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: The CCDF program is administered by personnel within the DSS Division of Economic Assistance and the Office of Licensing and Accreditation the Child Care Services program and office within the Division of Economic Assistance responsible for CCA and quality initiatives consists of an administrator, five program specialists, an eligibility supervisor, five eligibility and payment processing caseworkers, and two secretaries. The licensing of Child Care programs is under the Office of Licensing and Accreditation. Child Care Licensing consists of a program manager, a licensing supervisor, and ten licensing specialists. DDS finance oversees fiscal management and support investigation and recovery services related to CCDF. Checks and balances are built into the program through internal file reviews and system limitations that help to prevent inadvertent eligibility or payment errors. Within the Child Care Services program, Program Specialists divide duties between facets of program operation including eligibility policy, payment and provider management, quality initiatives, and grants and contract management. The eligibility supervisor is responsible for supervisory reviews that are completed on a weekly basis. The cases for review are pulled at random for all caseworkers. The eligibility supervisor is also responsible for staff training which includes reviewing all processed case files until new staff show a complete understanding of the child care policies and procedures. Program Specialists and the Program Administrator share responsibility in implementing program integrity measures including file review, contract monitoring practices, and quality control audits which include Improper Payments. DSS finance staff oversee and track program expenditures and review invoicing. Child Care Licensing Staff provide regulatory oversight to child care providers. DSS finance staff oversee and track expenditures and review invoicing. DSS leadership and program staff monitor fiscal and red flag reporting. Program policy changes are communicated to staff, recipients, and providers though policy memos, instruction manuals, and ongoing training to help ensure understanding and improve awareness which leads to reduced risk. The Child Care programs participate in ongoing quality control evaluations including legislative and department audits. If fraudulent activity is suspected or reported regarding a customer, it is forwarded to the appropriate office for review and any needed follow-up. 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 contracted entities submit goals and objectives related to services provided through the contract and a budget estimating expenditures. Monthly activity and expense reports are required to be submitted. Onsite overviews of processes and procedures are conducted by Child Care Services. Grant oversight includes an application outlining items to be purchased or professional bids for work to be completed; and receipts for costs incurred. Each grant applicant provides evaluation of the grant in improving their program. 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 Department of Social Services Division of Finance tracks expenditures with specific accounts, funding sources, and grant years to track costs to specific federal grant and general fund match requirement. The Child Care programmatic staff reviews invoices to ensure costs are allowable with Child Care rules and regulations. The invoices are also reviewed by the accounting staff and the auditor's office staff to ensure the costs are allowable under state regulations and the Uniform administrative requirement 2 CFR 200. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: The ACF-696 Financial report is prepared based on the cost allocation worksheets and expenditure schedules (EXP schedules) and in some cases external information received from time studies, program personnel, or other departmental sources. This report is compiled and completed by DSS Finance who also submits the report. If information is needed for the report the Program Administrator, Program Specialist, and additional financial documents supply it. Indirect costs are allocated to each benefiting program or fund source based on its proportionate share of the total salaries and wages for all benefiting programs within the department. Directly allocated costs are distributed to each benefiting program or fund source based on actual usage of the units as identified in the Department's time study procedures. The EXP schedule includes direct and allocated costs and provides the total year-to-date expenditures and current quarter information for the program in addition to identifying the federal portion of the total expenditures. The EXP schedules capture the required information to track and complete the ACF-696 Financial Report. 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: Effective financial management is having a clear business plan to meet defined outcomes while being good stewards of state and federal dollars. Fiscal practices include budgeting, monitoring obligations, tracking expenditures and earmarks associated with grants efficient and proper cash management ensuring compliance with state and federal rules and regulations, and financial audits. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: Fiscal management practices are evaluated monitored on an ongoing basis though program participating in internal and legislative audits and reviews. An internal control document has been developed and is followed. Results of monitoring or auditing are shared with program staff and department leadership and used to impact staff training and organizational decisions. c. How the results inform implementation. Describe: Results of monitoring or auditing are shared with program staff and department leadership and used to impact staff training and organizational decisions. 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: Child Care Service’s Program Specialists, Program Administrator, and DSS Finance establish checks and balances to ensure program integrity and mitigate risks. Examples include eligibility staff utilizing information available to the division through other programs including TANF or SNAP, to validate information received from applicants. Audits of eligibility cases and provider records are conducted periodically to detect inaccuracies. Onsite visits to contracted entities help to ensure program integrity and reduce risks. b. The frequency of each risk assessment. Describe: Risk assessment is completed on an ongoing basis. Daily evaluation occurs in eligibility determination. Weekly supervisory quality control reviews are ongoing as well. Child Care participates in the triennial improper payments review. Child Care also participates in frequent legislative audits at a minimum triennially. c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: Results of assessments, audits, and monitoring inform ongoing staff training plans, policy development and refinement, as well as used to inform organizational decisions. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: Child Care has received successful results in error rate reviews, internal and Legislative audits, and monitoring that reinforce successful program implementation and risk management. 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: Subsidy caseworkers receive regular training on program policies, regulations and requirements, and updates when changes are made. Staff meetings occur three times weekly to discuss challenging situations, unique issues, and suggested improvements that can be made to the policies and processes. This process reinforces rules, regulations, processes, interpretation, and ensures consistency. The program specialist provides periodic training for other entities such as TANF employment specialists who work with mutual recipient families and share child care assistance information. As policy is updated, notices of changes are provided to TANF and Child Protection staff when changes impact mutual cases. The Child Care Assistance program maintains the Child Care Subsidy Policy Manual and Subsidy Caseworker Desk Guide. When policy updates occur staff are notified during staff meetings and receive copies of updated manuals and guides either physically or by email. Staff have online access to electronic versions of manuals. Subsidy caseworkers receive regular training on program policies, regulations and requirements found in the Subsidy Policy Manual and Subsidy Caseworker Desk Guide. ii. Describe how staff training is evaluated for effectiveness: The program specialist does periodic reviews of case files to ensure compliance with policy and that procedures are understood and followed. Errors are discussed individually with caseworkers to ensure understanding of the requirements. Error rates are established for caseworkers and used in performance evaluation. If areas of concern are identified staff will receive additional training. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing staff training needs: CCS staff evaluate all program integrity data and track error rates on an ongoing basis. This data is used to identify risk areas for training and or policy clarifications. Staff receive ongoing training on any policy or rule changes made to the program. Staff are also trained on the audit processes and assist in completing internal audits. Subsidy staff participate in ongoing case reviews and challenging cases are reviewed with all eligibility staff to ensure that they are implementing policy and rules with a uniform understanding. These discussions are used to influence changes to policy, procedure, and enhance staff training materials leading to better identification of risks. 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 child care providers receive a Child Care Assistance Reimbursement Guide when they begin participating in the program. The guide is available online. All child care providers complete an annual 'provider agreement which outlines their responsibilities for participation and aligns with CCDF integrity expectations. Licensed child care providers that are new to Child Care Assistance are personally contacted to receive an orientation of Child Care Assistance, including policy requirements, which aligns with CCDF integrity expectations. Child Care providers have access to a dedicated CCS staff member that can provide technical assistance with Child Care Assistance and reimbursement which align with CCDF integrity expectations. All child care providers receive policy change notices, which comply with CCDF requirements via email or mail. ii. Describe how provider training is evaluated for effectiveness: Provider training is evaluated through audit outcomes and based on informally extracting recurrent themes in provider inquiries. iii. Describe how the Lead Agency uses program integrity data (e.g., error rate results, risk assessment data) to inform ongoing provider training needs: Program integrity data is used to drill down and identify policy targets that need clarification through enhanced provider outreach or revising of current documents, processes, and front-line staff training. 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: CCS participates in the triennial Improper Payments Review process. Information complied though this process and the report is shared directly with eligibility staff, program administration, as well and Division and Department leadership. Results inform staff training, policy development and refinement, and inform organizational decisions. 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: Child Care submits to legislative audits at a minimum triennially. This audit evaluates program internal controls. Results are shared with eligibility staff, program administration, as well and Division and Department leadership. Results inform staff training, policy development and refinement, and inform organizational decisions. 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. The Child Care program submits to frequent legislative audits that evaluate overall program internal controls and verify compliance. The most recent Legislative audit was completed for Child Care evaluated FFY22 and was completed in 2023. These audits occur at a minimum triennially. No risks were identified in the most recent audit. b. [ ] Yes. If yes, what were the indicators? How did you use the information to strengthen your internal controls?