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: DWSS/CCDP is the assigned Lead Agency and authority for administration of the CCDF. Responsibilities related to program integrity are shared between CCDP staff, DWSS Fiscal staff, CCL, NDE-OELD, the CCR&R agencies, the DWSS Quality Assurance unit, and the DWSS Investigations and Recovery unit to ensure eligibility, scholarship accuracy, quality, policy implementation, and program integrity are maintained. The delegation of duties is divided among the various teams to promote and support program integrity. CCDP staff review billing documentation to ensure goals, outcomes, and measures are being met by subrecipients and CCR&R agencies and has frequent communication with the DWSS Fiscal team to ensure accurate billing. Every request for funding must have supporting documentation that is specific to the scope of work outlined in the agreement. Funds are monitored against spending authority and any requests for budget modification must be in writing and related to achieving the scope of work. Requests for reimbursement are reviewed at three levels: CCR&R fiscal staff, CCDP staff, and DWSS fiscal. Subawards and contracts are monitored and evaluated to ensure federal and fiscal compliance, ensure requirements fall within the scope of work, and that outcomes are being met. Monitoring of the CCR&R agencies is completed by a team of staff that includes program, fiscal/contracts, our DWSS auditor, and a CPA certified contractor. Technical assistance is provided by the CCDP staff to the CCR&R agencies and subcontractors which are responsible for facilitating child care activities. Annual monitoring of the subrecipient agencies is done by CCDP’s internal monitoring team to evaluate and determine risk level of each agency, prevent fraud, and avoid program violations. When any training gaps are identified, the CCDP facilitates additional training to maintain quality and integrity of the program. The DWSS Quality Assurance unit completes case reviews to ensure appropriate scholarship eligibility determinations are being made and errors of improper payment are addressed. The DWSS Investigations and Recovery unit facilitates repayment agreements in the circumstance of fraud or overpayments which supports program integrity. 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 requests for funding (whether subsidy reimbursements or quality funds which are also subawarded to external partners) must have supporting documentation that is specific to the scope of work outlined in the agreement. Expenditures are monitored against spending authority and any requests for budget modification must be in writing and the modification must be related to achieving the scope of work. The Lead Agency maintains fiscal oversight of subgrants and contracts by monitoring all subgrants and contracts to ensure federal and state regulations are adhered to and to ensure outcomes are met by the contractor or subrecipient. The grants and contracts are monitored by CCDP fiscal staff, and DWSS fiscal staff for complete and accurate billing. Provider files and timesheets are audited by staff on a regular basis making sure all documents are current and accurate. Billing is validated using system generated queue reports, and client files. Requests for reimbursement are reviewed at three levels. The Children’s Cabinet and Urban League staff, CCDP, and DWSS fiscal unit provide review of documents prior to payment authorization. This results in less errors in requests for reimbursement and enables case managers to identify when a provider may be fraudulently signing timesheets. Managers, Supervisors and QA staff perform ongoing audits to ensure that all information is accurate. Ongoing reviews of provider files and documents are completed monthly. Licensed providers must keep licenses current and submit copies to the program. Provider billing documents are reviewed upon receipt and during processing to ensure appropriate payment. During initial training, scholarship eligibility staff are introduced to the Quality Assurance unit and the role they have in maintaining program integrity. Communication occurs between the Quality Assurance unit, Investigations and Recovery, CCDP staff, and CCR&R agencies to identify and address errors and avoid improper payments. Internal audits are also conducted to assist in preventing fraud and intentional program violations. 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 DWSS Quality Control team completes case reviews through desk audits to ensure proper payments are issued to providers. The Fiscal unit maintains expenditure data by categories of authority. An error is identified as an improper payment, incorrect eligibility determination, or failure to comply with State or Federal policy and procedures. The CCDP maintains error rate data, expenditure data, and program violation information which is communicated at the State level monthly among the CCDP staff, Fiscal unit, Quality Assurance unit, and Investigations and Recovery unit. The communication and tracking systems in place ensure costs are reasonable, allowable, and promote appropriate expenditure of child care funds. When overpayment or underpayment is identified, efforts are coordinated among the CCDP, CCR&R agencies, and Investigations and Recovery unit to establish repayment agreements and recoup improperly paid funds. Quality funds are also tracked closely via monthly spenddown meetings with all subrecipients receiving quality dollars which currently includes the Nevada Department of Education and The Children's Cabinet. DWSS/CCDP Program Specialists work closely with funded partners receiving quality dollars to ensure Nevada is meeting the 9% and 3% quality goals and that funds are being spent appropriately no allowable activities intended to improve the quality of early childhood settings across the state. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: DWSS/CCDP has an annual single audit conducted by a certified public accountant firm, Eide Bailly, who reviews processes and internal controls to ensure the program is compliant with state and federal requirements. Every three years, DWSS/CCDP is monitored by the ACF Office of Child Care for compliance with the 2014 Reauthorization requirements. Intermittently, DWSS/CCDP is audited by the Office of Inspector General for compliance with the CCDF Background Check regulations. Every request for funds must have supporting documentation that is specific to the scope of work outlined in the agreement. Funds are monitored against spending authority and any requests for budget modification must be in writing and the modification must be related to achieving the scope of work. The Lead Agency maintains fiscal oversight of subawards and contracts by monitoring all subawards and contracts to ensure federal and state regulations are adhered to and to ensure outcomes are met by the contractor or subrecipient. The grants and contracts are monitored by CCDP fiscal staff, and DWSS fiscal staff for accurate billing. Fiscal reporting data is compiled and maintained by the fiscal staff to submit required state and federal reports. 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: DWSS/CCDP defines effective fiscal management practices through Control Environment, Risk Assessment, Control Activities, Information and Communication, and Monitoring practices as identified on the CCDF Internal Control Memo which identifies activities and costs that are allowed or unallowed. At the Cabinet and Urban League level, timesheets are received and placed in date stamp order. The billing is reviewed for accuracy and placed in a billing log and given a number to be processed. Staff then send the Request for Reimbursement sheets to CCDP at DWSS. CCDP then analyzes and reconciles each RFR to ensure accuracy of formulas, that spending is toward allowable costs and then sends the document to the DWSS's Fiscal team to analyze again and move to the process of drawing down the funds - this process allows providers to be reimbursed within the 30-business day deadline while still ensuring integrity of the program. Every request for funds must have supporting documentation that is specific to the scope of work outlined in the agreement. Funds are monitored against spending authority and any requests for budget modification must be in writing and the modification must be related to achieving the scope of work. The Lead Agency maintains fiscal oversight of subgrants and contracts by monitoring all subgrants and contracts to ensure federal and state regulations are adhered to and to ensure outcomes are met by the contractor or subrecipient. The grants and contracts are monitored by CCDP fiscal staff, and DWSS fiscal staff for accurate billing. The CCDP monitors the Subsidy/Eligibility CCR&R agencies and the NDE-OELD (Quality) annually to assess policy implementation and ensure integrity of the program. Each funded agency is required to develop written procedures to carry out its systems of internal accounting and administrative control including: 1) A plan of organization, which provides for the segregation of duties appropriate to safeguard the assets of the agency; 2) A plan which limits access to assets of the agency to persons who need the assets to perform their assigned duties; 3) Procedures for authorizations and record keeping which effectively control accounting of assets, liabilities, revenues, and expenses; 4) A system of practices to be followed in the performance of the duties and functions of each agency; and 5) An effective system of internal review. The purpose of internal control is to help ensure that the following objectives are being achieved: 1) Effectiveness and efficiency of operations; 2) Reliability of financial reporting; and 3) Compliance with applicable laws and regulations. An effective internal control system consists of five standards: 1) Control Environment: Management and employees must establish and maintain an environment throughout the organization that sets a positive and supportive attitude toward internal control and conscientious management. 2) Risk Assessment: Internal control must provide for an assessment of the risks the agency faces from both external and internal sources. 3) Control Activities: Policies, procedures, techniques, and mechanisms implemented by management to address all levels and all functions of an agency covering operational, financial reporting, and compliance issues. 4) Information and Communication: Information should be recorded and communicated to management and others within the agency who need it and in a form and within a time frame that enables them to carry out their internal control and other responsibilities. 5) Monitoring: Internal control monitoring must assess the quality of performance over time and ensure that the audit findings and other issues are promptly resolved. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: DWSS/CCDP measures and tracks results of fiscal management practices through annual monitoring of the CCR&R agencies. CCDP agencies are required to complete a Self-Assessment Questionnaire (SAQ), that must be completed prior to annual monitoring. The SAQ tracks budget and fiscal data for each agency and ensures that additional accounting measures are being followed at the CCR&R level and that Child Care funds are being managed appropriately. At the State level, DWSS/CCDP staff review all billing submissions received from CCR&R agencies for accuracy and compliance with allowable expenditures. If any unallowable expenses are identified, meetings with the CCR&R agency(s) occur to resolve the issue prior to payment being issued. The results of these practices further ensure appropriate spending of CCDF dollars. c. How the results inform implementation. Describe: DWSS/CCDP uses the results of internal control processes including the Self-Assessment Questionnaire (SAQ), that must be completed prior to annual monitoring tracks budget and fiscal data for each agency and ensures that additional accounting measures are being followed at the CCR&R level and that Child Care funds are being managed appropriately. At the State level, DWSS/CCDP staff review all billing submissions received from CCR&R agencies for accuracy and compliance with allowable expenditures. Any fiscal issues that are identified at any level of the internal control process are evaluated and communicated both internally and with the CCR&R agency. Communication and meetings occur to evaluate management practices and determine an appropriate solution to avoid future errors. 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: Risk assessment is evaluated using internal controls that provide an assessment of the risks the agency faces from both external and internal sources. These assessments are conducted on all agencies that receive CCDF dollars. The SAQ is required during annual monitoring, in addition to an evaluation of written procedures and controls which includes the SAQ, and any new procedures or revisions. b. The frequency of each risk assessment. Describe: Risk assessments are conducted annually for every subrecipient/contract vendor, and prior to the disbursement of CCDF dollars to any new recipient. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: DWSS Fiscal analyzes risk assessment data and any previous findings including, but not limited to, tax information, business licensure, board of director information, etc. that may be detrimental to child care program implementation and appropriate expenditures d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: Annual monitoring reports, assessments, fiscal reviews, and Quality Assurance reviews are used to identify any issues with risk assessment processes. Training is provided to ensure compliance and resolve any non-compliance items. Annual reports with any findings, or citations, are addressed with Lead Agency staff, subrecipients, and other CCDP agencies. 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: DWSS/CCDP monitors the CCR&R agencies and NDE-OELD annually to assess policy implementation and ensure integrity of the program. Staff receive training on CCDP policy and regulations at all levels of program implementation. CCDP staff stay apprised of federal regulations and changes implemented through frequent cohorts and meetings with Office of Child Care (OCC) and Administration for Children and Families (ACF). At the State level, CCDP policy is reviewed frequently to ensure alignment with program integrity and requirements. Policy changes are typically developed with input from the CCR&Rs. Other partners and stakeholders such as Child Care Licensing may be included as well. Changes to the Child Care Policy Manual are published and distributed as Policy Transmittals to partners via Publications Recipient distribution lists. A spreadsheet tracking all policy changes is maintained by the Quality Assurance department and is shared with staff and other lead agencies that administer the CCDF program. Policy training is provided to new CCDP staff upon hire and throughout employment. Additional technical assistance and training is provided to the CCR&R agencies as needs are identified through case reviews, fiscal management, and annual monitoring. The CCR&Rs conduct initial and ongoing training with eligibility staff and communicate policy updates as changes are made. CCDP, CCR&R, and necessary stakeholder staff are included in policy development. ii. Describe how staff training is evaluated for effectiveness: DWSS/CCDP policy training is provided to all new CCDP staff upon hire and throughout employment. Additional technical assistance and training is provided to the CCR&R agencies as needs are identified through case reviews, fiscal management, and annual monitoring. The CCR&Rs conduct initial and ongoing training with eligibility staff and communicate policy updates as changes are made. Training effectiveness is evaluated through individual case reviews, performance feedback, Quality Assurance reviews, onsite monitoring, and by utilizing error rate data to identify additional training needs. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: Error rate data are collected by the Quality Assurance team, and risk assessment data collected during annual onsite monitoring is used to identify ongoing training needs for CCR&R staff and providers. Data collected during State-level audits provides additional opportunities for the CCDP to assess program integrity and implement additional education measures to ensure CCDP policy and program compliance. 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: To maintain program integrity, all providers, regardless of license status, are required to cooperate with DWSS/CCDP in securing all information needed to determine initial or continuing eligibility. All providers that participate in CCDF must complete a Provider Service Agreement at the time of enrollment, and annually thereafter, which details the requirements and penalties for non-compliance with DWSS/CCDP policies. CCR&R staff provide direct training and educational courses to providers to support program requirement compliance. Services offered by the CCR&R agencies include training and counseling, quality improvement, fiscal management and business plan development, assisting providers in maintaining licensing requirements, and provider education on file management. ii. Describe how provider training is evaluated for effectiveness: CCR&R agencies conduct annual, unscheduled visits with providers to evaluate compliance with all health and safety requirements using a Health and Safety Checklist, and validate appropriate enrollment, staffing, and fiscal record-keeping methods including timesheets, enrollment, certification adherence, etc. Recommendations are made to the provider for any findings identified, and providers have 30 days to resolve any items in non-compliance. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: Error rate data collected by the Quality Assurance team, and risk assessment data collected during annual onsite monitoring of both licensed, and license-exempt providers to identify ongoing training needs. Data collected during State-level audits provides additional opportunities for the CCDP to assess program integrity and implement additional education measures to ensure CCDP policy and program compliance. CCR&R agencies conduct annual, unscheduled visits with providers to evaluate compliance with all health and safety requirements using a Health and Safety Checklist, and to validate appropriate enrollment, staffing, and fiscal record- keeping including timesheets, enrollment, certifications, etc. Recommendations are made for any findings identified, and providers have 30 days to resolve any items in non-compliance. 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: Every three years, DWSS/CCDP is monitored by the ACF Office of Child Care for compliance with the 2014 Reauthorization requirements. Intermittently, DWSS/CCDP is audited by the OIG for compliance with the CCDF Background Check regulations. DWSS/CCDP has an annual single audit conducted by a certified public accountant firm, Eide Bailly, who reviews processes and internal controls to ensure the program is compliant with state and federal requirements. The triennial report results are used to evaluate the effectiveness of the internal controls in place and communicate needed changes. Once an error rate review is completed and errors are found, it is the Division's policy for Program Review and Evaluation (PRE) unit to notify designated Child Care staff. An error rate memo is also sent to Child Care's contractors (Urban League and Children's Cabinet) for review. The error rate memo explains the nature of the error and how it was discovered. It is then the responsibility of the contractor to review the findings and determine the appropriate action. The contractor must respond within 14 days whether or not it accepts or rebuts the findings. The Chief of Child Care and Development and the Chief of PRE (or their designee) meet with the contracting agency to resolve the matter. In addition, every quarter, a call is held with the Division's Child Care staff and the contractors to discuss error rates and ways to improve. If there are excessive error levels, the Division will review current processes and internal controls to determine what changes, if any are needed. If changes are needed, staff updates the Division's Manual which is circulated throughout the division. If procedure permits, these changes will also be discussed with the audit team to ensure internal controls are updated. Error rate information is available to the public via a request for public records submitted through https://dhhs.nv.gov/About/PublicRecordsRequest/. 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 reviewed by the Division to evaluate the effectiveness of its internal controls determine what changes, if any are needed to the internal control processes. If changes are needed, staff update the Division's Manual which is circulated throughout the division. If procedure permits, these changes will also be discussed with the audit team to ensure internal controls are updated. Audit result information is available to the public via a request for public records submitted through https://dhhs.nv.gov/About/PublicRecordsRequest/. 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. [ ] 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? The internal audit team, and external auditors at the State level have identified opportunities to improve internal controls to improve the delivery of the Child Care Program. Suggestions and/or corrective action plans were provided using audit reports which identified weaknesses in internal controls. DWSS/CCDP is using this feedback to improve processes and strengthen internal controls.