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 VDSS is responsible for monitoring expenditures for all components of the EAP. No LDSS is reimbursed for administrative expenditures above the maximum amount allowed per state and federal regulations. DHCD requires that subgrantees enter all weatherization client data into a database. The weatherization measures installed for each client are recorded in the database. Invoices are then created and submitted through the database. The subgrantees also submit general ledgers with the invoices that are reviewed prior to processing. DHCDs records are maintained in accordance with procedures established by the Department of Accounts and are audited by the Auditor of Public Accounts. The VDSS monitors the DHCD reimbursement requests for weatherization expenditures to ensure that supporting documentation is available for review and to ensure that expenditures are in compliance with state and federal regulations. Two accounting and tracking systems, one by the EAP program and one by the VDSS Finance Division, are maintained to track revenue and disbursements for all components of the program. These two accounting and tracking systems are reconciled with the state’s financialaccounting system. 10.1a Provide your definitions of the following: Obligation An obligation is a commitment to pay a third party based on an underlying contract, such as a purchase order. A promise/commitment to pay. Expenditures An expenditure is a payment or the incurrence of a liability in exchange for goods or services. Evidence of the documentation triggered by an expenditure is a receipt or an invoice. An actual payment for your promise/commitment obligation. Expenditure timeframe Typically 90% of your awarded LIHEAP funds must be obligated in the same FFY they were received; the remaining 10% must be obligated by the end of the following FFY. In Virginia, we treat expenditures in the same manner. Administrative costs General and administrative expense is those expenditures required to administer a business. These expenses are not related to the construction or sale of goods or services. Administrative expenses will still be incurred, even in the absence of any sales or selling activity. 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. The program is audited by the Auditor of Public Accounts (APA) as required by Virginia Code. 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: EAP activities will be monitored by the grantee. VDSS staff monitors cases via the online “Pending”, “Unpaid”, and "Client Management" reports. A sampling of all case types will be randomly selected for review. Case reading reviews will be conducted and findings submitted to management at the state and local level. When necessary, LDSS will be required to develop and submit corrective action plans (CAP) for errors detected. The Virginia EAP has a strong sub-recipient monitoring plan/policy in place. Virginia is state supervised and locally administered by 120 LDSS. State staff monitors LDSS case management via various online reports. Additionally, a random sample of cases is selected and reviewed by state staff based on a predetermined schedule. Case reading reviews are scheduled/conducted based on a Risk Assessment completed for each LDSS as well as LDSS caseload size with other factors sometimes taken into consideration (i.e. staff changes, significant requests for technical assistance, etc.). Based on risk, LDSS are reviewed at least once every three years. A random sample of cases is pulled and reviewed for guidance/policy compliance, timely processing, and payment accuracy (including a secondary review of invoices and payments). Findings are reported to the LDSS via the Rushmore case monitoring system. The results are available to the LDSS Director, EAP Supervisor, Regional Director, the VDSS EAP Manager, and the Benefit Programs Division Associate Director and Director; if necessary, case correction is required and, when appropriate, a CAP is submitted by the LDSS. Additionally, a debrief is held with EAP staff and LDSS staff to review the findings. DHCD staff completes onsite administrative and financial monitoring annually for each of their subgrantees. Subgrantees are required to have an inspection of the completed WAP work done by a certified Quality Control Inspector (QCI). At least five percent of all completed units must be physically inspected by DHCD’s inspector for compliance with State and Federal standards. DHCD staff submits copies of all completed monitoring reports to VDSS EAP staff for review. Additionally, DHCD staff completes reviews of invoices and payments when their subgrantees submit invoices for payment. 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: In addition to various sub-recipient monitoring activities, each LDSS must submit a Fraud Plan annually; a Fraud Plan is required for a LDSS to receive a fraud allocation. The Fraud Plan covers multiple programs. The Fraud Plan template is attached (Attachment III). State Fraud staff conducts Fraud Program Compliance Reviews. Completed investigations are reviewed; the review focuses on the accuracy of the investigative decision. Classroom and online training is available for both new and experienced EAP workers. DHCD staff completes on-site evaluations; annual program reviews; monitoring through a central database; and client file testing/sampling for their subgrantees. 10.6 Explain, or attach a copy of your local agency monitoring schedule and protocol. In addition to the individual case monitoring completed as part of providing technical assistance and financial and case management report monitoring, EAP consultants, conduct case reading reviews for all three EAP components. Decisions on which LDSS to review are based on the completed risk assessment as well as the types and the frequency of requests for technical assistance, LDSS staff issues (new or inexperienced staff) and the Division’s commitment to case reading reviews for all of the LDSS completed during a three year schedule. Upon completion of LDSS case reading reviews, correspondence is provided within the case reading system, Rushmore. A debrief is conducted with the LDSS Director and EAP Supervisor as well as the Regional Director and the EAP Manager. Information provided will include a summary of the case reading findings, instructions on error corrections (if necessary) and information on possible trends and/or LDSS process/ organizational changes that may help reduce the errors. The number of cases reviewed per LDSS will be a minimum of 15 cases for large, 10 for medium, and 5(6) for small. Guidance for breakdown of case types is as follows: Total Fuel Crisis Cooling 15 8 3 4 10 5 2 3 6 2 2 2 The following is a list of the reports and forms used by EAP consultants for monitoring: • Unpaid Fuel/Crisis/Cooling Report • Fuel/Crisis/Cooling Pending Report • EAP Client Management Report - Case Disposition by Locality • Locality Expenditure Report • Financial Monitoring Forms – Correction of Payment Errors (COPE), Case Payment Adjustment, Affidavit on Check Endorsement, Stop Payment Request, Check Cancellation When a component is operational, all of the above listed reports are reviewed weekly. When deadlines approach (i.e. benefit determination, final check writing, etc.) reports are reviewed daily with follow up to LDSS initiated as required. Reports are monitored to ensured to ensure vendors are submitting bills and being paid promptly (unpaid reports). Initial correspondence to LDSS indicating a need for improvement (cases in pending or unpaid status for an excessive number of days) is informal, email, or phone call is sufficient. If there is a recurring problem with an individual DSS, reports with cases chronically overdue for processing or payment, the EAP consultant will work with the LDSS to improve performance. DHCD staff completes onsite administrative and financial monitoring annually for each of their subgrantees. The “Financial and Administrative Monitoring Tool” and the “Technical Monitoring Tool” are completed with each subgrantee. Although all units are inspected by the subgrantee’s own certified Quality Control Inspector at completion of the job, at least five percent of all completed units must be physically inspected by DHCD’s inspector for compliance with State and Federal standards. The requirement is ten percent when the subgrantee's energy audit and the quality control inspection are performed by the same person. 10.7. Describe how you select local agencies for monitoring reviews. Attach a risk assessment if subrecipients are utilized. Site Visits: Each EAP consultant develops a monitoring schedule to be completed during the following State Fiscal Year. (A plan for the Benefit Programs Division includes a schedule for all agencies over a three year period.) Decisions on which LDSS to review are based on the completed risk assessments, the types and the frequency of requests for technical assistance, LDSS staff issues (new or inexperienced staff), and the Division’s commitment to case reading reviews for all of the LDSS during a three year schedule. For DHCD, subgrantees visits are required annually. For VDSS, site visits are not scheduled as part of each LDSS review due to budget constraints. However, periodic site visits are conducted by VDSS if there are issues in the LDSS or if requested by the LDSS. For DHCD, subgrantee site visits are required annually. The visits rotate unless there are identified issues that trigger a review sooner thanit would normally occur. Desk Reviews: See process listed in Sections 10.5 - 10.7 for VDSS. All DHCD reviews are completed onsite annually. Monitoring through the electronic database takes place by reviewing invoices monthly. 10.8. How often is each local agency monitored? Please attach a monitoring schedule if one has been developed. Triannually 10.9. How many local agencies are currently on corrective action plans? None 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.