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: Eligibility service front line staff work with the customer to get the required verifications to determine eligible for the benefits under the CCDF guidelines for the Child Care program. Once a decision has been made the Eligibility Services Division has two divisions to review for case accuracy. This helps to ensure checks and balances are in place for case accuracy. The Program Review Team (PRT) does a more immediate review as it is done within days of the benefits being issued. A random sample of cases is pulled and reviewed monthly. This process allows for errors to be identified quickly and corrections made to ensure accurate payment to the providers. The PRT analyst works directly with frontline staff to maintain this accuracy. The Quality Control Unit also pulls a set amount of case audits monthly that look at the whole certification period for the Child Care program. The results are communicated through reports and monthly meetings with the state Child Care program specialist. Trends from both units are analyzed to help determine training needs for upfront staff. Eligibility Services also has an Investigations unit to identify potential fraud and gather missing information so the frontline staff can better assess case accuracy. Electronic data gathering methods are used to accurately determine eligibility when available. Additionally, the Lead Agency’s Office of Child Care has a provider helpline that primarily assists providers who accept child care subsidy payments. The provider helpline works closely with the Eligibility Services Division and with Child Care Licensing to ensure correct and accurate information is used to process benefits. Provider helpline staff may obtain or question information that leads to an investigation or staffing with Eligibility Services. Having multiple divisions looking at payments from different perspectives is an internal control leading to greater accountability. The Lead Agency’s grants or contracts are almost all reimbursement-based with program and fiscal reviews helping determine the justification of reimbursement requests and continuation of the award. The Lead Agency Child Care program specialists oversee the work of all programs receiving CCDF in the form of grants or contracts. The program specialists are responsible for creating the expected performance requirements for programs based upon CCDF regulations and must evaluate requests for grants or contracts to ensure the program is prepared to meet the performance requirements. The DWS Internal Audit Division determines the risk of the award based upon the history of the program with DWS and communicates this risk to the program specialists. This risk determines the minimum number of evaluations conducted on a program, both programmatic and fiscal. A thorough training is conducted by the program specialists at the onset of any funded program to review the expectations of the program and the allowed usage of funding. Program specialists will regularly evaluate the awarded program’s progress throughout the program year through different aspects of review, to include conducting site visits, desk reviews of required submitted reports, and auditing the program documentation to ensure program integrity. Program specialists are also responsible for reviewing all reimbursement requests from programs as well as all documentation provided to ensure that spending is warranted, justified and allowable. All programs must submit reimbursement requests at least quarterly, to ensure limited fraud opportunities, and require documentation that justifies the request. Once reviewed, the program specialist is responsible for sending documentation to the CCDF fiscal manager for a secondary review and payout. If there are concerns regarding a specific line item of purchase, the program specialist is responsible for determining its allowance and will work with their direct supervisor, the CCDF fiscal manager, and the program before allowing payout. If it is determined that the line item is not allowable, the program will be directed to remove the expense and resubmit the request. Concerns regarding programmatic and fiscal integrity are documented and program specialists are responsible for following up with these programs to ensure swift corrections are taken and if not corrected in a timely manner, terminating the funding with the program. Additionally, the Lead Agency’s OCC Management Team and program staff are in frequent communication with fiscal and contract staff and meet a minimum of once per month to discuss any changes, updates or concerns. 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: Utah Department of Workforce Services (DWS) is a department within the executive branch of the government of the State of Utah. The State maintains a centralized accounting system that is used by all executive branch departments. The State has also developed statewide accounting policies and procedures and a statewide system of internal controls for areas such as budgeting, purchasing, payments, receivables, revenues, inventory, capital assets, travel, payroll, cash receipts, and cash management. In addition, DWS has developed policies and procedures which either mirror statewide policies or are more restrictive than the statewide policies. All invoices are required to submit full supporting documentation or a general ledger, depending on the risk level of the program. The documentation is reviewed by both program and fiscal staff and compared with the invoice charges to ensure that all expenses are allowable. Fiscal staff track contract expenses, and with controls built into the payment system, ensure payments don't exceed the amount contracted. 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: Each invoice is thoroughly examined by the Lead Agency to assure that costs incurred are reasonable and allowable. Each individual that processes invoices utilizes an allowable and unallowable costs document to assure consistency. If there are any questions or issues in regard to allowable costs, the agency or provider submitting the invoice is contacted for clarification. Any unallowable costs submitted will be removed from the budget. The agency or program must submit full documentation accompanied by a general ledger with each invoice each year until there are three "clean" invoices. After three invoices without errors, only a general ledger is required to be submitted, except for the last invoice of the fiscal year. At that time full documentation with a general ledger is required. A budget tracker is created at the beginning of each contract start date, listing the grantee's approved budget per contract year. All invoices and expenses are tracked in this budget tracker to ensure that the grantee is not charging more than the allowed amount per grant year. Each invoice is reviewed by two members of the Lead Agency staff prior to releasing payment. c. Processes and procedures to prepare and submit required state and federal fiscal reporting. Describe: At quarter end, the fiscal Grant Manager applies these expenses to Federal Financial Reports (FFR) based on the expense category. The FFRs are then reviewed by the Grant Manager supervisor for accuracy and completeness. Upon supervisor approval, FFRs are sent to the Finance Director for final review and signature. Once signed, FFRs are certified in OLDC. 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 fiscal management ensures that MOE and Matching requirements are met and Uniform Guidance is followed. It also includes ensuring that only allowable costs are charged to grants and that State policies and procedures are met. b. How the Lead Agency measures and tracks results of their fiscal management practices. Describe: Results of fiscal management practices are tracked through report preparation and review, review of expenses and invoices, monitoring of subrecipients, and communication with partners. Furthermore, the State of Utah is subject to a single audit performed on an annual basis c. How the results inform implementation. Describe: Weaknesses identified from the single audit are reviewed and better practices are implemented. Monitoring recommendations are made to subrecipients. 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: Risk assessment is an ongoing process. Program Specialists in the Eligibility Services Division (ESD) use data from Quality Control and Performance Review case edits to identify error trends. The policies and procedures where error trends are identified are reviewed and adjusted to ensure clear guidance to help ensure staff make accurate decisions. Checks and balances have been put in place to ensure program integrity of the prospective payment process. Customers and providers are both required to report when services are not provided or a child stops attending. Licensed providers must certify monthly that they have reviewed children in their care and reported required changes through the Lead Agency's Provider Portal. This includes a child who is no longer enrolled or is enrolled and has not attended a minimum of 8 hours in a month.. When the change report results in an overpayment, a referral is automatically submitted to the Payment Error Prevention Unit to process the overpayment. Providers are required to retain attendance records for three years. Case reviews are completed by the Program Review team each month. Errors that are discovered on the case are sent to the worker to make corrections. The Program Review team follows up to ensure that errors are corrected and that benefits are accurate. Quality Control also completes case reviews on a monthly basis even in off cycle years. Cases with errors are sent to the program specialist who will work with staff to correct the case and ensure accurate benefits. Data from all case reviews is analyzed to identify error trends. Policy and procedures are reviewed and adjusted as needed to support staff in making accurate decisions. Program Specialists attend eligibility staff meetings on a regular basis to provide feedback about error trends discovered during Quality Control and case reviews. Program Specialists go over changes made and answer questions by staff to help ensure a good understanding of what is required to make accurate decisions. Program Specialists will also communicate directly with supervisors and eligibility staff to provide training and support on policy and procedures. Additionally, the Lead Agency has an Internal Audit division that identifies areas of risks for the department and requires that findings or areas of concern be addressed in a timely manner. b. The frequency of each risk assessment. Describe: Risk assessment is an ongoing process. A selection of each case workers’ decisions are reviewed monthly by the Program Review Team. Quality Control also conducts reviews monthly c. How the Lead Agency uses risk assessment results to inform program improvement. Describe: Case reviews are completed by the Program Review team each month. Errors that are discovered on the case are sent to the worker to make corrections. The Program Review team follows up to ensure that errors are corrected and that benefits are accurate. Quality Control also completes case reviews on a monthly basis even in off cycle years. Cases with errors are sent to the program specialist who will work with staff to correct the case and ensure accurate benefits. Data from all case reviews is analyzed to identify error trends. Policy and procedures are reviewed and adjusted as needed to support staff in making accurate decisions. d. How the Lead Agency knows that the risk assessment processes utilized are effective. Describe: Indications of successful risk assessment processes include a high benefit accuracy rate and reduced improper payments. 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: New eligibility staff complete a rigorous 9- week training program including training on CCDF program requirements. They receive more in depth training about child care on an ongoing basis. New staff work with a mentor on a daily basis to further reinforce the concepts learned. All eligibility staff receive ongoing training when there are changes and when error trends or a need for clarification are identified. Program Specialists attend eligibility staff meetings on a regular basis to provide feedback about error trends discovered during Quality Control and case reviews. Program specialists go over changes made and answer questions by staff to help ensure a good understanding of what is required to make accurate decisions. Program specialists will also communicate directly with supervisors and eligibility staff to provide training and support on policy and procedures. Notices of policy changes are issued as needed: The month prior to implementing subsidy policy changes, a written update is released, providing a summary of the changes and important points to eligibility staff. Additionally, supervisors or program specialists review the updates in eligibility staff meetings to ensure staff understand the changes. Lead Agency’s Office of Child Care supervisors are asked to read and review CCDF Fundamentals and/or attend training offered by ACF, OCC so that they can support and train their staff and ensure program requirements and integrity. This training is also open to all staff within the agency when available. ii. Describe how staff training is evaluated for effectiveness: When new staff start processing child care decisions, 50% of their decisions are edited for the first 2 months to ensure understanding of policy and procedure governing child care. For two additional months, 25% of their decisions are edited. All staff receive regular edits and feedback, with additional mentoring, mentoring and training provided as needed. Through the feedback process, training may be modified to ensure staff understand the concepts and implement policy correctly. Lead Agency’s Office of Child Care supervisors must audit monitoring of contracts, MOUs and grants overseen by the Lead Agency’s Office of Child Care to ensure that monitoring, evaluation and all information is documented correctly on a quarterly basis. Supervisors will offer feedback if there are changes or improvements that need to be made to ensure integrity to CCDF requirements. 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 trends discovered during Quality Control, case reviews and supervisory auditing of contracts inform needs for training and best practices. 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: Providers are required to read and sign the Lead Agency's Provider Guide terms and conditions when they become licensed. This is a requirement to accept subsidy payments. The provider guide includes an overview of a variety of topics covering program eligibility requirements, provider’s responsibilities, payment practices, overpayments and appeals processes. A resource page includes instructions on how to access the Lead Agency’s Administrative Rules. Providers are notified when substantive changes are made to the provider guide. Providers agree to any changes in the terms and conditions by logging into the Lead Agency's Provider Portal. The Lead Agency notifies providers of policy changes via email. An announcement summarizing the changes is also posted on the home page of the Lead Agency's Provider Portal. All new providers are sent an email instructing them on how to create a provider portal account and how to navigate the provider portal. A provider helpline specialist follows up with each provider to review the program requirements and expectations with them. New providers are encouraged to attend a live orientation webinar, presented monthly. Additionally, webinars are held when substantive policy changes are made that impact providers. The webinars are recorded and posted online to accommodate varying schedules. Webinars are also hosted to cover other training topics of interest. In addition, the Lead Agency's website contains many subsidy resources for providers. Providers are also referred to the Frequently Asked Questions in the Lead Agency's Provider Portal. The Lead Agency's Provider Helpline serves as a point of contact for all providers regarding subsidy issues. There is one email address where providers can contact the Lead Agency regarding policy questions or concerns. Feedback received from child care providers is shared in regular meetings with the Lead Agency's Eligibility Division and used to assess the effectiveness of policy changes Additionally, the Lead Agency meets with membership of the Utah private provider associations at least every other month to discuss various topics. Subsidy policy updates are shared with the Office of Child Care Advisory Committee, which meets every other month. ii. Describe how provider training is evaluated for effectiveness: Provider training is evaluated based on feedback received from providers and the types of questions received on the Lead Agency’s Provider Helpline on training topics. 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 improper payment data, monthly certification and change reporting data to identify trends, re-evaluate policy or determine what additional TA supports are needed to assist providers. 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: When a triennial report is completed, findings are presented to Federal partners, Lead Agency management and impacted staff. Report findings are reviewed to determine how to correct any issues. Policy and procedures may be implemented to strengthen internal weaknesses or close gaps. In some instances, system changes may be implemented. Eligibility Services works closely with the Quality Control unit to help maintain program integrity. Quality Control and Eligibility Services meet monthly to discuss causal factors causing improper payment and administrative errors to promote more accurate outcomes. Causal factor trends are tracked to determine if additional training is needed for front line staff and to develop potential system enhancements. 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: When an audit is completed, audit findings are presented with Lead Agency management and impacted staff. Audit findings are reviewed to determine how to correct the issue. Policy and procedures may be implemented to strengthen internal weaknesses or close gaps. In some instances, system changes may be implemented. The Lead Agency has an internal audit division that assists in following up on previous findings and ensuring that changes have been implemented. The Office of Child Care and Eligibility Services divisions also meet twice a month to address and evaluate the effectiveness of policy changes. 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? An internal audit identified potential internal control weaknesses. For example, the portal that providers use to verify accurate subsidy records included the monthly payment at the case level but not the payment breakdown per child. Additionally, there were no policies around standardization of attendance. Records could easily be altered. The Lead Agency addressed both of these issues. System changes were made to the portal to display each payment per child. All licensed providers are now required to use an electronic attendance tracking system that meets department requirements.