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: Assignment of Authority and Responsibilities Related to Program Integrity The Office of Child Development and Early Learning (OCDEL) is a part of the Department of Human Services and the Department of Education for the Commonwealth of Pennsylvania. Organizational charts, job duties and responsibilities clearly dictate roles and responsibilities of OCDEL team members. Position descriptions are reviewed and maintained with input from the employee and supervisor to assure all parties recognize and understand their tasks and scope of work. Supervisors and employees meet frequently and employee progress reports are reviewed and shared. The Human Resources team supports the implementation of the above processes. Delegation of Duties Duties are delegated to staff by OCDEL’s Deputy Secretary, Chief of Staff, and Bureau Directors. Coordination of activities Bureaus collaborate and coordinate on OCDEL programming as needed. Bureau Directors are aware of what each bureau is responsible for to ensure the appropriate staff are included on projects and decision making. OCDEL’s Deputy Secretary and Chief of Staff regularly meet with the Bureau Directors to ensure that work includes appropriate staff. OCDEL leadership staff - Deputy Secretary, Chief of Staff, Bureau Directors, Special Assistants, and Executive Assistant meet bi- weekly to share program updates and to make sure everyone is aware of the projects that are being worked on. Communication between fiscal and program staff The Finance, Administration and Planning Bureau for OCDEL includes team members dedicated to supporting other bureaus with fiscal components of projects. The Bureau Director for Finance, Administration and Planning collaborates with other departments for the Commonwealth of Pennsylvania as needed to inform projects at OCDEL and gives relevant information to program staff. The director is a part of the OCDEL leadership and actively participates in biweekly meetings to facilitate additional collaboration between the Finance, Administration and Planning bureau and other bureaus. Fiscal staff also work closely with bureau directors/staff and participate in bureau staff meetings. Fiscal staff are kept updated on projects and programming by bureau directors. Fiscal staff also assist with the coordination/review of any fiscal reports. Specific projects requiring additional support or intensive collaboration with members of the fiscal team are arranged with participation from the appropriate member of the fiscal team to most effectively communicate and collaborate on specific initiatives. Segregation of duties OCDEL is made up of five bureaus Early Learning Resource Center Operations, Early Intervention Services and Family Supports, and Finance, Administration, and Planning. Each bureau is charged with their own aspect of OCDEL programming, allowing staff the ability to be subject matter experts., and The delineations eliminate confusion and duplication of work. Establishment of checks and balances to identify potential fraud risks Yearly Enterprise Risk Management assessments are conducted with support from the Department of Human Services in accordance with PA Management Directive 325.12. These risk assessments include members of OCDEL leadership. These assessments help identify potential fraud risks. Other activities that support program integrity OCDEL’s Deputy Secretary and Chief of Staff regularly meet with the Bureau Directors to remain knowledgeable on work being conducted. Bureau Directors also meet regularly with their teams to ensure work is being conducted appropriately. Policy announcements, applications, and program guidance are reviewed and approved by OCDEL’s Executive Assistant, Chief of Staff, Bureau Directors, and Deputy Secretary before being released. 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: OCDEL uses the Performance Standards Monitoring Tools to provide monitoring consistency across all ELRC sub-grantees. These documents detail indicators OCDEL program representatives verify for compliance: support for families, support for providers, leadership and collaboration building, reports/monitoring and documents indicator, data management and fiscal. Within the tools, program representatives verify and discuss the accurate reporting of fiscal responsibilities such as timely payments to providers, accurate quality grant amounts, accurate budgets, completed closeout and recap of funding, following of all financial guidelines and submission of all required fiscal documents. ELRCs are required to have independent audits annually and agree to follow all terms of the OCDEL grant agreement which governs their operations. Annual independent audit report packages are submitted to the Federal Audit Clearinghouse (FAC). The ELRC then emails the FAC confirmation receipt, the certified copy of the data collection form and Single Audit Program Specific Audit Reporting Package Checklist to the Bureau of Accounting and Financial Management (BAFM), Office of the Budget. The report package is retrieved from the FAC and reviewed by BAFM. In addition to the operations monitoring and tool and the ELRC independent audit, an annual compliance monitoring is completed by Program Representatives. This entails a random review of subsidy cases from the prior federal fiscal year. This ensures that eligibility decisions and subsidy payments are being conducted accurately. Additional reviews are conducted of any ELRC with less than satisfactory performance. The Monitoring Tool addresses customer service, including resource and referral, caseload management which includes eligibility and policy compliance, and administration, which addresses funds management. ELRCs are informed of the results of the monitoring and a plan of correction may be required If deficiencies exist. Each of the PDOs are monitored by OCDEL’s PDOs program manager, and through review of quarterly data maps, narrative, and fiscal reporting. The OCDEL Bureau of Early Learning Policy and Professional Development establishes and revises policies to outline the expectations for PDO grantees to ensure they adhere to regulations, policies and procedures associated with the terms of their contract. PDOs are required to have independent audits annually and agree to follow all terms of the OCDEL grant agreement which governs their operations. Annual independent audit report packages are submitted to the Federal Audit Clearinghouse (FAC). The PDO then emails the FAC confirmation receipt, the certified copy of the data collection form and Single Audit Program Specific Audit Reporting Package Checklist to the Bureau of Accounting and Financial Management (BAFM), Office of the Budget. The report package is retrieved from the FAC and reviewed by BAFM. The PA Key and EITA agree to follow all terms of their OCDEL grant agreement which govern their operation. The PA Key and EITA are required to follow the Uniform Circular and complete an annual Single Audit. Single Audits are submitted to the Federal Audit Clearinghouse (FAC). The PA Key and EITA submit their Single Audits to the PA Department of Human Services Bureau of Accounting and Financial Management (BAFM), Office of the Budget. The Single Audit is reviewed by FAC, BAFM and OCDEL. Additionally, OCDEL meets with the PA Key and EITA quarterly to review progress on meeting agreement deliverables and fiscal activities to date. In October of each year, the PA Key and EITA are required to submit their general ledgers to OCDEL to independently confirm that expenses incurred equal amounts paid. 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: ELRCs agree to follow all terms of the OCDEL grant agreement that governs their operations. ELRCs are required to follow the Uniform Circular and complete an annual independent audit. Annual independent audit report packages are submitted to the Federal Audit Clearinghouse (FAC). The ELRC then emails the FAC confirmation receipt, the certified copy of the data collection form and Single Audit Program Specific Audit Reporting Package Checklist to the Bureau of Accounting and Financial Management (BAFM), Office of the Budget. The report package will be retrieved from the FAC and reviewed by BAFM. PELICAN Keys to Quality (KTQ) Fiscal Allocation Screens are monitored for: spend down of state and federal quality dollars known as Keystone STARS grants and awards; comparison to invoice and expenditures; and for ELRC performance with grant approved payments and grant closeout activity. PELICAN-KTQ reports are pulled and reviewed to support monitoring of the quality dollars to child care providers and to provide details for federal reporting as it relates to infant and toddler expenditures. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: All state and federal fiscal reports are completed by the appropriate program staff with support, review and oversight from the Bureau of Finance, Administration and Planning (FAP). The program staff first work with the appropriate parties to gather information, this includes the assigned fiscal specialist for the Bureau. After the report is complete, it is sent through an internal routing process to include the FAP Bureau Director, Chief of Staff and Deputy Secretary. The OCDEL Bureau of Early Learning Resource Center Operation’s Fiscal Program Representative continually reviews the ELRCs service funds to ensure children receive timely enrollments with providers and do not have an untimely delay in services due to being on a waiting list when there are available funds. State and federal funding is provided to the ELRCs through an allocation in PELICAN Child Care Works. After each month end, child care providers report attendance for each child enrolled in subsidized child care and invoice the regional ELRC for services provided in the previous month. Information from PELICAN CCW is interfaced with SAP, the commonwealth’s accounting system. The Federal 696 report is prepared and reviewed by Comptroller Operations, Federal Accounting and utilizing the grant and expenditure coding details available in SAP. d. Other. Describe: The OCDEL Bureau of Early Learning Resource Center Operation’s Fiscal Program Representative continually reviews the ELRCs service funds to ensure children receive timely enrollments with providers and do not have an untimely delay in services due to being on a waiting list when there are available funds. 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: OCDEL recognizes the importance of effective fiscal management practices and defines these as developing and maintaining processes and procedures that ensure appropriate planning, oversight, monitoring, and accountability of fiscal resources. OCDEL, like other agencies of the Commonwealth of Pennsylvania, routinely works to improve program measures and track progress towards achieving goals and objectives. This definition guides OCDEL in decision making and assures funding is used appropriately. Effective fiscal management for OCDEL includes and is not limited to: • Partnerships with other commonwealth agencies for fiscal oversite and accountability, include but not limited to the Commonwealth budget office, comptroller, treasury, and financial operations/audits; non-commonwealth partners include Early Learning Resource Centers fiscal staff and their independent auditors, and independent auditors like KPMG who provide annual risk assessments for OCDEL; • Use of reliable fiscal data systems like SAP and PELICAN Child Care Works to allocate and track funding/expenditures; • Development of policies and procedures defining how CCDF dollars can and cannot be used; • Ongoing oversight and monitoring of CCDF expenditures, routine budget meetings to discuss projections/allocations, annual recapping of funds, and auditing of the funds/ELRC. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: Measuring and tracking fiscal management practices through the use of line- item budgets, fiscal systems, data, and audit reports. c. How the results inform implementation. Describe: OCDEL uses the results to inform and improve (when needed) policy, fiscal/data systems, monitoring, and operations 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: OCDEL participates in risk assessment of activities and audits conducted by external auditing firms and/or other State agencies, as it relates to CCDF. These include DHS and KPMG LLP (KPMG). In the recent past, these audits have revealed there are no gaps in processes or procedures and no internal control deficiencies. These internal controls, processes, and procedures will continue. DHS engaged KPMG to assist with an annual assessment of its internal controls using the framework established by the Standards for Internal Control in the Federal Government, known as the Green Book, and in accordance with PA Management Directive 325.12. KPMG works with leadership and program managers to identify and evaluate risks with an aim to ensure an adequate internal control structure by correcting deficiencies, removing redundant processes, and increasing efficiencies. b. The frequency of each risk assessment. Describe: A risk assessment is conducted annually. Each year, we revisit the previous risk assessment to update inherent risks to the organization’s objectives, continue to document the controls identified in high-risk areas, and perform annual monitoring of key controls. DHS initiates the risk assessment and provides a timeline to OCDEL for appropriate participation. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: The discussion and evaluation results are utilized to drive process design, enhance system controls, and assure alignment with department priorities and strategic goals. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: Ongoing evaluation and improvement efforts have resulted in reduced risk and magnitude of impact. Feedback from all participants is gathering at the beginning, middle and end of the process to determine effectiveness. 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: Training needs related to policy changes issued via Announcements take place with the ELCRs, OCDEL’s Bureau of Certification and Bureau of Early Learning Resource Center Operations staff as needed. Policy announcements are discussed during ELRC Director’s meetings, and all materials are made available on the ELRC Portal, which is accessible for all staff. OCDEL staff receive training on new policy announcements for inclusion in the policy chapters prior to issuance to the ELRCs or child care providers. OCDEL conducts training for the ELRCs on policy chapter changes and those trainings and materials are made available on the ELRC Portal. ELRCs are responsible for training new staff. As part of their contract, ELRC are required to submit training plans for how they will train staff. OCDEL staff participated in an overview of CCDF training, provided by OCC staff, at our most recent OCDEL all-staff meeting. OCDEL uses training materials provided by OCC to train new staff. ii. Describe how staff training is evaluated for effectiveness: OCDEL uses the Performance Standards Monitoring Tool to provide monitoring consistency across all ELRC sub-grantees. The Monitoring Tool addresses customer service, including resource and referral, caseload management which includes eligibility and policy compliance, and administration, which addresses funds management. ELRCs are informed of the results of the monitoring and a plan of correction may be required If deficiencies exist. OCDEL monitors ELRC business processes by reviewing reports and researching cases on a varying basis. In some instances, follow-up sessions are scheduled when issues are identified as recurring for a specific sub-grantee. The Provider Agreement requires Directors/Owners/Operators and staff who have a role in processing CCW payments to take professional development on Program Accountability and Integrity within 90 days of hire. The Director/Owner/Operator must sign an attestation confirming the training was completed or will be completed. As ELRCs review invoices for processing, they identify trends regarding issues or discrepancies and contact the provider to review the policy. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: OCDEL program representatives meet weekly with their OCDEL Division Chief to discuss needed updates, questions, and exchange information as it relates to their assigned ELRC regions. Information and data related to program implementation, service delivery and provider feedback are reviewed during these meetings to identify opportunities for professional development, training and needed policy clarifications. Regularly scheduled ELRC Director meetings take place throughout the year with agenda items related to identified training needs. Policy clarification memos are sent as needed to support effective implementation of the program. 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: Directors/Owners/Operators and staff who have a role in processing CCW payments must take PD on Program Integrity and Accountability within 90 days of hire. This professional development is available through the PD Registry. This is considered an initial orientation for providers. Relative providers are required to have a face-to-face meeting with the ELRC where they review program integrity and accountability prior to receiving payment. Directors/Owners/Operators and staff who have a role in processing CCW payments, who have not already completed the professional development, will be required to do so within 90 days of hire. This PD will be available through the PD Registry. Additional PD will be created as needs are determined. Training needs related to policy changes issued via Announcements take place with the ELCRs, OCDEL Certification staff and Bureau of Operations program representative(s), as needed. Policy announcements are discussed during ELRC Director’s meetings, and all materials are made available on the ELRC Portal, which is accessible for all staff. OCDEL staff receive training on new policy announcements for inclusion in the policy chapters prior to issuance to the ELRCs or child care providers. OCDEL conducts training for the ELRCs on policy chapter changes and those trainings and materials are made available on the ELRC Portal. ii. Describe how provider training is evaluated for effectiveness: OCDEL uses the Performance Standards Monitoring Tool to provide monitoring consistency across all ELRC sub-grantees. The Monitoring Tool addresses customer service, including resource and referral, caseload management which includes eligibility and policy compliance, and administration, which addresses funds management. ELRCs are informed of the results of the monitoring and a plan of correction may be required If deficiencies exist. OCDEL monitors ELRC business processes by reviewing reports and researching cases on a varying basis. In some instances, follow-up sessions are scheduled when issues are identified as recurring for a specific sub-grantee. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: OCDEL program representatives meet weekly with their OCDEL Division Chief to discuss needed updates, questions, and exchange information as it relates to their assigned ELRC regions. Information and data related to program implementation, service delivery and provider feedback are reviewed during these meetings to identify opportunities for professional development, training and needed policy clarifications. Regularly scheduled ELRC Director meetings take place throughout the year with agenda items related to identified training needs. Policy clarification memos are sent as needed to support effective implementation of the program. 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: Pennsylvania participates in the triennial Federal Improper Payments Error Rate Review for the CCDF program. For federal record review years, the state uses a pre-approved Record Review Worksheet which includes boilerplate language, updates, and state-customized language. The worksheet provides a standardized format to assess the case record and to determine whether the child was eligible and received correct subsidy payment for the sample review month. For federal review years, Pennsylvania chooses the sample size of 276 cases. In addition, if the federal cases to be reviewed do not include at least ten cases per subgrantee, the state reviews a minimum of ten cases per each subgrantee per year. Any additional cases are not included in the sample of 276 for ACF-404 reporting. All cases reviewed on non-federal review years and all cases over and above the federally required ones are reviewed using a standardized compliance monitoring tool that is based on the Federal Record Review Worksheet. Any error rate, including payment error rates, which exceed 10 percent requires a corrective action plan from the subgrantee. All corrective action plans are reviewed with the ELRC. OCDEL monitors the subgrantee until compliance is met. OCDEL uses results from monitoring to inform policy decisions, procedures and improve training activities provided to the ELRCs. 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 OCDEL Executive leadership, and any deficiencies are directed to the responsible bureau(s) for corrective action. OCDEL participates in an annual evaluation of internal processes and controls. Any audit deficiencies would be addressed during that annual review. 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. [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. During OCDEL’s last Risk Register post- meeting, it was determined that all risks identified had low to moderate risk. b. [ ] Yes. If yes, what were the indicators? How did you use the information to strengthen your internal controls?