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

10.1. How do you ensure good fiscal accounting and tracking of funds? The State maintains the internal controls and financial management system necessary to accurately account for LIHEAP expenditures; both fiscally and programmatically. OEO's fiscal team initially reviews and accepts budget applications, then closely monitors comprehensive expenditure reports and monthly financial status reports prepared/submitted by Subgrantees. Technical assistance and fiscal training are ongoing for agency fiscal officers and staff. 10.1a Provide your definitions of the following: Obligation An obligation is a legal liability to pay out money in the future, or immediately, as a result of a series of actions. For OEO, funds are to be considered obligated to subgrantees, when OEO and the subgrantee enter into a grant agreement, or when OEO enters into a binding commitment with another vendor or agency. For OEO, funds are to be obligated to subgrantees within the federal award period, as stated in Section IV Definitions, E of the grant agreement and Section VI Funding; Federal Award Period of the grant agreement. For subgrantees, funds are to be considered obligated when the subgrantee enters into some form of a binding commitment to pay out money. For subgrantees, obligations may include, but are not limited to, contracts for supplies or services, contracts with local agencies, credit lines established with vendors, lease or rental agreements, and approval letters issued to clients. Subgrantees must obligate funds within the expenditure timeframe, as stated in Section III Grant Period of the grant agreement and Section VI Funding; Subgrantee Period of Performance of the grant agreement. Expenditures Expenditures are charges made by a subgrantee to a project or program for which a federal award was received, as referenced in 2 CFR 200.1 Expenditures and 45 CFR 75.1 Expenditures. Expenditures are to be charged to awards based on the proportional benefit of the expenditure to the federal award(s), as referenced in 2 CFR 200.405 (d) and 45 CFR 75.405 (d). Expenditures may be reported on a cash or accrual basis, as referenced in 2 CFR 200.1 Expenditures and 45 CFR 75.1 Expenditures. Expenditure timeframe The expenditure timeframe is the period of time in which subgrantees may charge expenditures to federal awards. The expenditure timeframe for subgrantees is stated in Section III Grant Period of the grant agreement and Section VI Funding; Subgrantee Period of Performance of the grant agreement. Administrative costs Administrative costs are expenses, incurred by OEO or the subgrantees, which support the day-to-day business operations of their organization. Administrative costs are overhead costs, which are not directly tied to a specific program purpose. 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. 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: 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: Monthly financial and household reports; quarterly vendor interaction reports; annual cumulative financial and household reports. 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. To assure the accomplishment of program outcomes and grant compliance, the OEO will monitor each Subgrantee a minimum of one time per three program years. Monitoring visits will be scheduled and confirmation letters will be forwarded to the Subgrantee at least 30 days prior to the scheduled visit. The OEO may conduct monitoring through a team visit. The team or individuals visiting Subgrantees will prepare a summary of the field visit and monitoring report upon return to the OEO. Subsequently, the monitoring report will be forwarded to the Subgrantee, with a copy to the Chairman of the Board of Directors, and will address any deficiencies identified during the field visit. (Copies of the monitoring report will be forwarded to the entire Board of Directors when there are major issues to be addressed.) Each Subgrantee will have a specific period of time to correct the deficiencies identified, if applicable. Major findings will be tracked by OEO to final resolution. Uncorrected deficiencies may result in contract suspension or possible termination in accordance with established policies. Monitoring Report Timeline: Following the exit conference, the CAA has five (5) business days to provide pending information requested by OEO to resolve outstanding monitoring concerns. •Following the exit conference, OEO has twenty-five (25) calendar days to issue a draft report to the CAA.•From the date of receipt, the CAA has ten (10) calendar days to respond to OEO’s report.•Finally, OEO has twenty (20) calendar days to issue a final report, including the CAA’s rebuttals.•Note: If the deadline falls on a holiday or weekend, the deadline will be extended to the next business day.It is a best practice for OEO to monitor each subgrantee annually. Along with the yearly review, OEO reviews financial expenditures by way of the subgrantee submissions of financial status reports. A fiscal desk review of subgrantee’s detailed general ledgers and summary expenditure reports is also performed intermittently throughout the year. A tracking of quarterly expenditures is reviewed by programmatic LIHEAP staff and households served. OEO may also review real-time customer intake applications through the statewide database. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: OEO provides program and fiscal monitoring for each agency, at least once every three program years. Additional monitoring will be imposed by the state if severe deficiencies are identified. As a best practice, OEO makes the effort to monitor annually.The state attempts to perform on-site monitorings annually as a best practice. Criteria used to determine the scope of monitoring include the following:Financial stability of agency•Agency’s financial/quality management systems•Results of past monitorings and status of findings•Results of single audit report•Leadership and key staff of agency, turnover•Reporting and timely submission•Additional monitoring activities may be performed due to: Results of last monitoring performed•Unresolved findings•Escalation of findings from last monitoring from noncompliant to deficient or immediate deficiency•Resolution of findings•News, word of mouth, complaints, etc.•Potential mismanagement of funds•Consistent errors in reporting•Monitoring activities of the state include, but are not limited to the following:On-site monitoring (program and fiscal)•Desk monitoring•Monthly review of Financial Status Reports•Single audit review. Desk Reviews: Fiscal monitoring staff perform a desk monitirng of all subgrantees in addition to the on-site monitoring to assist in identifying potential issues, opportunities for training and technical assistance, and areas to focus on during the on-site monitoring. A desk review is also performed on the subgrantee's single audit with a management decision issued when required. Programmatic desk reviews will be performed as needed. 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Other 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.