How many local agencies are currently on corrective action plans? 3 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.