Federal Award Findings, Questioned Costs and Corrective Action Plan

Federal Award Findings, Questioned Costs and Corrective Action Plan(Reformatted from FY 2009 Single Audit Report)09-105SNAP Cluster:CFDA No.: 10.551 Supplemental Nutrition Assistance Program, #7AZ400AZ410.561 State Administrative Matching Grants for the Supplemental Nutrition AssistanceProgram, #7AZ400AZ410.561 ARRA—State Administrative Matching Grants for the Supplemental NutritionAssistance Program, #7AZ400AZ4U.S. Department of AgricultureAward Period: October 1, 2007 through September 30, 2008October 1, 2008 through September 30, 2009Special Tests and ProvisionsQuestioned Cost: $11,271FindingCriteria: In accordance with 7 CFR §273.2(a)(2), (b), and (f), the case files for food stamp recipients must supporteligibility and benefit-level determinations. Further, in accordance with 7 CFR §272.10(b)(1), a food stampsystem should be able to be updated for mass changes initiated at the state and federal levels.Condition and context: The Department of Economic Security, Division of Benefits and Medical Eligibility, didnot ensure all required documentation was included in case files for supplemental nutrition assistance recipientsand all recipient information was accurately transferred into the eligibility verification system. Specifically, for 5of 48 recipients tested, auditors noted the case files did not include rent or earned or unearned income verificationdocuments used for determining benefit amounts, which resulted in benefit overpayments of $11,271 for thebenefit period. Additionally, for 4 of 48 recipients tested, the rent or income amounts were entered incorrectlyinto the eligibility verification system; however, the benefit payments were not affected for the benefit period.Additionally, the Division did not apply automated mass updates of federal allotments and standards used forbenefit determination to all open cases. Specifically, for 1 of 48 recipients tested, auditors noted the federalmaximum allotments and standard deduction amounts stored in the eligibility verification system were notupdated to properly calculate the benefit amount, which resulted in an underpayment of $150 for the benefitperiod. This finding only affected the Supplemental Nutrition Assistance Program since the finding did not affectadministrative monies.Effect: Assistance may be granted to ineligible recipients or incorrect benefit determinations could be made thatmay result in over- or underpayments to recipients. It was not practical to extend our auditing proceduressufficiently to determine whether any additional questioned costs resulted from this finding. This finding is amaterial weakness in internal control over compliance and material noncompliance with the Cluster’s special testsand provisions requirements.Cause: The Division did not follow its policies and procedures to retain adequate verification documentation andto properly transfer recipient information into the eligibility verification system at the local offices. Further, theDivision did not have procedures in place to ensure that mass changes to federal tables stored in the eligibilityverification system were applied to all open cases.Recommendation: The Division should enforce the following procedures to help ensure compliance with specialtests and provision requirements.• Retain its supplemental nutrition assistance recipients’ verification documentation to support benefitauthorizations.8