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HomeMy WebLinkAboutMINUTES - 09092003 - C.127 (�..A TO: BOARD OF SUPERVISORS Contra k; + k FROM: FINANCE COMMITTEE Costa CRATE: SEPTEMBER 3, 2003 County SUBJECT: STATUS OF CORRECTIVE ACTIONS ON FINDINGS EMANATING FROM THE COUNTYWIDE SINGLE AUDIT FOR THE PERIOD ENDING .DUNE 30, 2002 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. ACCEPT report prepared by the County Administrator on corrective actions taken in response to findings emanating from the Countywide Single Audit for the period ending June 30, 2002. 2. DIRECT the County Administrator to report back to the Finance Committee in December with an update on the County's compliance with requirements for periodic eligibility redetermination for County wards in faster care, and requirements of the Davis-Bacon Act pertaining to Contractors paid with federal funds. CONTINUED ON ATTACHMENT: YES.µ� .SIGNATURE:` - RECOMMENDATION OF COUNTY ADMINISTRATOR _-RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER MILLIE GREENBERG, CHAIR GAYLE 8. EIC�f� �W� ACTION OF BOARD ON Sept�r 9 n APPROVE AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT V } AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN. ABSENT: ABSTAIN: ATTESTED: SEPTEMBER 9,2003 CONTACT: TONY EDEA(925)335-1094 JOHN SWEETEN,CLERK OF THE BOARD OF CC: FINANCE COMMITTEE STAFF SUPERVISORS AND COUNTY ADMINISTRATOR COUNTY ADMINISTRATOR EMPLOYMENT AND HUMAN SERVICES DIRECTOR` COMMUNITY SERVICES DIRECTOR n GENERAL SERVICES DIRECTOR BY a DEPUTY Countywide Single Audit Findings for Period Ending June 30, 2002 September 3, 2003 Finance Committee Page 2 BACKGROUND: On August 4, 2003, our Committee received the attached report prepared by the County Administrator on corrective actions taken in response to findings emanating from the Countywide Single Audit for the period ending June 30, 2002. We are satisfied with the progress and direction of corrective actions to date, but remain concerned about the reliability of systems and procedures put in place to address some of the findings. The Finance Committee recommends, therefore, that the County Administrator provide an update in December on the County's progress in addressing issues of compliance with requirements for periodic eligibility redetermination for County wards in foster care, and requirements of the Davis-Bacon Act pertaining to contractors paid with federal funds. County of Contra Costa Office of the County Administrator MEMORANDUM DATE: July 25, 2003 - CORRECTED - TO: CORRECTED -TO: FINANCE COMMITTEE FROM: JOHN SWEETEN, County Administrator By JULIE ENEA, Senior Deputy SUBJECT: COUNTYWIDE SINGLE AUDIT FOR THE FISCAL YEAR ENDING JUNE 30, 2002 On November 8, 1999, the Board established a policy and procedure for addressing the annual findings and recommendations of the County's external auditors. The procedure directs that the Board refer the annual Single Audit findings to the Finance Committee, and that the County Administrator make a report to the Finance Committee on the current- and prior-year audit findings and recommendations that identifies what corrective action has been taken or is planned to be taken on each recommendation. Inasmuch as the current year Single Audit report encompasses all unresolved or pending audit issues from prior-year audits, this report responds directly to the current- year Single Audit report (FY ending June 30, 2002, excerpts attached for reference). Financial Reporting. Government Auditing standards require the external auditor to obtain reasonable assurance that the general-purpose financial statements are free of material misstatement. The external auditor found no reportable instances of non- compliance or internal control with regards to financial reporting. Program Requirements. Government Auditing Standards and OMB Circular A-133 (which'is applicable to federal programs) require the external auditor to report on both compliance and internal controls over the major federal programs carried out by the County. The external auditors found one reportable condition involving both compliance and internal control over compliance with OMB A-'133, but found no material weaknesses that are required to be reported. This reportable condition relates to a required six-month reinvestigation of foster care grantees, and is described in the following report. On the whole, however, the 2002 Single Audit report reflected very positively on the County. Fallowing are the auditor's recommendations, and the corrective action we have either taken or plait to take on each recommendation. Finance Committee July 25, 2003 Page 2 Countywide Single Audit Follow-up CURRENT-YEAR ISSUE Finding 02-1: Foster Dare—Title IV E Recommendation: The auditor recommends that the County strengthen its controls governing the periodic eligibility redetermination process to ensure that it is performed. In accordance with OMB Circular A-133, grantees are required to abide by the eligibility requirements as documented in the individual grant agreements of the respective programs. For the Foster Care Program, eligibility requires that a redetermination be performed every six months on participants to ensure that they still qualify for the federal program benefits. During the performance of the audit, the auditor noted that for 24 out of 40 case files selected for testing, the six-month eligibility redetermination (evidenced by Form FC2) had not been performed. This is a repeat finding from the prior year. Last year, EHSD committed to make every effort to improve eligibility determination and to keep filestforms complete and accessible. Specifically, the EHSD Foster Care Program committee, under the direction of the Program Analyst, developed a new Department Manual section (Department Memorandum leo. 158, attached) with specific worker procedures for the initiation of redetermination by Child Welfare Services staff and processing by Benefits staff. These procedures, which were effected in September 2002, were to ensure that the redetermination due date is aligned with the six month review. Since that time, EHSD has reduced the backlog of overdue reinvestigations from 1,317 to 886, approximately 33%. Despite these improved procedures, however, the auditor found that for 24 out of 40 case files selected for testing this year, the periodic six-month eligibility redetermination (Form FC2) had not been performed. Corrective Action: In response to the auditor's new finding, the department was considering tying the initiation of reinvestigations to the 6-month court review hearing as a means of ensuring that reinvestigations were done timely. Upon further consideration, however, it was determined that the court hearing date would not be completely reliable because it can be rescheduled independent of the redetermination deadline. Therefore, the department has reassigned responsibility for initiating the reinvestigations from Children's Services Program to the Foster Care Program, which is directly accountable for ensuring that the investigations occur timely. To facilitate the Finance Committee July 26, 2003 Page 3 Countywide Single Audit Follow-up timely initiation of reinvestigations, the department is evaluating whether the Foster Care Case Data System can prompt the Eligibility Worker in Foster Care to generate the reinvestigation form, and forward it to the Social Worker for review and processing. Additionally, recognizing that the current decentralization of Clerical Specialists who support the reinvestigation process may be contributing to the reinvestigation backlog, the department added a new Clerical Supervisor position under the Foster Care Program to provide central supervision of the Clerical Specialists. With a more concentrated focus on the reinvestigation backlog, the department is now monitoring not only the completion of investigations, but also the initiation of new investigations. This is expected to significantly reduce the backlog of investigations. The County Administrator's Office will continue to monitor this issue to determine if these corrective actions produce the required results. PRIOR-YEAR ISSUES ♦ Finding 01-1: Workforce Investment Act Recommendation: The County adhere to its policies over the monitoring of subrecipients to ensure that subrecipients are complying with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. Corrective Action: The WDB Executive director and the EHSD Director of Administrative Services assumed personal oversight responsibility for the monitoring of subrecipients' use of federal awards for the affected contracts. The auditors found no further incidence of missing single audit reports for the subrecipients this year. ♦ Finding 01-2: Foster Care—Title ME Recommendation: The County strengthen its controls governing the eligibility determination of the participants to ensure that proper eligibility has been determined. Also, files should be maintained and forms completed in accordance with program guidelines. Corrective Action: Despite improved procedures, a new finding from the 2003 audit indicates that this correction of this problem is still in progress. Please refer to current-year finding 02-1 for further explanation. Finding 01-3: Adoption Assistance Finance Committee July 25, 2003 Page 4 Countywide Single Audit Follow-up Recommendation: The County strengthen its controls governing the eligibility determination of the participants to ensure that proper eligibility has been determined. Also, files should be maintained and farms completed in accordance with program guidelines. Corrective Action: The Adoption Assistance Service cases have been copied and duplicate case created to serve as the new Benefits record. The "whole" record will comprise both the Service and Benefits case folders. Procedures have been developed clarifying the forms to be seat between Eligibility and Social Workers. Charts have also been developed specifying forms to be kept in Eligibility and Social Worker case folders. ♦ Finding 09-4: Head Start Recommendation: The County closely monitor the submission of certified payroll records of contractors paid with federal funds. Corrective Action: The County Administrator's Office has been directly involved in development of a cooperative procedure between the Community Services and General Services Departments to correct this deficiency. Although the new procedure is not fully in place at this point, the auditor found no instances of missing records. The CACI will continue its direct oversight of this problem until a satisfactory procedure is in place. ♦ Finding 09-5: Workforce Investment Act Recommendation: The County strengthen controls over maintaining documentation for all disbursements in order to be in compliance with OMB Circular A-933 as well as the General Provisions and Standards of Conduct of the Grant provided to all grantees. Controls over maintaining supporting documentation should be strengthened to ensure that disbursements are adequately supported. Corrective Action: The corrective action pian was implemented and all samples tested by the auditor this year included adequate supporting documentation. ♦ Finding 41-6: Workforce Investment Act Recommendation: EHSD perform timely inventory counts to ensure that equipment being used is recorded and accounted for. In addition, EHSD should implement an equipment check out system to keep track of equipment out of the office. Corrective Action: EHSD acquired bar-coding technology to simplify identification and location of its capital equipment. Additionally, the WDB Office instituted an Finance Committee July 25, 2003 Page 5 Countywide Single Audit Follow-up equipment checkout system to keep track of equipment that is borrowed from the office. As a result, all missing inventory has now been located and a sign-out sheet is required for all inventory. cc: Employment and Human Services Director Community Services Director General Services Director Principal Auditor,Auditor-Controller's Office Dorothy Sansoe,Senior Deputy County Administrator-Health&Welfare COUNTY OF CONTRA COSTA Schedule of Findings and Questioned Costs (Continued) Year :Ended June 30, 2002 Section II Financial Statement F1ndin s No matters were reported, Section III Federal Award.Finding and Questioned Costs Finding 02-1 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES .Foster Care -Title IV-E, (CFDA Number 93.658) - Eligibility Passed through the State of California, Department of Social Services Administered by the County's Employment and Human Services Department Criteria In accordance with OMB Circular A-133, grantees are required to abide by the . eligibility requirements as documented in the individual grant agreements of the respective programs. For the Foster Care program, eligibility requires that a re- determination be performed every six months on participants to ensure that they still qualify for the federal program benefits. Condition During the performance of our audit, we noted that for twenty-four out of forty, case files selected for testing, the periodic six-month eligibility re-determination (form FC2) had not been performed. This is a repeat finding from the prior year. Context and Effect By ensuring that periodic re-determinations are Performed timely, changes in income and property for the child's foster care case are reviewed to ensure that Foster Care assistance is being issued in the correct amount. Recommendation We recommend that that the County strengthen its controls governing the periodic eligibility re-determination process to ensure that it is performed. Management's We are implementing a new process intended to eliminate overdue Response reinvestigations and maintain all reinvestigations in a current status. This new process uses the court hearing date assigned to each child as the due date for the reinvestigation for that case, both coming due bi-annually. We anticipate that once we have completed a full 6-month cycle, all overdue reinvestigations will be substantially reduced or eliminated. We will continue to work with this process until we achieve the goal of no overdue reinvestigations. We will however, continue to look for new ways to consistently reinvestigate program cases every six months. _ 14 N, COUNTY OF CONTRA COSTA Summary Schedule of Prier Audit Findings Year Ended June 30, 2002 The following is the status of audit findings reported in the prior year's schedule of findings and questioned costs. Finding 01-1 U.S. DEPARTMENT OF LABOR Workforce Investment Act, CFDA Number 17.255 Passed through the State of California, Economic Development Department Administered by the County's Employment and Human Services Department(EHSD) Condition As noted in the prior year, the EHSD did not adequately monitor its subrecipients as required by OMB Circular A-133. In addition, EHSD did not have all required single audit reports on file for four of the five subrecipients we selected for testing. '{ Management's Management will pursue the missing reports, improve its filing system and ensure j Response that audit reports are kept for at least three years, The County's internal auditors have scheduled an examination of EHSD later this year and will include a review of its subrecipient monitoring practices-in their scope of work. Status Implemented. Finding 01-2 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Foster Care -Title IV-E, CFDA Number 93.658 Passed through the State of California, Department of Social Services Administered by the County's Employment and Human Services Department Condition As noted in the prior year, one out of the forty cases selected for eligibility testing did not have a current re-determination form (form FC2). In addition, one out of the forty case files selected for testing was not available. Management's Management concurs with the recommendation and will make every effort to keep Response the fileslforms complete and easy to locate. Status In progress. Eligibility re-determination continues to be a finding. See current year finding. 15 COUNTY OF CONTRA COSTA unary Schedule of Prier Audit Findings (Continued) Year Ended June 30, 2002 DEPARTMENT OF HEALTH AND HUMAN SERVICES 1'"' CFDA Number 93.659 � Ad�rption Assistance, Passed through the State of California, Department of Social Services ' Administered by the County's Employment and Human Services Department Condi turn In the prior year, as a result of performing testwork over eligibility, we noted the following, Out of the forty case files selected for testing two case files could not be located, three case files did not have current re-certifications, one case file did not have a signed Adaption Assistance Agreement, one case file was being paid at an incorrect rate, twenty-erne case files were missing the income and property checklist and seven case files were missing the health insurance form. Management's ' Management will tape steps to improve the current system of internal controls Response over eligibility. Status Implemented. The aforementioned exceptions that were noted were not discovered during the current year. Finding 01-4 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Head Start, CFDA Number 93.600 Administered by the County's Community Services Department Condition In the prior year, the Community Services Department of the County did not actively maintain records of certified payroll of contractors paid with federal funds. Management's Management will make every effort to maintain certified payroll records of Response contractors paid with federal funds. Status Implemented. The County appears to be maintaining records of certified payroll contractors paid with federal funds. COUNTY OF CONTRA COSTA Summary Schedule of Prior Audit Findings (Continued) Year Ended June 30, 2002 Finding 01-5 U.S. DEPARTMENT OF LABOR. Workforce investment Act, CFDA Number 17.255 Passed through the State of California, Economic Development Department Administered by the County's Employment and Human Services Department (EHSD) Condition In the prior year the EHSD did not maintain adequate supporting documentation for disbursements relating to the Workforce Investment Act. Out of the forty disbursements selected for testing, six disbursements did not have adequate . supporting documentation, such as invoices. Management's Management will improve its filing system to ensure that supporting Response documentation is readily accessible. Status implemented. In the current year, all samples included adequate supporting documentation. Finding 01-6 U.S. DEPARTMENT OF LABOR. Workforce investment Act, CFDA Number 17.255 Passed through the State of California, Economic Development Department Administered by the County's Employment and Human Services Department(EHSD) Condition As noted in the prior year, the EHSD did not accurately report Workforce Investment Act equipment inventory. A projector, valued at $10,213, could not be located upon our request for physical inspection. In addition, computers considered obsolete and no longer being used were still reported as current on the equipment inventory listing. :Management's Management will strengthen its equipment inventory control procedures to ensure Response that records are reliable and equipment is being used appropriately. Status implemented. All missing inventory has now been located and a sign-out sheet is required for all inventory. 17