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

10.1. How do you ensure good fiscal accounting and tracking of funds? LIHEAP funding is monitored through a coordinated effort across multiple divisions of the Human Services Department (HSD) to ensure proper use, accountability, and reconciliation. Key tracking mechanisms include: The Grants Management Bureau of the HSD Administrative Services Division (ASD) monitors all LIHEAP grant funding, including obligations and expenditures. • The Program Support Bureau (PAB) within HSD/Income Support Division (ISD) tracks benefit disbursements and administrative funding allocations. • Quarterly reconciliation meetings are held with ASD to ensure financial alignment and oversight. • Monthly payment reconciliations are conducted using the statewide accounting system to ensure accuracy. • The Restitutions Bureau within ASD tracks and manages all LIHEAP claims and restitutions. • The LIHEAP Unit and ASD Accounts Receivable (AR) Bureau jointly track vendor refunds. AR and the Grants Management Bureau are responsible for tracking deposit activities. • 10.1a Provide your definitions of the following: Obligation An obligation of LIHEAP funds is a legal liability to disburse funds immediately or at a later date as a result of a series of actions. All of the actions below must occur in order to obligate funds for the LIHEAP formula-based grant. • The director of the Office of Community Services, (OCS), Administration for Children and Families (ACF), will make available by April 1 of each year, the application for the Federal LIHEAP Block Grant; • By September 1 of each year, the New Mexico Health Care Authority, Income Support Division (NMHCA/ISD) will submit the required application online in OLDC or through mechanisms as directed by the Director of OCS/ACF. • The HCA/ISD will commit on the state plan, the estimated percentage of funds that will be allowed for each program component. HCA/ISD will ensure that the funds will be obligated after completing the following: • Request meaningful participation from the public, Income Support Division (ISD) employees, subgrantees, and stakeholders in the development of the LIHEAP State Plan; • The Governor or their designee will sign the plan and will agree to abide by federal terms and conditions of the grant; • HCA/ISD will receive notification from the designated LIHEAP program specialist that he or she approves the application for Federal assistance. • When HCA/ISD is notified by OCS/ACF that the LIHEAP State Plan has been approved and the Grant of Award is received, HCA Administrative Services Division (ASD) will submit the LIHEAP budget to the Department of Finance and Administration (DFA) to obtain budget authority. Once completed, HCA/ISD recognizes that it may begin incurring allowable costs during the grant period that will require payment immediately or in the future thus obligating the allowable amount of 90% of the grant. Expenditures Funds can only be expended if they have been obligated. LIHEAP funds can only be expended on allowable obligated funds such as: Payment to customers if vendor is not an approved LIHEAP vendor Payment for Weatherization contract services Payment for eligibility system enhancements Payment to vendors Payment for office supplies PaymeFunds can only be expended if they have been obligated. LIHEAP funds can only be expended on allowable obligated funds such as: Payment to customers if vendor is not an approved LIHEAP vendor Payment for Weatherization contract services Payment for eligibility system enhancements Payment to vendors Payment for office suppliesPayment for LIHEAP staff to attend conferences related to LIHEAP Expenditure timeframe All funds must be expended by September 30 of the current Federal Fiscal Year. Administrative costs Administrative costs must be used exclusively for the administration of the LIHEAP grant. Allowable uses of administrative funds include: • Salaries and benefits for LIHEAP program staff; • Office equipment and supplies necessary for program operations; • Training and conferences directly related to LIHEAP administration and implementation. All expenditures must comply with applicable federal and state guidelines to ensure proper stewardship of LIHEAP funds. 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. Auditors are selected to audit all fiscal activites that occur in all programs administered by the Health Care Authority. 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: The New Mexico Health Care Authority (HCA) contracts the weatherization component of LIHEAP to the New Mexico Mortgage Finance Authority (MFA), which serves as a pass-through entity to its network of service providers. To ensure accountability and compliance HCA conducts an annual on-site visit and a Management Evaluation (ME), which includes a comprehensive fiscal and programmatic review. On a monthly basis, HCA performs a second-party review of invoices and payments, which includes: • Verifying the accuracy of billing; • Cross-referencing invoices with MFA’s weatherized unit report; • Ensuring all services are allocable and allowable under LIHEAP guidelines. 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: LIHEAP staff conduct monthly case reviews of randomly selected households to ensure compliance with all applicable policies and procedures. These reviews serve as a quality assurance measure to evaluate both eligibility determinations and application processing accuracy. Additionally, random LIHEAP case reviews are conducted to assess the compliance of field staff responsible for application approval. If inaccuracies or policy deviations are identified, the following corrective protocol is followed: The Family Assistance Analyst (FAA) and their supervisor who reviewed or approved the case are notified; • Corrections are initiated promptly to resolve the identified errors; • LIHEAP staff track cases with inconsistent information until all errors are fully corrected; • Measures are put in place to prevent recurrence, including technical assistance or procedural reinforcement as needed. • This process ensures that program integrity is maintained and that corrective actions are taken swiftly to uphold standards. • 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. Customer case files are reviewed weekly to ensure that benefits are being given timely, that customers have provided required documents, and that applications are being approved by case workers appropriately. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: N/A Desk Reviews: N/A 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? 0 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.