Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

Lastly, 45 CFR 75.303(a), states the non-Federal entity must Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During the fiscal year ended March 31, 2018, the Department of Health (the Department) paid $1,668,670,279 of federal funding to healthcare insurance providers. The Department of Health (the Department) enters into agreements with healthcare insurance providers to provide services under the federal program to eligible individuals of the State. The Department was unable to provide its determination of the status of these providers as either contractors or subrecipients under the award as required by 45 CFR 75.351 in a timely manner. As a result, management did not identify whether the amounts presented in the State of New York Schedule of Expenditures of Federal Awards (SEFA) accurately encompassed all the amounts of pass-through to subrecipients expenditures. Additionally, documentation of the determination of the classification of these healthcare insurance providers was not finalized at the time of the Department’s preparation of the SEFA. As such management was unable to conclude and notify these providers of their classifications and the related requirements under the terms and conditions of the federal awards. Cause The condition is due to the Department not having policies, procedures, and internal controls to ensure that all provider agreements were reviewed by management in order to make a determination of classification in accordance with 45 CFR 75.351 in a timely manner. Possible Asserted Effect Failure to perform a determination of subrecipient or contractor by the Department may result in recipients of federal funding not being aware of their requirement to comply with Federal statutes, regulations, and the terms and conditions of the subaward. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None. Recommendation We recommend the Department to (1) identify all healthcare insurance provider agreements and make a determination of classification as subrecipient or contractor and notify the provider of their classification and (2) implement policies and procedures to ensure that the SEFA is accurately presented for amounts expended as pass-through to subrecipients. Views of Responsible Officials Recommendation accepted. Reference the corrective action plan for further details.

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