Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

Condition During the fiscal year ended March 31, 2018, the Office of Children and Families (the Office) passed through $326,353,946 under the Child Care and Development Fund Cluster (CCDF) program (CFDA numbers 93.575 and 93.596) to local districts to provide programmatic services. As part of the funding arrangements, the local districts are responsible for determining participant eligibility for services, establishing rates to be paid on behalf of eligible participants, and ensuring that eligible participants are placed with a licensed child care provider. In addition, the local districts pay 100% of the costs incurred for these services and periodically submit requests for reimbursement to the Office for services rendered. The Office reimburses the local districts for 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 and documented policies and procedures in place to ensure that sufficient subrecipient monitoring activities were performed over the local districts during the period under audit. Such internal monitoring control procedures should be at a level of precision 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 activities to ensure that the local districts had complied with federal requirements related to the following: allowability of costs incurred, determination of participant eligibility, determination that participants were placed with approved licensed child care providers, and appropriate policies and procedures were place for fraud detection as required by 45 CFR 98. In addition, the Office was not able to demonstrate that it has written policies and procedures that describe its subrecipient monitoring policy over local district offices and was not able to demonstrate that it had sufficient means to determine whether or not the local district offices have complied with statutes, regulations and the terms and conditions of the Federal awards for the CCDF program. The Office, through the Audit Quality Control (AQC) Unit, conducted one ad hoc audit over one local district office related to the CCDF program. The AQC report issued in August of 2017 focused on cases for the period of April 2016 through September 2016. For 626 of the 1,336 files selected for testwork, the AQC Unit identified findings over the eligibility determination process and the accuracy of claims paid with a known identified error amount of $183,392. Based on the results of the review, various recommendations were made, including the need to consider providing additional training on eligibility the determination process and procedures, updating application forms to include required elements of the eligibility determination process, and consider using electronic forms instead of paper-based claim files and that the district office undertake a review and update to its system of internal controls within applications used in the eligibility determination and claiming processes to help ensure accuracy and consistency between the eligibility determination and rates claimed. A corrective action plan has been implemented, and AQC is actively monitoring the implementation of this corrective action plan. In addition to the ad hoc audit noted above, the Office relies on the local districts annual single audit report for its fiscal monitoring. For 17 of 25 subrecipient single audit reports, CCDF 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’s lack of monitoring internal controls over the Foster Care program to ensure the State’s compliance with 45 CFR 75.352(d) and 45 CFR 75.352(e). Additionally, the

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