Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

only the federal share of the costs incurred and the remaining costs incurred by the local districts are used by the Office to meet its required state match.

The Office was unable to demonstrate that it had a system of internal controls or policies and procedures in place to ensure it had performed sufficient subrecipient monitoring activities over the local districts at a level of precision necessary to ensure that the federal funds expended by the local districts were spent in compliance with Federal statutes, regulations, and the terms and conditions of the subaward and that subaward performance goals were achieved. This would include monitoring subrecipients to ensure they had complied with federal requirements related to allowability of costs incurred, that participant eligibility was determined in accordance with federal regulations, that participants were placed with eligible foster care providers, that the source of matching funds utilized by the local districts was appropriate, and that the foster care maintenance rate utilized by the local districts for participant benefit payments was appropriate. In addition, the Office was not able to provide written policies and procedures related to subrecipient monitoring of the local district offices including procedures to ensure that the local district offices had complied with statutes, regulations, and the terms and conditions of its Federal awards for the Foster Care program. The Office conducted a “dress rehearsal” in October 2016 (state’s fiscal year ended March 31, 2017) in anticipation of an upcoming federal review that would take place in September of 2018 (during the state fiscal year March 31, 2019). As part of the dress rehearsal process, the Office selected a sample of cases across all local district offices and reviewed each case to ensure that the eligibility determination for each selected case was complete and accurate and that the participant was properly placed in an approved foster boarding home. The Office used a checklist to document the results of each case reviewed and at the end of the review (April 2017), a closure letter was sent to the local districts documenting the results of the review. As part of our testwork, a sample of 25 closure letters were selected and verified that the closure letters were sent; however, we were not provided with the documentation to support the performance of the review (i.e., case checklists) as the Office did not maintain this documentation. The Office, through its Regional Offices, performs quarterly programmatic site visits at local districts in addition to Safety Permanency Assessments (SPAs) and Voluntary Agency Reviews (VARs) over other local agencies that provide Foster Care – related services through agreements with the local district offices. During our testwork over the subrecipient monitoring process, we selected a sample of three SPAs, eight VARs and 25 quarterly site visits to review for compliance. For all sample items selected, supporting documentation provided of management’s monitoring reviews did not evidence whether or not the local districts complied with the federal requirements related to allowable costs, participant eligibility and provider eligibility, matching requirements, and the appropriateness of foster care maintenance rates. In addition to the programmatic quarterly site visits described above, the Office relies on the local districts annual single audit report for its fiscal monitoring. For 18 of the 25 subrecipient single audit reports selected for testwork, Foster Care was not determined to be a major program and the Office did not have any other verifiable evidence that it had monitored these subrecipients for compliance through its own internal subrecipient monitoring activities. Cause The condition found was primarily due to the Office not have subrecipient monitoring controls in place over the Foster Care federal program to ensure the State’s compliance with 45 CFR 75.352(d) and 45

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