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: All CCDF activities are housed in the Lead Agency. All providers who receive subsidy payments must have a Child Care Provider Contract with the Lead Agency. The Child Care Subsidy unit is responsible for monitoring all provider contracts. The Lead Agency uses an electronic benefits transfer (EBT) system statewide. The Lead Agency Finance Division is responsible for payments for service based on the time and attendance information that the parent documents on a daily basis. Weekly payments are direct deposited into the provider's bank account for attendance two weeks in arrears. The Lead Agency Office of Inspector General (OIG) conducts audits to ensure compliance with program policies. Staff from all divisions responsible for CCDF compliance meet regularly to discuss any issues regarding administration of the CCDF program. Adult and Family Service (AFS) eligibility workers are required to run a case scan report which contains pertinent benefit information about the case as a whole and about individual case members prior to each eligibility determination. The report also checks the Data Exchange system which includes data regarding receipt of SSI and Social Security benefits, wage data, new hires, unemployment compensation, addresses, etc. The Office of Inspector General also uses reports of suspicious EBT activity when conducting provider audits. These efforts assist staff in making more accurate eligibility decisions and help identify potential fraud or intentional program violations. 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 Lead Agency administers all CCDF expenditures and provides oversight. All providers who receive subsidy payments must have a Child Care Provider Contract with the Lead Agency. The Child Care Subsidy unit is responsible for monitoring all provider contracts. Grants, contracts and quality funds are assigned a contract monitor in the Child Care Services division. The contract monitor is responsible for ensuring invoice is accurate and in alignment with program initiatives. The Child Care Subsidy Unit is responsible for reviewing provider payments and addressing any discrepancies. All discrepancies are staffed with Child Care Services Comptroller and Division Director to determine appropriate action. 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 uses an electronic benefits transfer (EBT) system statewide. Payment for service is based on the time and attendance information that the parent documents by swiping his or her EBT card through the point of service (POS) machine or recording attendance via the ECC Connect smartphone app on a daily basis. Weekly payments are direct deposited into the provider's bank account for attendance two weeks in arrears, which allows the client 10 days to complete or correct swipes. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: Various Lead Agency divisions prepare and submit required state and federal reports depending on responsibilities within the agency. The divisions include Finance, Child Care Services and Adult and Family Services. d. Other. Describe: 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: The Finance Division performs centralized accounting, fiscal reporting, claims auditing, payroll, and budgeting functions for the Oklahoma Department of Human Services (OKDHS); and provides fiscal guidance for OKDHS personnel based on generally accepted accounting principles, governmental accounting standards, the governmental auditing standards as prescribed by the federal Office of Management and Budget (OMB) Circular A133, the cost principles for federal funds received by state government as prescribed by OMB Circular A87, and adherence to the Oklahoma Central purchasing laws. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: Dashboard reporting is designed to present budget to actual expenditures and other budget related reporting. The CARE and Audit Unit is responsible for accurately identifying the financial funding for all federal and state programs through the agency cost allocation. The unit tracks and analyzes expenditures while providing knowledge-based feedback of financial eligibility determinations to ensure compensability of federal funding. CARE conducts federal reporting of expenditures, manages cash draws, and prepares expenditure estimates for funding sources administered through OKDHS c. How the results inform implementation. Describe: Staff from all divisions responsible for CCDF finance meet regularly to discuss any issues regarding administration of the CCDF program and provide input. By clearly defining the roles and responsibilities for each department under Finance responsible for implementation. The Lead Agency’s Finance Division is responsible for receiving the CCDF funding, for making payments to CCDF providers, and for financial reporting to ACF. 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: 1) The Improper Payments error rate review process is conducted every three years as required by CCDF regulations; 2) The Child Care Subsidy unit conducts monthly random case audits using a similar method to the Improper Payments process; 3) Supervisors at the local level spot check child care subsidy cases of experienced staff for accuracy; 4) Supervisors at the local level review 100% of child care subsidy cases for new staff. b. The frequency of each risk assessment. Describe: 1) Improper Payments conducted every three years; 2) Child Care Subsidy unit random audits are conducted monthly; 3) Supervisors check 5 cases a month of experienced staff; 4) Supervisors review 100% of cases for new staff. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: Risk Assessment Results are shared with eligibility staff and are used to create targeted training material using a variety of formats including online training tools, local back-to-basics trainings, and monthly live virtual trainings conducted by the Child Care Subsidy unit. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: Error trends are tracked at the state and local levels to determine the effectiveness of risk assessment efforts. Targeted trainings are developed based on identified error trends to improve accuracy in the CCDF program. 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: All staff who administer the CCDF program are trained on policy changes in a variety of formats including online training tools, local back-to-basics trainings, and monthly live virtual trainings conducted by the child care subsidy unit. The Oklahoma Administrative Code (OAC) which houses all program policies is available online at the Lead Agency’s website. New eligibility staff are trained on CCDF policies at New Worker Academy. Results of the improper payments error rate review process are shared with eligibility staff and are used to develop targeted training. Local leadership meet several times a year at statewide meetings to receive updates and training on new policies and procedures. Required topics include: • 45 CFR Part 48 ￿ Child Care Development Fund • Office of Child Care: The Fundamentals of CCDF Administration Resource Guide • State of Oklahoma Central Purchasing Act ￿ Title 74 • OKDHS Procurement ￿ Contract Monitoring Training ii. Describe how staff training is evaluated for effectiveness: Online training tools have comments and suggestions boxes for field staff to complete to determine if the tools were helpful. Additionally, focus group discussions are conducted and the feedback received is used for improvements and future training material. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: In addition to the Improper Payments process, the Lead Agency conducts random audits of child care subsidy cases. The results are used to create targeted training material using a variety of formats including online training tools, local back-to-basics trainings, and monthly live virtual trainings conducted by the Child Care Subsidy unit. 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: All providers are required to complete the online Orientation to Child Care Subsidy Contracts training prior to being contracted to receive subsidy payments. In addition, new providers are required to review the Child Care Subsidy Provider Handbook and sign an attestation. The Child Care Subsidy Provider Handbook is a comprehensive online tool developed for the child care provider community to ensure providers are aware of child care subsidy program policies. Providers are encouraged to access the handbook often when they have questions about the Child Care Subsidy Program. Providers may also be required to complete additional training for program violations. ii. Describe how provider training is evaluated for effectiveness: All Child Care Provider Contracts are monitored by the Child Care Subsidy unit. In addition, the Lead Agency Office of Inspector General (OIG) conducts audits to ensure compliance with program policies. Providers who violate Lead Agency policies may be required to complete additional training. 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 uses program integrity data to develop new provider training material. In addition, providers are reminded of program policies via the Child Care Services monthly newsletter, broadcast messages, or updates to the online Child Care Subsidy Provider Handbook. 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: Error rate review triennial report results are shared with all staff who administer the CCDF program through broadcast messages and online training material. The results are used to create targeted training material using a variety of formats including online training tools, local back-to-basics trainings, and monthly live virtual trainings conducted by the Child Care Subsidy unit. 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: Random audits are conducted by the Lead Agency. The results of the audits are shared with the field staff that worked the specific case. When error trends are discovered, targeted training is created and presented in a variety of formats including online training tools, local back-to- basics trainings, and monthly live virtual trainings conducted by the Child Care Subsidy unit. 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: 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? Information obtained in error rate data and monthly audits indicated that there were specific trends in errors that occurred due to staff training opportunities. The error trends were used to develop new online training material and the implementation of a new monthly live virtual training hosted by the Child Care Subsidy unit. These expanded training opportunities allow for increased interaction between program staff at the state office and eligibility staff located around the state.