10.1 Effective Internal Controls

Lead Agencies must ensure the integrity of the use of CCDF funds through effective fiscal management and must ensure that financial practices are in place. Lead Agencies must have effective fiscal management practices in place for all CCDF expenditures. 10.1.1 Organizational structure to support integrity and internal controls Describe how the Lead Agency’s organizational structure ensures the oversight and implementation of effective internal controls that promote and support program integrity and accountability. Describe: The Lead Agency is divided into multiple divisions. The Division of Early Childhood and Care & Development (DECCD) implements the CCDF program for the agency. To ensure proper implementation, oversight, and integrity of the CCDF program, DECCD works closely with other divisions, including the Office of Budgets and Accounting and the Office of Inspector General (OIG) that function separately but in coordination with DECCD. The Office of Budgets and Accounting assists with DECCD’s budget and submitting fiscal reports and with overseeing any contracts that DECCD has in place to assist with implementing the CCDF program (i.e., professional development training and technical assistance, resource and referral agencies, etc.) The OIG is comprised of the following divisions: (1) Fraud Investigations, (2) Internal Audit, (3) Administrative Hearings, (4) SNAP Quality Control, (5) Programmatic Quality Control, and (6) Benefit Recovery Unit. These positions are crucial to the detection, and prevent waste, fraud, and abuse and promote economy, efficiency and effectiveness in the childcare program for the agency. The procedure for the investigation of recipients of the CCPP are as follows: Investigative Analytics receives a fraud tip (fraud claim) concerning a recipient of CCPP. Investigative Analytics conducts a preliminary investigation and gathers information and documents concerning the recipient. Investigative Analytics forwards the fraud claim and information gathered to Fraud Investigations. Fraud Investigations conducts a thorough investigation and drafts a Report of Investigation detailing its findings and substantiating or not substantiating the fraud claim. If the fraud claim is unsubstantiated, the claim is closed. If the fraud claim is substantiated, the claim, including the Report of Investigations and all supporting evidence, is forwarded to the Benefit Recovery Unit. The Benefit Recovery Unit verifies the payment amount received fraudulently by the recipient and notifies the recipient of the fraud claim. Thereafter, the fraud claim is forwarded to Administrative Hearings. Administrative Hearing conducts a hearing and determines whether there was intent and if there is an overpayment. If there is an overpayment or improper payment, the claim is forwarded to the Benefit Recovery Unit for recoupment of funds. 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: All funding issued through grants and contracts is tracked by internal order and grant number through the state accounting system MAGIC, Mississippi's Accountability System for Government Information and Collaboration. Grants issued are tracked through the Lead Agency's information system for CCDF and the state accounting system, MAGIC, as required by agency regulation. 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: The Lead Agency tracks funds through the afore stated processes. Additionally, reports are generated through the tracking process and serve as the basis for interdepartmental meetings and coordination with the Lead Agency's Office of the Inspector General of the Lead Agency. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: DECCD works with the MDHS Office of Budgets and Accounting to prepare all state and federal fiscal reporting. The Lead Agency assigns codes to each type of expenditure. As DECCD expends funds on CCDF activities each activity is coded (i.e., Direct, Indirect, Admin, Quality, Quality Infant/Toddler, etc.). Each month DECCD and the Office of Budgets and Accounting meet to review the previous months expenses and prepare the monthly report. The two divisions coordinate to prepare for any state level audits and any federal fiscal reports (e.g., the ACF-696 expenditure report for Mandatory, Matching, and Discretionary Funds). d. Other. Describe: N/A 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: DECCD works with the MDHS Office of Budgets and Accounting to prepare all state and federal fiscal reporting. The Lead Agency assigns codes to each type of expenditure. As DECCD expends funds on CCDF activities each activity is coded (i.e., Direct, Indirect, Admin, Quality, Quality Infant/Toddler, etc.). Each month DECCD and the Office of Budgets and Accounting meet to review the previous months expenses and prepare the monthly report. The two divisions coordinate to prepare for any state level audits and any federal fiscal reports (e.g., the ACF-696 expenditure report for Mandatory, Matching, and Discretionary Funds). b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: DECCD works with the MDHS Office of Budgets and Accounting to prepare all state and federal fiscal reporting. The Lead Agency assigns codes to each type of expenditure. As DECCD expends funds on CCDF activities each activity is coded (i.e., Direct, Indirect, Admin, Quality, Quality Infant/Toddler, etc.). Each month DECCD and the Office of Budgets and Accounting meet to review the previous months expenses and prepare the monthly report. The two divisions coordinate to prepare for any state level audits and any federal fiscal reports (e.g., the ACF-696 expenditure report for Mandatory, Matching, and Discretionary Funds). c. How the results inform implementation. Describe: The Lead Agency’s coding and reporting structure allows for closer inspection of spending in all CCDF categories and provides information needed to ensure that the Agency is meeting the required CCDF spending percentages (i.e., direct services, indirect services, administration, quality improvement, infant/toddler activities, etc.). d. Other. Describe: N/A 10.1.4 Identifying risk Describe the processes the Lead Agency uses to identify risk in the CCDF program including: a. Each process used by the Lead Agency to identify risk (including entities responsible for implementing each process). Describe: The Chief Counsel for Programs and the Assistant Special District Attorney reviews all program policies and policy changes to evaluate potential for risk and complete a risk assessment as a part of their review. Policies and policy amendments must be approved by the Office of the Attorney General before they can be proposed for filing or considered effective by the Lead Agency. b. The frequency of each risk assessment. Describe: Risk assessments are conducted prior to the execution of any and all contracts between the Lead Agency and any contracted organizations or parties. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: If risk assessment reveals a higher level of risk pertaining to a contract or activity, the Lead Agency will make a determination if the risk is too great to pursue that particular action. If the agency decides to move forward, then heightened monitoring of that activity may take place. Consistent risk assessment also affords the Lead Agency with data to help make processes cleaner and less risky when carrying out CCDF activities. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: The Lead Agency has both internal and external audits conducted on all programs, including the CCDF program. These audits identify where the Agency is in compliance with all requirements, as well as when there may be areas where non- compliance is present. These audits also help identify where the agency is successful in meeting program and fiscal requirements. e. Other. Describe: N/A 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: The Lead Agency trains staff on policy and audit procedures during the staff's new hire orientation. Staff is notified of any policy or audit changes by official notification. Any additional training necessary for implementation of the changes is provided in staff meetings. This practice results in staff remaining current on all policies and implementation strategies. ii. Describe how staff training is evaluated for effectiveness: After completion of the CCDF training, staff are given test parent and provider eligibility cases to process as a way of evaluating if they can properly apply CCDF eligibility requirements to the approval of applications. Their test cases are reviewed a CCDF training coordinator for accuracy, errors, and understanding of policy. Of the total test cases, staff have to have an error rate of less than 10% to graduate to reviewing actual applications. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: The Lead Agency continuously monitors and assesses the need to update policy through analysis of monthly reports, feedback from providers, and recommendations from program partners and stakeholders. For example: The Lead Agency conducts a monthly error rate review of CCDF subsidy payments. If an improper payment is detected, the Agency will determine the reason for that improper payment and address the issue with eligibility staff through training and other means necessary to ensure the reason for the improper payment is not repeated. This would be addressed almost immediately after the improper payment would be discovered through the error rate review. 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: The Lead Agency requires new providers to complete an online orientation on all CCDF program requirements and program integrity protocols as a condition of approval to serve CCDF-eligible children. The Lead Agency also offers ongoing quarterly trainings to providers on policy implementation and any changes that have occurred within the quarter. ii. Describe how provider training is evaluated for effectiveness: As new CCDF policies are implemented (i.e., policy manual updates are put in place), this training is reviewed to ensure that it aligns with all new required policies and procedures. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: The Lead Agency continuously monitors and assesses the need to update policy through analysis of monthly reports, feedback from providers, and recommendations from program partners and stakeholders. 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: The Lead Agency conducts monthly error rate reviews. Results of these are shared and reviewed with all eligibility staff. Individual staff members that are responsible for any improper payments receive individualized training to ensure that the reason for the error rate is not repeated. b. Audit results. Describe who this information is shared with and how the Lead Agency uses the information to evaluate the effectiveness of its internal controls: Audit results are shared with the Lead Agency staff and include any suggested methods for strengthening internal controls when areas of weakness are identified. 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: N/A 10.1.7 Identified weaknesses in internal controls Has the Lead Agency or other entity identified any weaknesses in its internal controls? a. [x] No. If no, describe when and how it was most recently determined that there were no weaknesses in the Lead Agency’s internal controls. The Lead Agency's Office of Compliance monitors the subsidy cases by randomly selecting 225 cases per month to review for case and payment errors from staff, parents, and providers. Once the review is completed the results of the audit are sent to the MDHS Division of Early Childhood Care & Development, which administers the CCDF program, to review and make adjustments which can include training with staff, policy review, or the development of other tools which may improve compliance. The division must maintain less that 10% in errors per monthly review. Also, child care providers are randomly selected to be inspected onsite to review subsidy ledgers and CCDF documentation kept on file. b. [ ] Yes. If yes, what were the indicators? How did you use the information to strengthen your internal controls?