State of Mississippi Single Audit Report for the Year Ended June 30, 2021
Summary
The State of Mississippi Single Audit Report for the year ended June 30, 2021, issued by the Mississippi Office of the State Auditor under State Auditor Shad White, with a transmittal letter dated November 11, 2022. The letter states that the audit was conducted under the Single Audit Act Amendments of 1996 and that the office issued an unmodified opinion on the financials, though multiple significant adjustments to financial reports submitted by state agencies were required. The table of contents lists audit reporting, a summary schedule of prior federal audit findings, management responses and corrective action plans, indices and acknowledgments. The independent auditor's report refers to a report on the State's financial statements dated April 8, 2022.
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- Document type
- Opinion
- Date
- 2021-06-30
Cite this document
“State of Mississippi Single Audit Report for the Year Ended June 30, 2021.”
Original at www.osa.ms.gov, dated 2021-06-30. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-06-30-fy-2021-single-audit-report-pdf/
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Single Audit for Year Ending June 30, 2021
Mississippi Oftice of the State Auditor
Shad White
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
AUDITOR
November 11, 2022
The Governor, Members of the Legislature
and Citizens of the State of Mississippi
I am pleased to finally submit the Single Audit Report of the State of Mississippi for the fiscal year ended June
20, 2021. Our audit was conducted in accordance with the requirements of the Single Audit Act Amendments
of 1996, the provisions of the Office of Management and Budget (OMB) Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (contained in Title 2 of the U.S. Code of Federal
Regulations Part 200), and the State of Mississippi's audit requirements.
The Single Audit process requires the coordination and cooperation of many state government entities. We are
particularly grateful for the efforts of the Mississippi Department of Finance and Administration in compiling
data.
While I am pleased to report that, for the thirty-third consecutive year, DFA was awarded the Government
Finance Officers Association of the United States and Canada’s Certificate of Achievement for Excellence in
Financial Reporting, it is important to note that this award is bestowed on DFA for its adherence to standards
when compiling the report, and does not consider the actual financial condition of the state.
Additionally, it is important to note that my office issued an unmodified opinion on those financials, but that in
order to do so, multiple significant adjustments to the financial reports submitted by state agencies were required.
I would encourage you to review the audit findings issued by my office and other independent CPA firms. These
audit findings are a vital part of our report as they acknowledge weaknesses existing in our state agencies that
should be addressed by management and those charged with governance.
Mississippi’s Annual Comprehensive Financial Report for fiscal year 2021 and our report thereon, dated April
8, 2022, has been issued under separate cover and is available electronically at http://www.dfa.state.ms.us/ or by
writing to the address below:
Mississippi Department of Finance and Administration
Attention: Bureau of Financial Reporting
P. O. Box 267
Jackson, MS 39205
Respectfully submitted,
SHAD WHITE
State Auditor
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
i
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STATE OF MISSISSIPPI
Fiscal Year 2021
Expenditures of Federal Awards
Education ay other by State Grantee Agency
Transportation 7%
5%
Dept Rehabilitation
Services
1%
2% Emergency Management
1%
Employment Security
17%
Military Department
1%
Finance and
Administration
12%
Health
2%
Medicaid
40%
Human Services
12%
Expenditure of Federal Awards
U.S. DEPARTMENT OF by Federal Department
U.S. EDUCATION
DEPARTMENT 5% U.S. DEPARTMENT OF
OF DEFENSE LABOR U.S. DEPARTMENT OF
TREASURY
12%
1% 15%
U.S. DEPARTMENT OF
AGRICULTURE
13%
ALL OTHER
2%
U.S. DEPARTMENT OF
TRANSPORTATION
5%
DEPARTMENT OF
HOMELAND SECURITY
3%
U.S. DEPARTMENT OF
HEALTH AND HUMAN
SERVICES
44%
STATE OF MISSISSIPPI
Fiscal Year 2021
Percentage of Major Program Assistance, by Dollars
Total Expenditures of Federal Awards $10,116,962,851
Other Programs,
$793,670,475 , 6%
Major Programs,
$11,566,843,875 , 94%
Percentage of Major Program Assistance, by Program
330 Programs
Major Programs
11%
Other Programs
89%
Billions of Dollars
14
12
10
oo
a
N
2017
STATE OF MISSISSIPPI
Fiscal Year 2021
Total Federal Financial Assistance
2018
Last 5 Fiscal Years
2019
2020
2021
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STATE OF MISSISSIPPI
SINGLE AUDIT REPORT
For the Year Ended June 30, 2021
TABLE OF CONTENTS
Page
I. AUDIT REPORTING:
Independent Auditor’s Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards ...cccccccccccccccsecsseesteceseeesecuseeeseeeseeenseesneeas 1
Independent Auditor’s Report on Compliance for Each Major Federal Program;
Report on Internal Control over Compliance; and Report on Schedule
of Expenditures of Federal Awards Required by OMB Circular A-133. 5
Schedule of Expenditures of Federal Awards
Schedule of Expenditures of Federal Awards
by State Grantee AQency......ececcccssecssecsteceteceteceseceeeeseeeeeeeeeseeses 25
Notes to the Schedule of Expenditures
Of Federal Awards .........cccccesesceseeseeeeceseceeeeeeseceeeseeeceaeeaeeeeeeaeeas 39
Schedule of Findings and Questioned Costs:
Part 1 - Summary of Auditor’s Results ......0..ccccceecccesseesseeseeeteeeteeeneenaes 47
Part 2 - Financial Statement Findings ...0...... cc ceceeseeseeeteeeneeeteeeteeeneeentes 51
Part 3 - Federal Award Findings and Questioned Costs..........::ccccesseees 77
Il. SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS:
Instructions to Management..........cccecccecsseesseeseceeseeeseeeseeeseeeseecseeeaeceaeeneenaeens 211
Index Listed by Finding Number ..........ceccecccecceesceeneeeneeeneeeseeenaecnseeneenaeens 213
vii
STATE OF MISSISSIPPI
Table of Contents (concluded)
Til.
IV.
Summary Schedules of Prior Federal Audit Findings
(Categorized by State Grantee AZency) uo... eeeeecceeseeeseeeteeeteeetseeteesees
MANAGEMENT RESPONSES AND CORRECTIVE ACTION PLANS:
Instructions to Management ..........cccccceesceesseeseeeseceseceseceseeeseeneeeseeeeeeenneeses
Management Responses and Corrective Action Plans
(Categorized by State Grantee AQency) .......cccecccesceseceseeeeeeteesteeeteeesees
INDICES:
Index of Financial Statement Findings and Responses
Financial Statement Findings and Recommendations ...................
Management Reponses and Corrective Action Plans .................4.
Index of Federal Award Findings and Questioned Costs
Listed by Federal Department ........0...eeceeeeceesececeeseeseeeeceeeeeeeeeeeseeeeeneeaes
Index of Federal Award Findings and Questioned Costs
Listed by State Grantee AQency..... ccc eecccesccesseessceeeeeeeeeeseeeseeeseeeeeenseenaes
Index of Federal Award Findings and Questioned Costs
Listed by Finding Number .00........ccecceecceseeseeeseesececeeeeeeceeeeeeeeeenseeneeeneaes
Index of Management Responses to Federal Award Findings and Corrective Action Plans
Listed by State Grantee AQency....e..ceeccceescessceseeeseeeeeeeseeeseeeteeeteeeteeesaes
Vill
239
241
343
343
345
347
349
351
353
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
AUDITOR
INDEPENDENT AUDITOR’S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
The Governor, Members of the Legislature and Citizens of the State of Mississippi
We have audited, in accordance with the auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, the financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining
fund information of the State of Mississippi (the State), as of and for the year ended June 30, 2021, and the
related notes to the financial statements which collectively comprise the State’s basic financial statements, and
have issued our report thereon dated April 8, 2022. Our report includes a reference to other auditors who audited
the financial statements of the following, as described in our report on the State of Mississippi’s financial
statements:
= Government-wide Financial Statements
e Governmental Activities
- the Department of Environmental Quality Clean Water State Revolving Loan Fund, the
Department of Health Local Governments and Rural Water Systems Improvements
Revolving Loan Fund, the State Agencies Self-Insured Workers’ Compensation Trust
Fund, Department of Public Safety, Mississippi Development Authority, Department of
Health, Department of Corrections, Mississippi State Hospital, Administrative Office of
the Courts — Supreme Court, Boswell Regional Center, Department of Mental Health and
selected funds at the Community College Board, Department of Marine Resources, and the
Department of Transportation which, in the aggregate, represent 11 percent, 15 percent,
and 13 percent, respectively, of the assets, net position, and revenues of the governmental
activities;
e Business-type Activities
- AbilityWorks, Inc. within the Department of Rehabilitation Services, the Port Authority at
Gulfport, the Mississippi Prepaid Affordable College Tuition Program, the Veterans’
Home Purchase Board, and the Department of Finance and Administration State Life and
Health Plan_which, in the aggregate, represent 63 percent, 63 percent, and 26 percent,
respectively, of the assets, net position, and revenues of the business-type activities;
e Component Units
- the Universities and the nonmajor component units.
=" Fund Financial Statements
e Governmental Funds
- the Department of Environmental Quality Clean Water State Revolving Loan Fund, the
Department of Health Local Governments and Rural Water Systems Improvements
Revolving Loan Fund, the State Agencies Self-Insured Workers’ Compensation Trust
Fund, Department of Public Safety, Mississippi Development Authority, Department of
Health, Department of Corrections, Mississippi State Hospital, Administrative Office of
the Courts — Supreme Court, Boswell Regional Center, Department of Mental Health and
selected funds at the Community College Board, Department of Marine Resources, and the
Department of Transportation, which, in the aggregate, represent 29 percent, 33 percent,
and 12 percent, respectively, of the assets, fund balance, and revenues of the governmental
activities;
e Proprietary Funds
- the Port Authority at Gulfport, the Mississippi Prepaid Affordable College Tuition
Program, and the Department of Finance and Administration State Life and Health Plan
which are considered major enterprise funds which, in the aggregate, represent 51 percent,
48 percent, and 28 percent, respectively, of the assets, fund balance, and revenues of the
proprietary funds;
e Aggregate Remaining Funds
- Nonmajor enterprise funds for AbilityWorks, Inc. within the Department of Rehabilitation
Services and the Veterans’ Home Purchase Board;
- Other Employee Benefits Trust Fund — State Life and Health Insurance Plan;
- the Pension Trust Funds;
- the Private-Purpose Trust Funds of the Mississippi Affordable College Savings Program;
all of which represent 99 percent, 100 percent, and 100 percent, respectively, of the assets, net
position, and revenues of the aggregate remaining funds.
Except for the major component unit Universities, this report includes our consideration of the results of the
other auditors’ testing of internal control over financial reporting and compliance and other matters that are
reported on separately by those auditors. However, this report, insofar as it relates to the results of the other
auditors, is based solely on the reports of the other auditors. This report does not include the results of the other
auditor’s testing of internal control over financial reporting and compliance and other matters for the major
component unit Universities that are reported on separately by those auditors.
The financial statements of the Mississippi State University Foundation, Inc., the University of Mississippi
Foundation, the University of Southern Mississippi Foundation, the University of Mississippi Medical Center
Educational Building Corporation, the University of Mississippi Medical Center Tort Claims Fund, the State
Institutions of Higher Learning Self-Insured Workers’ Compensation Fund and the State Institutions of Higher
Learning Tort Liability Fund, which were audited by other auditors upon whose reports we are relying, were
not audited in accordance with Government Auditing Standards, and accordingly this report does not include
reporting on internal control over financial reporting compliance and other matters associated with these funds
or entities.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we and other auditors considered the State of
Mississippi’s internal control over financial reporting (internal control) as a basis for designing the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the State of Mississippi’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the State of Mississippi’s
internal control.
Our and the other auditors’ consideration of internal control was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist
that have not been identified. However, as described in the accompanying “Schedule of Findings and Questioned
Costs: Part 2 — Financial Statement Findings”, we and other auditors did identify certain deficiencies in internal
control that we consider to be material weaknesses.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combinlation of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial
statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies
described in the accompanying “Schedule of Findings and Questioned Costs: Part 2 — Financial Statement
Findings” as items 2021-001, 2021-002, 2021-003, 2021-004, 2021-005, 2021-006, 2021-007, 2021-008, 2021-
009, 2021-016, 2021-017, and 2021-018 to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance. No
significant deficiencies were noted.
We and the other auditors also noted certain matters involving the internal control over financial reporting, which
we have reported to management of the applicable state agencies and institutions of the State of Mississippi in
separate communications.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the State of Mississippi’s financial statements are free
from material misstatement, we and other auditors performed tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material
effect on the financial statements. However, providing an opinion on compliance with those provisions was not
an objective of our audit, and accordingly, we do not express such an opinion.
We and the other auditors also noted certain matters which we have reported to management of the State of
Mississippi in separate communications.
Management’s Response to Finding
Management’s response to the findings identified in our audit is described in the accompanying “Management’s
Response and Corrective Action Plan” section. Management’s response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the results of that testing, and not to provide an opinion on the effectiveness of the State of Mississippi’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this
communication is not suitable for any other purpose. However, this report is a matter of public record and its
distribution is not limited.
Stephanie C. Palmertree, CPA, CGMA
Director, Financial and Compliance
Audit Division
Jackson, Mississippi
April 8, 2022
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
AUDITOR
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY UNIFORM
GUIDANCE
The Governor, Members of the Legislature
and Citizens of the State of Mississippi
Report on Compliance for Each Major Federal Program
We and other auditors have audited the State of Mississippi’s (the State) compliance with the types of
compliance requirements described in the OMB Compliance Supplement that could have a direct and
material effect on each of the State’s major federal programs except for the Veterans State Nursing Home
Care Program for the year ended June 30, 2021; and we were engaged to audit the State’s compliance with
the type of compliance requirements described in the OMB Compliance Supplement that could have a direct
and material effect on the Veterans State Nursing Home Care Program for the year ended June 30, 2021.
The State of Mississippi’s major federal programs are identified in the Summary of Auditor’s Results
section of the accompanying Schedule of Findings and Questioned Costs.
The State of Mississippi’s basic financial statements include the operations of the State’s public universities,
as a major component unit within the discretely presented component units, which expended
$1,223,604,258 in federal awards which is not included in the State’s schedule of federal awards during the
year ended June 30, 2021. Our audit, described below, did not include the operations of the public
universities because the universities component unit engaged other auditors to perform an audit in
accordance with the provisions of Uniform Guidance.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions
of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the State’s major federal programs
based on our audit of the types of compliance requirements referred to above. We did not audit the
compliance of the following major programs: National Guard Military Operations and Maintenance,
Community Development Block Grant, Immunization Cooperative Agreements, Epidemiology and
Laboratory Capacity for Infectious Disease, and Social Security Disability Insurance Cluster, which in total
represent 3.2% of the federal expenditures. Those programs were audited by other auditors whose reports
have been furnished to us, and our opinions are based solely on the report of the other auditors. This report
includes our consideration of the results of the other auditors’ testing of compliance and internal control
POST OFFICE BOX 956 . JACKSON, MISSISSIPPI 39205 . (601)576-2800 . Fax (601) 576-2650
5
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
over compliance that are reported on separately by those other auditors. However, this report, insofar as it
relates to the results of the other auditors, is based solely on the reports of the other auditors.
Except as discussed in the following paragraph, we conducted our audits of compliance in accordance with
auditing standards generally accepted in the United States of America; the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements referred to
above that could have a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about the State of Mississippi’s compliance with those requirements
and performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our adverse, qualified, and unmodified opinions on compliance
for the major federal programs. However, our audit, and the audits of other auditors, do not provide a legal
determination of the State of Mississippi’s compliance.
The scope of this audit did not include testing transactions and records from the major federal programs of
the public universities of Mississippi. The audit of those federal programs was conducted in accordance
with the provisions of Uniform Guidance, and a separate report was issued.
Summary of Opinions
ALN(s) Major Program Name Type of
Opinion
10.542 Pandemic EBT Cards Qualified
10.557 Supplemental Nutrition Assistance Program (SNAP) for | Unmodified
Women, Infants and Children (WIC)
10.558 Child and Adult Care Program Qualified
10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) Qualified
10.553, 10.555, 10.556, 10.559 | Child Nutrition Cluster Unmodified
12.401 National Guard Military Operations and Maintenance Unmodified
14.228 Community Development Block Grant Unmodified
17.225 Unemployment Insurance Adverse
21.019 Coronavirus Relief Fund Adverse
21.023 Emergency Rental Assistance Program Qualified
20.205, 20.219, 20.224 Highway Planning and Construction Cluster Qualified
64.015 Veterans State Nursing Home Care Disclaimer
84.010 Title I Grants to Local Educational Agencies Qualified
84.027, 84.173 Special Education Cluster (IDEA) Qualified
84.425C, 84.425D, 84.425R Education Stabilization Fund Qualified
93.268 Immunization Cooperative Agreements Unmodified
93.323 Epidemiology and Laboratory Capacity for Infectious | Unmodified
Disease
93.568 Low-Income Home Energy Assistance Program Qualified
93.767 Children’s Health Insurance Program (CHIP) Qualified
93.558 Temporary Assistance for Needy Families (TANF) Qualified
93.575, 93.596 Child Care Development Fund (CCDF) Cluster Qualified
93.775, 93.777, 93.778 Medicaid Cluster Qualified
97.050 Presidential Declared Disaster Assistance to Individuals | Qualified
and Households — Other Needs
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
96.001 Social Security Disability Insurance Cluster Unmodified
93.667 Social Services Block Grant Qualified
Basis for Disclaimer of Opinion on the Veterans State Nursing Home Care Program
As described in the accompanying schedule of findings and questioned costs, we were unable to obtain
audit evidence supporting the State of Mississippi’s compliance with the Reporting compliance
requirements applicable to the Veterans State Nursing Home Care Program as described in Finding 2021-
051. As aresult of this matter, we were unable to determine whether the State of Mississippi complied with
requirements applicable to the Veterans State Nursing Home Care Program.
Disclaimer of Opinion on the Veterans State Nursing Home Care Program
We do not express an opinion on the State of Mississippi’s compliance with the types of compliance
requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and
material effect on the Veterans State Nursing Home Care Program. Because of the significance of the
matter discussed in the Basis for Disclaimer of Opinion on the Veterans State Nursing Home Care Program,
we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
on compliance with the types of compliance requirements described in the OMB Compliance Supplement
that could have a direct and material effect on the Veterans State Nursing Home Care Program.
Basis for Adverse Opinion On the Coronavirus Relief Fund (CRF) and Unemployment Insurance
Program
As described in the accompanying “Schedule of Findings and Questioned Costs: Part 3 — Federal Award
Findings and Questioned Costs,” the State of Mississippi did not comply with requirements regarding the
following:
Finding # | ALN Program/Cluster Name Compliance Requirement
2021-015 | 17.225 Unemployment Insurance Eligibility
2021-022 | 17.225 Unemployment Insurance Matching, Level of Effort, Earmarking
2021-023 | 17.225 Unemployment Insurance Period of Availability of Federal Funds
2021-024 | 17.225 Unemployment Insurance Special Tests and Provisions
2021-025 | 17.225 Unemployment Insurance Special Tests and Provisions
2021-026 | 17.225 Unemployment Insurance Reporting
2021-027 | 17.225 Unemployment Insurance Special Tests and Provisions
2021-029 | 17.225 Unemployment Insurance Reporting
2021-043 | 21.019 Coronavirus Relief Fund Activities Allowed and Allowable Costs
2021-044 | 21.019 Coronavirus Relief Fund Activities Allowed and Allowable Costs
2021-045 | 21.019 Coronavirus Relief Fund Subrecipient Monitoring
2021-046 | 21.019 Coronavirus Relief Fund Activities Allowed and Allowable Costs
2021-047 | 21.019 Coronavirus Relief Fund Subrecipient Monitoring
2021-048 | 21.019 Coronavirus Relief Fund Subrecipient Monitoring
2021-049 | 21.019 Coronavirus Relief Fund Subrecipient Monitoring
2021-050 | 21.019 Coronavirus Relief Fund Activities Allowed and Allowable Costs
2021-052 | 21.019 Coronavirus Relief Fund Reporting
Compliance with such requirements is necessary, in our opinion, for the State to comply with the
requirements applicable to that program.
Adverse Opinion on Coronavirus Relief Fund (CRF) and Unemployment Insurance Program
In our opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion
paragraph, the State of Mississippi did not comply, in all material respects, with the types of compliance
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
requirements referred to above that could have a direct and material effect on the Coronavirus Relief Fund
and Unemployment Insurance Program for the year ended June 30, 2021.
Basis for Qualified Opinion on the Pandemic EBT Cards Program, Child and Adult Care Program,
Supplemental Nutrition Assistance Program (SNAP), Emergency Rental Assistance Program,
Highway Planning and Construction Cluster, Title I Grants to Local Educational Agencies Program,
Special Education Cluster (IDEA), Education Stabilization Fund, Low-Income Home Energy
Assistance Program, Children’s Health Insurance Program (CHIP), Temporary Assistance for
Needy Families (TANF) Program, Child Care Development Fund (CCDF) Cluster, Medicaid Cluster,
Presidential Declared Disaster Assistance to Individuals and Households — Other Needs, and Social
Services Block Grant
As described in the accompanying “Schedule of Findings and Questioned Costs: Part 3 — Federal Award
Findings and Questioned Costs,” the State of Mississippi did not comply with requirements regarding the
following:
Finding # | ALN Program/Cluster Name Compliance
Requirement
2021-010 | 93.558, 93.568, | Temporary Assistance for Needy Families | Reporting
93.667 (TANF), Low-Income Home _ Energy
Assistance (LIHEAP), Social Services
Block Grant
2021-011 | 10.542 Pandemic EBT Cards Reporting
2021-012 | 93.667 Social Services Block Grant Reporting
2021-013 | 10.551, 93.558, | Supplemental Nutrition Assistance | Subrecipient Monitoring
93.667, 93.575, | Program; Temporary Assistance for Needy
93.596, 93.568 | Families (TANF), Social Services Block
Grant, Child Care Development Fund
(CCDF) Cluster, Low-Income Home Energy
Assistance Program
2021-014 | 10.551, 93.558, | Supplemental Nutrition Assistance | Subrecipient Monitoring
93.667, 93.575, | Program; Temporary Assistance for Needy
93.596, 93.568 | Families (TANF), Social Services Block
Grant, Child Care Development Fund
(CCDF) Cluster, Low-Income Home Energy
Assistance Program
2021-019 | 20.205 Highway Planning and Construction Cluster | Subrecipient Monitoring
2021-020 | 20.205 Highway Planning and Construction Cluster | Subrecipient Monitoring
2021-021 | 20.205 Highway Planning and Construction Cluster | Special Tests and
Provisions
2021-028 | 97.050 Presidential Declared Disaster Assistance to | Reporting
Individuals and Households — Other Needs
2021-029 | 97.050 Presidential Declared Disaster Assistance to | Reporting
Individuals and Households — Other Needs
2021-030 | 21.023 Emergency Rental Assistance Program Reporting
2021-031 | 21.023 Emergency Rental Assistance Program Reporting
2021-032 | 21.023 Emergency Rental Assistance Program Monitoring
2021-034 | 10.558 Child and Adult Care Program Activities Allowed and
Allowable Costs
2021-035 | 84.010, Title I Grants to Local Educational | Reporting
84.425D Agencies, Education Stabilization Fund
2021-036 | 84.010 Title I Grants to Local Educational Agencies | Monitoring
8
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
2021-037 | 84.027, 84.173 | Special Education Cluster (IDEA) Monitoring
2021-038 | 84.010 Title I Grants to Local Educational Agencies | Special Tests and
Provisions
2021-039 | 93.767 Children’s Health Insurance Program | Activities Allowed and
(CHIP) Allowable Costs
2021-040 | 93.778 Medicaid Cluster Activities Allowed and
Allowable Costs
2021-041 | 93.767, 93.778 | Children’s Health Insurance Program | Eligibility
(CHIP), Medicaid Cluster
2021-042 | 93.767 Children’s Health Insurance Program | Special Tests and
(CHIP) Provisions
2021-044 | 84.425D Education Stabilization Fund Activities Allowed and
Allowable Costs
Compliance with such requirements is necessary, in our opinion, for the State of Mississippi to comply with
the requirements applicable to those programs.
Qualified Opinion on the Pandemic EBT Cards Program, Child and Adult Care Program,
Supplemental Nutrition Assistance Program (SNAP), Emergency Rental Assistance Program,
Highway Planning and Construction Cluster, Title I Grants to Local Educational Agencies Program,
Special Education Cluster (IDEA), Education Stabilization Fund, Low-Income Home Energy
Assistance Program, Children’s Health Insurance Program (CHIP), Temporary Assistance for
Needy Families (TANF) Program, Child Care Development Fund (CCDF) Cluster, Medicaid Cluster,
Presidential Declared Disaster Assistance to Individuals and Households — Other Needs, and Social
Services Block Grant.
In our opinion, except for the noncompliance described in the Basis for Qualified Opinion paragraph, the
State of Mississippi complied, in all material respects, with the types of compliance requirements referred
to above that could have a direct and material effect on the Pandemic EBT Cards Program, Child and Adult
Care Program, Supplemental Nutrition Assistance Program (SNAP), Emergency Rental Assistance
Program, Highway Planning and Construction Cluster, Title I Grants to Local Educational Agencies
Program, Special Education Cluster (IDEA), Education Stabilization Fund, Low-Income Home Energy
Assistance Program, Children’s Health Insurance Program (CHIP), Temporary Assistance for Needy
Families (TANF) Program, Child Care Development Fund (CCDF) Cluster, Medicaid Cluster, Presidential
Declared Disaster Assistance to Individuals and Households — Other Needs, and Social Services Block
Grant for the year ended June 30, 2021.
Unmodified Opinion on Each of the Other Major Federal Programs
In our opinion, based on our audit and the reports of other auditors, the State complied, in all material
respects, with the types of compliance requirements referred to above that could have a direct and material
effect on each of its other major federal programs identified in the Summary of Auditor’s Results section
of the accompanying Schedule of Findings and Questioned Costs for the year ended June 30, 2021. We
did not test the transactions and records of the major federal programs administered by the state’s public
universities for compliance with any requirements referred to above to determine the effects of such
noncompliance, if any.
Other Matters
The results of our auditing procedures disclosed one other instance of noncompliance, which is required to
be reported in accordance with the Uniform Guidance and which is described in the accompanying
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
“Schedule of Findings and Questioned Costs: Part 3 - Federal Award Findings and Questioned Costs” as
item 2021-033. Our opinion on each major federal program is not modified with respect to this matter.
The responses by state agencies to the noncompliance findings identified in our audit, and the audits of
other auditors, are described in the accompanying “Section HI - Management Responses and Corrective
Action Plans.” Management’s responses were not subjected to the auditing procedures applied in the audit
of compliance and, accordingly, we express no opinion on the responses.
We also noted other immaterial instances of noncompliance which have been reported to management of
the State of Mississippi in separate communications.
Report on Internal Control Over Compliance
The management of the State of Mississippi is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above.
In planning and performing our audit of compliance, we considered the State’s internal control over
compliance with the types of requirements that could have a direct and material effect on each major federal
program to determine the auditing procedures that are appropriate in the circumstances for the purpose of
expressing an opinion on compliance for each major federal program and to test and report on internal
control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing
an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an
opinion on the effectiveness of the State’s internal control over compliance. We excluded the federal
programs of the State’s public universities, as discussed in the second paragraph of this report.
Our consideration of internal control over compliance was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control over compliance
that might be material weaknesses or significant deficiencies and therefore, material weaknesses or
significant deficiencies may exist have not been identified. However, as discussed below, we did identify
certain deficiencies in internal control over compliance that we consider to be material weaknesses and
significant deficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a deficiency,
or a combination of deficiencies, in internal control over compliance, such that there is a reasonable
possibility that material noncompliance with a type of compliance requirement of a federal program will
not be prevented, or detected and corrected, on a timely basis. We and the other auditors consider the
deficiencies in internal control over compliance described in the accompanying “Schedule of Findings and
Questioned Costs: Part 3 - Federal Award Findings and Questioned Costs” as items 2021-010, 2021-011,
2021-013, 2021-014, 2021-015, 2021-019, 2021-020, 2021-022, 2021-023, 2021-024, 2021-025, 2021-026,
2021-027, 2021-028, 2021-029, 2021-030, 2021-031, 2021-032, 2021-034, 2021-035, 2021-036, 2021-037,
2021-039, 2021-041, 2021-042, 2021-043, 2021-044, 2021-045, 2021-046, 2021-047, 2021-048, 2021-049,
2021-050, 2021-051 and 2021-052 to be material weaknesses.
A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal program
that is less severe than a material weakness in internal control over compliance, yet important enough to
merit attention by those charged with governance. We consider the deficiencies in internal control over
compliance described in the accompanying “Schedule of Findings and Questioned Costs: Part 3 — Federal
10
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
Award Findings and Questioned Costs” as items 2021-012, 2021-2021, 2021-033, 2021-038, and 2021-040
to be significant deficiencies.
The responses by state agencies to the internal control over compliance findings identified in our audit are
described in the accompanying “Section III - Management Responses and Corrective Action Plans.”
Management’s responses were not subjected to the auditing procedures applied in the audit of compliance
and, accordingly, we express no opinion on the responses.
We also noted other matters involving internal control over compliance and its operation, which have been
reported to management of the State of Mississippi in separate communications.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose. However, this report is matter of
public record and its distribution is not limited.
Report on Schedule of Expenditures of Federal Awards Required by Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund
information of the State of Mississippi as of and for the year ended June 30, 2021, and the related notes to
the financial statements, which collectively comprise the State of Mississippi’s basic financial statements.
We issued our report thereon dated April 8, 2022 which contained unmodified opinions on those financial
statements. We did not audit the financial statements of:
= Government-wide Financial Statements
e Governmental Activities
- the Department of Environmental Quality Clean Water State Revolving Loan Fund,
the Department of Health Local Governments and Rural Water Systems Improvements
Revolving Loan Fund, the State Agencies Self-Insured Workers’ Compensation Trust
Fund, Department of Public Safety, Mississippi Development Authority, Department
of Health, Department of Corrections, Mississippi State Hospital, Administrative
Office of the Courts — Supreme Court, Boswell Regional Center, Department of Mental
Health and selected funds at the Community College Board, Department of Marine
Resources, and the Department of Transportation which, in the aggregate, represent 11
percent, 15 percent, and 13 percent, respectively, of the assets, net position, and
revenues of the governmental activities;
e Business-type Activities
- AbilityWorks, Inc. within the Department of Rehabilitation Services, the Port
Authority at Gulfport, the Mississippi Prepaid Affordable College Tuition Program,
the Veterans’ Home Purchase Board, and the Department of Finance and
Administration State Life and Health Plan which, in the aggregate, represent 63
percent, 63 percent, and 26 percent, respectively, of the assets, net position, and
revenues of the business-type activities;
11
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
e Component Units
the Universities and the nonmajor component units.
Fund Financial Statements
e Governmental Funds
the Department of Environmental Quality Clean Water State Revolving Loan Fund,
the Department of Health Local Governments and Rural Water Systems Improvements
Revolving Loan Fund, the State Agencies Self-Insured Workers’ Compensation Trust
Fund, Department of Public Safety, Mississippi Development Authority, Department
of Health, Department of Corrections, Mississippi State Hospital, Administrative
Office of the Courts — Supreme Court, Boswell Regional Center, Department of Mental
Health and selected funds at the Community College Board, Department of Marine
Resources, and the Department of Transportation, which, in the aggregate, represent
29 percent, 33 percent, and 12 percent, respectively, of the assets, fund balance, and
revenues of the governmental activities;
e Proprietary Funds
the Port Authority at Gulfport, the Mississippi Prepaid Affordable College Tuition
Program, and the Department of Finance and Administration State Life and Health
Plan which are considered major enterprise funds which, in the aggregate, represent 51
percent, 48 percent, and 28 percent, respectively, of the assets, fund balance, and
revenues of the proprietary funds;
e Aggregate Remaining Funds
Nonmajor enterprise funds for AbilityWorks, Inc. within the Department of
Rehabilitation Services and the Veterans’ Home Purchase Board;
Other Employee Benefits Trust Fund — State Life and Health Insurance Plan;
the Pension Trust Funds;
the Private-Purpose Trust Funds of the Mississippi Affordable College Savings
Program;
all of which represent 99 percent, 100 percent, and 100 percent, respectively, of the assets,
net position, and revenues of the aggregate remaining funds.
Those statements were audited by other auditors whose reports have been furnished to us; and our opinions,
insofar as they relate to the amounts included for those agencies, funds, and component units, are based
solely on the reports of the other auditors.
The State of Mississippi has excluded federal programs administered by public universities from the
accompanying schedules of expenditures of federal awards, as more fully described in Note 2 to the
12
Independent Auditor’s Report on Compliance For Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on Schedule of
Expenditures of Federal Awards Required by Uniform Guidance
schedules. The State’s public universities were audited in accordance with statutory requirements and the
provisions of Uniform Guidance, and a separate report was issued.
Our audit and the audits of the other auditors were conducted for the purpose of forming our opinions on
the financial statements that collectively comprise the State of Mississippi’s basic financial statements. The
accompanying Schedule of Expenditures of Federal Awards by Federal Department is presented for
purposes of additional analysis as required by the Uniform Guidance and is not a required part of the
financial statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the financial statements.
The information in the schedule of expenditures of federal awards has been subjected to the auditing
procedures applied by us and other auditors in the audit of the financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, based upon our audit and the audit reports of the other
auditors, except for the effects of the omission described in the preceding paragraph, the schedule of
expenditures of federal awards is fairly stated in all material respects in relation to the basic financial
statements as a whole.
Stephanie C. Palmertree, CPA, CGMA
Deputy State Auditor
Audit Division
Jackson, Mississippi
November 11, 2022
13
(This page left blank intentionally.)
Schedule of Expenditures of Federal Awards by
Federal Department
(This page left blank intentionally.)
10.025
10.069
10.163
10.170
10.351
10.475
10.542
10.557
10.557
10.558
10.560
10.578
10.579
10.580
10.582
10.664
10.902
10.904
10.912
10.916
10.923
10.950
10.551
10.561
10.553
10.555 @
10.555 @
10.556
10.559 @
10.565
10.568
10.568
10.569 @
10.665
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Program Name
U.S. DEPARTMENT OF AGRICULTURE
Plant and Animal Disease, Pest Control, and Animal Care
Soil and Water Conservation
Market Protection and Promotion
Specialty Crop Block Grant Program — Farm Bill
Rural BusinessDevelopment Grant
Cooperative Agreements with States for Intrastate Meat
Pandemic EBT — Food Benefits
Special Supplemental Nutrition Program for Women, Infants, and Children
COVID-19 Special Supplemental Nutrition Program for Women, Infants, and Children
Total Special Supplemental Nutrition Program for Women, Infants, and Children
Child and Adult Care Food Program
State Administrative Expenses for Child Nutrition
WIC Grants To States (WGS)
Child Nutrition Discretionary Grants Limited Availability
Supplemental Nutrition Assistance Program Process and Technology Improvement
Grants
Fresh Fruit and Vegetable Program
Cooperative Forestry Assistance
Soil and Water Conservation
Soil and Water Conservation
Soil and Water Conservation
NRCS Watershed Rehabilitation Program
Emergency Watershed Protection Program
Agricultural Statistics Reports
SNAP Cluster
Supplemental Nutrition Assistance Program (SNAP)
State Administrative Matching Grants for the Supplemental Nutrition Assistance
Program
Total SNAP Cluster
Child Nutrition Cluster
School Breakfast Program (SBP)
National School Lunch Program (NSLP)
COVID-19 National School Lunch Program
Total NSLP
Special Milk Program for Children (SMP)
Summer Food Service Program for Children (SFSPC)
Total Child Nutrition Cluster
Food Distribution Cluste1
Commodity Supplemental Food Program
Emergency Food Assistance Program (Administrative Costs)
COVID-19 Emergency Food Assistance Program (Administrative Costs)
Total Emergency Food Assistance Program (Administrative Costs)
Emergency Food Assistance Program (Food Commodities)
Total Food Distribution Cluster
Forest Service Schools and Roads Cluster
Schools and Roads - Grants to States
Total Forest Service Schools and Roads Cluster
TOTAL U.S. DEPARTMENT OF AGRICULTURE
15
See accompanying Notes to the Schedules of Expenditures of Federal Awards
1,542,026,748
Amount
COVID-19 Federal Passed to
Delineation Expenditures Subrecipients
543,095 -
1,247,329 -
32,000 -
319,650 224,875
40,000 -
1,156,162 -
60,868,465 -
80,969,050 2,275,874
6,780,847 -
87,749,897
35,071,892 35,071,892
4,512,036 -
1,051,360 -
145,935 145,935
233,852 -
1,848,801 1,848,801
2,494,732 -
1,197,604 -
705,882 -
4,176,000 405,871
752,982 -
59,178 -
12,500 -
998,964,965 -
35,770,008 6,250,274
1,034, 734,973
921,463 921,463
22,093,870 2,961,046
20,063,622 20,063,622
42,157,492
2,474 2,474
244,987,129 244,987,129
288,068,558
874,159 874,159
1,533,922 534,360
428,190 428,190
1,962,112
7,808,425 -
10,644,696
4,359,169 -
4,359,169
11.407
11.419
11.420
11.434
11.454
11.557
12.002
12.005
12.113
12.400
12.401
12.404
14.228
14.900
15.250
15.252
15.608
15.615
15.622
15.630
15.634
15.657
15.810
15.904
15.916
15.922
15.928
15.939
15.980
15.981
15.605
15.611
15.626
16.017
16.034
16.320
16.540
16.543
16.554
16.575
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
COVID-19
Delineation
Program Name
Federal
Expenditures
Amount
Passed to
Subrecipients
U.S. DEPARTMENT OF COMMERCE
Inter jurisdictional Fisheries Act of 1986
Coastal Zone Management Administration Awards
Coastal Zone Management Estuarine Research Reserves
Cooperative Fishery Statistics
Unallied Management Projects
Broadband Technology Opportunities Program
TOTAL U.S. DEPARTMENT OF COMMERCE
U.S. DEPARTMENT OF DEFENSE
Procurement Technical Assistance For Business Firms
Conservation and Rehabilitation of Natural Resources on Military Installations
State Memorandum of Agreement Program for the Reimbursement of Technical
Services
Military Construction, National Guard
National Guard Military Operations and Maintenance (O&M) Projects
National Guard ChalleNGe Program
TOTAL U.S. DEPARTMENT OF DEFENSE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Community Development Block Grants / State's Program
Lead-Based Paing Hazard Control in Privately-Owned Housing
TOTAL U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
U.S. DEPARTMENT OF THE INTERIOR
Regulation of Surface Coal Mining and Surface Effects of Underground Coal Mining
Abandoned Mine Land Reclamation (AMLR) Program
Fish and Wildlife Management Assistance
Cooperative Endangered Species Conservation Fund
Sportfishing and Boating Safety Act
Coastal Program
State Wildlife Grants
Endangered Species Conservation — Recovery
National Cooperative Geologic Mapping Program
Historic Preservation Fund Grants-In-Aid
Outdoor Recreation — Acquisition, Development and Planning
Native American Graves Protection and Repatriation Act
Civil War Battlefield Land Acquisition Grants
National Heritage Area Federal Financial Assistance
National Ground-Water Monitoring Network
Water Use and Data Research
Fish and Wildlife Cluster
Sport Fish Restoration Program
Wildlife Restoration and Basic Hunter Education
Enhanced Hunter Education and Safety
Total Fish and Wildlife Cluster
TOTAL U.S. DEPARTMENT OF THE INTERIOR
U.S. DEPARTMENT OF JUSTICE
Sexual Assault Services Formula Program
Coronavirus Emergency Supplemental Funding
Services for Trafficking Victims
Juvenile Justice and Delinquency Prevention — Allocation to States
Missing Children’s Assistance
National Criminal History Improvement Program (NCHIP)
Crime Victim Assistance
16
See accompanying Notes to the Schedules of Expenditures of Federal Awards
166,365
1,214,909
625,455
496,680
298,514
4,879,126
7,681,049
351,867
1,469,844
86,347
2,247,857
101,119,053
4,609,896
109,884,864
43,043,731
95,697
43,139,428
182,626
46,172
75,810
223,859
97,971
1,267
30,047
249,333
72,888
793,371
228,015
34,957
795,495
204,944
25,699
2,155
5,044,788
4,710,168
64,334
9,819,290
12,883,899
276,532
451,971
282,351
202,483
355,355
396,210
19,447,843
6,468,569
10,684
198,776
319,532
52,898
6,541,073
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Amount
COVID-19 Federal Passed to
ALN Program Name Delineation Expenditures Subrecipients
16.576 Crime Victim Compensation 1,343,692 -
16.588 Violence Against Women Formula Grants 456,642 324,335
16.593 Residential Substance Abuse Treatment for State Prisoners 136,879 136,879
16.606 State Criminal Alien Assistance Program 5,349 -
16.609 Project Safe Neighborhoods 73,101 72,677
16.734 Special Data Collections and Statistical Studies 43,001 -
16.735 PREA Program: Strategic Support for PREA Implementation 6,989 6,989
16.738 Edward Byrne Memorial Justice Assistance Grant Program 1,564,367 1,564,367
16.741 DNA Backlog Reduction Program 852,059 -
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program 190,731 184,019
16.751 BJA PREA Program 45,578 45,578
16.754 Harold Rogers Prescription Drug Monitoring Program 715,253 138,583
16.812 Second Chance Act Reentry Initiative 238,902 145,077
16.816 John R. Justice Prosecutors and Defenders Incentive Act 36,100 -
16.838 Comprehensive Opioid, Stimulant, and Substance Abuse Program 10,528 -
16.922 Equitable Sharing Program 381,856 -
16.UN1 DEA Task Force 322,053 -
TOTAL U.S. DEPARTMENT OF JUSTICE 27,835,825
U.S. DEPARTMENT OF LABOR
17.002 Labor Force Statistics 697,752 -
17.225 # Unemployment Insurance 1,832,725,521 -
17.225# COVID-19 Unemployment Insurance 23,140,422 -
Total Unemployment Insurance 1,855,865,943
17.235 Senior Community Service Employment Program 925,736 -
17.245 Trade Adjustment Assistance 138,176 -
17.271 Work Opportunity Tax Credit Program (WOTC) 397,415 -
17.273 Temporary Labor Certification for Foreign Workers 192,992 -
17.277 Workforce Investment Act (WIA) National Emergency Grants 1,333,257 -
17.277 COVID-19 Workforce Investment Act (WIA) National Emergency Grants 1,811,383 -
Total Workforce Investment Act (WIA) National Emergency Grants 3,144,640
17.285 Apprenticeship USA Grants 805,730 -
17.600 Mine Health and Safety Grants 48,738 -
Employment Service Cluster
17.207 Employment Service / Wagner-Peyser Funded Activities 5,783,243 -
17.801 Disabled Veterans’ Outreach Program (DVOP) 1,150,727 -
Total Employment Service Cluster 6,933,970
WIOA Cluster
17.258 WIA Adult Program 10,567,879 -
17.259 WIA Youth Activities 10,059,297 -
17.278 WIA Dislocated Worker Formula Grants 14,300,751 -
Total WIOA Cluster 34,927,927
TOTAL U.S. DEPARTMENT OF LABOR 1,904,079,019
U.S. DEPARTMENT OF TRANSPORTATION
20.200 Highway Research and Development Program 154,079 -
20.218 National Motor Carrier Safety 3,553,508 -
20.232 Commercial Driver's License Program Improvement Grant 282,223 -
20.237 Fed Aviation Adm-FAA 394,477 -
20.505 Fed Transit Auth-FTA 329,447 -
20.509 Formula Grants for Rural Areas 3,417,979 1,898,302
20.509 COVID-19 Formula Grants for Rural Areas 23,948,289 23,678,684
Total Formula Grants for Rural Areas 27,366,268
20.614 Fatality Analysis Reporting System 90,081 -
20.615 E-911 Grant Program 56,004 -
20.700 Pipeline Safety Program Base Grant 435,274 -
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants 236,811 -
20.720 Damage Prevention 31,810 -
20.933 National Infrastructure Investments 17,334,842 -
(continued) 7
See accompanying Notes to the Schedules of Expenditures of Federal Awards
20.205
20.219
20.224
20.513
20.516
20.526
20.600
21.015
21.019
21.023
21.026
23.002
23.011
45.025
45.130
45.149
45.310
45.310
59.061
64.015
64.124
64.203
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
COVID-19
Program Name Delineation
Federal
Expenditures
Amount
Passed to
Subrecipients
Highway Planning and Construction Cluster
Highway Planning and Construction
Recreational Trails Program
Federal Lands Access Program
Total Highway Planning and Construction Cluster
Transit Services Programs Cluster
Enhanced Mobility for Seniors and Individuals with Disabilities
Job Access and Reverse Commute Program
Total Transit Services Programs Cluster
Federal Transit Cluster
Bus and Bus Facilities Formula Program
Total Federal Transit Cluster
Highway Safety Cluster
State and Community Highway Safety
Total Highway Safety Cluster
TOTAL U.S. DEPARTMENT OF TRANSPORTATION
U.S. DEPARTMENT OF THE TREASURY
Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived
Economies of the Gulf Coast
Coronavirus Relief Fund
Emergency Rental Assistance Program
Homeowner Assistance Fund
TOTAL U.S. DEPARTMENT OF THE TREASURY
APPALACHIAN REGIONAL COMMISSION
Appalachian Area Development
Appalachian Research, Technical Assistance, and Demonstration Projects
TOTAL APPALACHIAN REGIONAL COMMISSION
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
Promotion of the Arts - Partnership Agreements
Promotion of the Humanities Challenge Grants
Promotion of the Humanities — Division of Preservation Access
Grants to States
COVID-19 Grants to States
Total Grants to States
1,615,562
248,651
TOTAL NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
SMALL BUSINESS ADMINISTRATION
State Trade and Export Promotion Pilot Grant Program
TOTAL SMALL BUSINESS ADMINISTRATION
U.S. DEPARTMENT OF VETERANS AFFAIRS
Veterans State Nursing Home Care
All Volunteer Force Educational Assistance
Veterans Cemetary Grants Program
TOTAL U.S. DEPARTMENT OF VETERANS AFFAIRS
18
See accompanying Notes to the Schedules of Expenditures of Federal Awards
582,922,727
607,334
1,902,705
585,432,766
1,294,479
143,271
1,437,750
3,313,755
3,313,755
7,445,018
7,445,018
647,894,113
15,534,198
1,197,036,436
244,821,665
7,228,168
1,464,620,467
6,965,822
130,712
7,096,534
764,515
6,578
90,242
1,864,213
2,725,548
371,626
371,626
41,645,808
133,521
1,568,708
43,348,037
1,294,479
123,550
2,423,160
6,178,114
13,319,108
1,012,523,289
244,821,665
758,815
236,976
244,604
66.032
66.034
66.040
66.202
66.204
66.419
66.432
66.433
66.454
66.460
66.461
66.472
66.605
66.608
66.701
66.707
66.708
66.802
66.804
66.805
66.809
66.458
66.468
81.041
81.136
84.002
84.010
84.011
84.013
84.048
84.126
84.144
84.177
84.181
84.187
84.196
84.287
84.305
84.323
84.358
84.365
84.367
84.368
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Program Name
ENVIRONMENTAL PROTECTION AGENCY
State Indoor Radon Grants
Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose
Activities Relating to the Clean Air Act
State Clean Diesel Grant Program
Congressionally Mandated Projects
Multipurpose Grants to States and Tribes
Water Pollution Control State, Interstate, and Tribal Program Support
State Public Water System Supervision
State Underground Water Source Protection
Water Quality Management Planning
Nonpoint Source Implementation Grants
EPA Wetlands Program Development
Beach Monitoring and Notification Program Implementation Grants
Performance Partnership Grants
Environmental Information Exchange Network Grant Program and Related Assistance
Toxic Substances Compliance Monitoring Cooperative Agreements
TSCA Title IV State Lead Grants Certification of Lead-Based Paint Professionals
Pollution Prevention Grants Program
Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative
Agreements
Underground Storage Tank Prevention, Detection and Compliance Program
Leaking Underground Storage Tank Trust Fund Corrective Action Program
Superfund State and Indian Tribe Core Program Cooperative Agreements
Clean Water State Revolving Fund Cluster
Capitalization Grants for Clean Water State Revolving Funds
Total Clean Water State Revolving Fund Cluster
Drinking Water State Revolving Fund Cluster
Capitalization Grants for Drinking Water State Revolving Funds
Total Drinking Water State Revolving Fund Cluster
TOTAL ENVIRONMENTAL PROTECTION AGENCY
U.S. DEPARTMENT OF ENERGY
State Energy Program
DOE Salmon Testing Site
TOTAL U.S. DEPARTMENT OF ENERGY
U.S. DEPARTMENT OF EDUCATION
Adult Education — Basic Grants to States
Title | Grants to Local Educational Agencies
Migrant Education — State Grant Program
Title | State Agency Program for Neglected and Delinquent Children and Youth
Career and Technical Education — Basic Grants to States
Rehabilitation Services — Vocational Rehabilitation Grants to States
Migrant Education — Coordination Program
Rehabilitation Services — Independent Living Services for Older Individuals Who are
Blind
Special Education — Grants for Infants and Families
Supported Employment Services for Individuals with the Most Significant Disabilities
Education for Homeless Children and Youth
Twenty-First Century Community Learning Centers
Education Research, Development and Dissemination
Special Education — State Personnel Development
Rural Education
English Language Acquisition State Grants
Improving Teacher Quality State Grants
Competitive Grants for State Assessments
19
See accompanying Notes to the Schedules of Expenditures of Federal Awards
COVID-19
Delineation
Federal
Expenditures
Amount
Passed to
Subrecipients
24,714
382,844
88,847
4,179
49,642
97,791
1,763,973
47,475
148,276
1,474,198
46,535
234,858
6,882,359
91,390
115,927
293,451
37,191
65,759
267,052
651,903
42,656
9,916,957
9,916,957
11,790,158
11,790,158
34,518,135
554,894
146,175
701,069
4,454,494
203,159,011
835,649
226,113
13,183,705
48,452,940
36,000
274,137
3,408,479
180,172
1,295,518
7,757,183
82,416
707,307
5,369,664
1,627,975
25,995,295
498,104
200,393,595
828,048
222,626
11,978,201
269,598
1,147,883
7,456,941
706,924
5,112,129
1,580,732
25,452,204
ALN.
84.369
84.372
84.377
84.424
84.425C
84.425D
84.425R
84.426
84.938
84.027
84.173
87.051
87.052
90.404
90.404
93.041
93.042
93.042
93.043
93.048
93.052
93.052
93.069
93.071
93.072
93.074
93.079
93.092
93.103
93.104
93.110
93.116
93.118
93.127
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Program Name
Grants for State Assessments and Related Activities
Statewide Data Systems
School Improvement Grants
Title IV-SSAE State Activities
Governor's Emergency Education Relief
Elementary and Secondary Emergency Relief Fund
Coronavirus Response and Relief Supplemental Appropriation Act
Total ESSER
Randolph-Sheppard - Financial Relief and Restoration Payments
Temporary Emergency Impact Aid for Displaced Students
Special Education Cluster (IDEA)
Special Education — Grants to States (IDEA, Part B)
Special Education — Preschool Grants (IDEA, Preschool)
Total Special Education Cluster (IDEA)
TOTAL U.S. DEPARTMENT OF EDUCATION
GULF COAST ECOSYSTEM RESTORATION COUNCIL
Gulf Coast Ecosystem Restoration Council Comprehensive Plan Component Program
Gulf Coast Ecosystem Restoration Council Oil Spill Impact Program
TOTAL GULF COAST ECOSYSTEM RESTORATION COUNCIL
ELECTION ASSISTANCE COMMISSION
2018 HAVA Election Security Grant
COVID-19 2018 HAVA Election Security Grant
Total 2018 HAVA Election Security Grant
TOTAL ELECTION ASSISTANCE COMMISSION
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Special Programs for the Aging — Title VII, Chapter 3 - Programs for Prevention of Elde
Abuse, Neglect, and Exploitation
Special Programs for the Aging — Title VII, Chapter 2 - Long-Term Care Ombudsman
Services for Older Individuals
COVID-19 Special Programs for the Aging — Title VII, Chapter 2 - Long-Term Care
Ombudsman Services for Older Individuals
Total Special Programs for the Aging — Title VII, Chapter 2 - Long-Term Care
Ombudsman Services for Older Individuals
Special Programs for the Aging — Title III, Part D—- Disease Prevention and Health
Promotion Services
Special Programs for the Aging, Title IV, and Title Il, Discretionary Projects
National Family Caregiver Support, Title Ill, Part E
COVID-19 National Family Caregiver Support, Title Ill, Part E
Total National Family Caregiver Support, Title Ill, Part E
Public Health Emergency Preparedness
Medicare Enrollment Assistance Program
Lifespan Respite Care Program
Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness
(PHEP) Aligned Cooperative Agreements
Cooperative Agreements to Promote Adolescent Health through School-Based
HIV/STD Prevention and School-Based Surveillance
Affordable Care Act (ACA) Personal Responsibility Education Program
Food and Drug Administration — Research
Comprehensive Community Mental Health Services for Children with Serious Emotione
Disturbances (SED)
Maternal and Child Health Federal Consolidated Programs
Project Grants and Cooperative Agreements for Tuberculosis Control Programs
Acquired Immunodeficiency Syndrome (AIDS) Activity
Emergency Medical Services for Children
20
See accompanying Notes to the Schedules of Expenditures of Federal Awards
Amount
COVID-19 Federal Passed to
Delineation Expenditures Subrecipients
6,913,218 -
1,804,150 -
2,562,825 2,449,340
13,864,909 13,337,485
18,734,453 18,734,453
121,925,341 120,532,241
1,100,809 1,515,248
141,760,603
419,263 -
5,436 572
123,110,604 112,793,694
4,030,684 4,030,684
127,141,288
612,015,854
1,156,505 66,583
2,513,306 308,614
3,669,811
1,585,544 1,585,544
1,869,423 1,026,365
3,454,967
3,454,967
28,604 28,604
61,039 51,041
132,128 119,926
193,167
124,275 124,275
221,617 84,717
912,421 912,421
572,683 537,276
1,485,104
5,302,576 -
301,242 150,062
48,923 5,735
44,084 -
74,420 -
428,794 96,951
580,723 -
2,336,508 1,800,230
737,611 666,678
628,240 -
188,114 117,673
91,352 -
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
ALN Program Name
Cooperative Agreements to States / Territories for the Coordination and Development of
Primary Care Offices
93.136 Injury Prevention and Control Research and State and Community Based Programs
93.136 COVID-19 Injury Prevention and Control Research and State and Community Based
, Programs
Total Injury Prevention and Control Research and State and Community Based
Programs
93.137 Impact of Preschool Obesity Prevention Curriculum Enhanced with Positive Behavioral
93.150 Projects for Assistance in Transition from Homelessness (PATH)
93.197 Childhood Lead Poisoning Prevention Projects, State and Local Childhood Lead
, Poisoning Prevention and Surveillance of Blood Levels in Children
93.217 Family Planning — Services
93.235 Affordable Care Act (ACA) Abstinence Education Program
93.236 Grants to States to Support Oral Health Workforce Activities
93.241 State Rural Hospital Flexibility Program
93.243 Substance Abuse and Mental Health Services — Projects of Regional and National
, Significance
93.251 Universal Newborn Hearing Screening
93.262 Occupational Safety and Health Program
93.268 Immunization Cooperative Agreements
93.268 COVID-19 Immunization Cooperative Agreements
Total Immunization Cooperative Agreements
93.270 Adult Viral Hepatitis Prevention and Control
93.283 Centers for Disease Control and Prevention - Investigations and Technical Assistance
93.296 State Partnership Grant Program to Improve Minority Health
93.301 Small Rural Hospital Improvement Grant Program
93.301 COVID-19 Small Rural Hospital Improvement Grant Program
Total Small Rural Hospital Improvement Grant Program
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
Total Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
93.324 State Health Insurance Assistance Program
The Healthy Brain Initiative: Technical Assistance to Implement Public Health Actions
93.334 related to Cognitive Health, Cognitive Impairment, and Caregiving at the State and
Local Levels
93.336 Behavioral Risk Factor Surveillance System
Public Health Emergency Response:Cooperative Agreement for Emergency Response:
Public Health Crisis Response
COVID-19 Public Health Emergency Response:Cooperative Agreement for Emergency
Response: Public Health Crisis Response
Total Public Health Emergency Response:Cooperative Agreement for Emergency
Response: Public Health Crisis Response
Flexible Funding Model - Infrastructure Development and Maintenance for State
93.367
Manufactured Food Regulatory Programs
93.369 ACL Independent Living State Grants
93.387 National and State Tobacco Control Program
93.413 The State Flexibility to Stabalize the Market Grant Program
Improving the Health of Americans through Prevention and Management of Diabetes
93.426 :
and Heart Disease and Stroke
93.434 Every Student Succeeds Act/Preschool Development Grants
93.464 ACL Assistive Technology
93.478 Preventing Maternal Deaths: Supporting Maternal Mortality Review Committees
93.498 Provider Relief Fund
93.498 COVID-19 Provider Relief Fund
Total Provider Relief Fund
93.500 Pregnancy Assistance Fund Program
93.505 Affordable Care Act (ACA) Maternal, Infant, and Early Childhood Home Visiting
, Program
93.506 ACA Nationwide Program for National and State Background Checks for Direct Patient
, Access Employees of Long Term Care Facilities and Providers
93.556 Promoting Safe and Stable Families
(continued) m1
See accompanying Notes to the Schedules of Expenditures of Federal Awards
Amount
COVID-19 Federal Passed to
Delineation Expenditures Subrecipients
159,480 23,247
3,934,113 1,779,249
32,009 30,424
3,966,122
46,856 -
156,467 156,467
338,661 31,807
3,419,169 963,533
860,509 653,117
338,715 45,859
424,444 293,690
1,486,733 1,486,733
103,027 -
109,148 5,010
47,410,599 -
6,455,405 -
53,866,004
116,090 7,850
1,254,780 307,881
31,196 8,308
489,102 352,440
30,449 -
458,653
1,716,162 47,056
41,099,581 601,904
42,815,743
367,099 358,360
18,874 -
295,478 -
156,774 12,701
1,524,702 12,268
1,681,476
128,916 -
207,116 -
114,396 -
34,650 -
1,918,620 346,954
541,352 -
485,216 -
300,997 -
725,031 -
1,823,579 -
2,548,610
31,836 5,453
2,958,212 -
89,247 -
2,914,912 2,480,694
93.558
93.563
93.566
93.568
93.568
93.569
93.569
93.586
93.590
93.597
93.599
93.603
93.630
93.644
93.645
93.645
93.658
93.659
93.665
93.667
93.669
93.671
93.671
93.674
93.674
93.686
93.735
93.747
93.758
93.767
93.767
93.788
93.791
93.796
93.816
93.817
93.889
93.889
93.898
93.913
93.917
93.917
93.940
93.944
93.946
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Program Name
Temporary Assistance for Needy Families (TANF) State Programs
Child Support Enforcement
Refugee and Entrant Assistance — State Administered Programs
Low-Income Home Energy Assistance
COVID-19 Low-Income Home Energy Assistance
Total Low-Income Home Energy Assistance
Community Services Block Grants
COVID-10 Community Services Block Grants
Total Community Services Block Grants
State Court Improvement Program
Community-Based Child Abuse Prevention Grants
Grants to States for Access and Visitation Programs
Chafee Education and Training Vouchers Program (ETV)
Adoption Incentive Payments
Developmental Disabilities Basic Support and Advocacy Grants
Adult Medicaid Quality: Improving Maternal and Infant Health Outcomes in Medicaid
and CHIP
Stephanie Tubbs Jones Child Welfare Services Program
COVID-19 Stephanie Tubbs Jones Child Welfare Services Program
Total Stephanie Tubbs Jones Child Welfare Services Program
Foster Care — Title IV-E
Adoption Assistance
Emergency Grants to Address Mental and Substance Use Disorders During COVID-19
Social Services Block Grant
Child Abuse and Neglect State Grants
Family Violence Prevention and Services / Domestic Violence Shelter and Supportive
Services
COVID-19 Family Violence Prevention and Services / Domestic Violence Shelter and
Supportive Services
Total Family Violence Prevention and Services / Domestic Violence Shelter and
Supportive Services
Chafee Foster Care Independence Program
COVID-19 Chafee Foster Care Independence Program
Total Chafee Foster Care Independence Program
Ending the HIV Epidemic: A Plan for America - Ryan White HIV/AIDS Program Parts
AandB
State Public Health Approaches for Ensuring Quitline Capacity — Funded in Part by
Prevention and Public Health Funds (PPHF)
Elder Abuse Prevention Interventions Program
Preventive Health and Health Services Block Grant funded solely with Prevention and
Public Health Funds (PPHF)
Children’s Health Insurance Program
COVID-19 Children’s Health Insurance Program
Total Children’s Health Insurance Program
Opioid STR
Money Follows the Person Rebalancing Demonstration
LIC and Cert 16-18
Preventing Heart Attacks and Strokes in High Need Areas
Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities
National Bioterrorism Hospital Preparedness Program
COVID-19 National Bioterrorism Hospital Preparedness Program
Total National Bioterrorism Hospital Preparedness Program
Cancer Prevention
Grants to States for Operation of Offices of Rural Health
HIV Care Formula Grants
COVID-19 HIV Care Formula Grants
Total HIV Care Formula Grants
HIV Prevention Activities — Health Department Based
Human Immunodeficiency Virus (HIV) / Acquired Immunodeficiency Virus Syndrome
(AIDS) Surveillance
Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health
Initiative Programs
22
See accompanying Notes to the Schedules of Expenditures of Federal Awards
Amount
COVID-19 Federal Passed to
Delineation Expenditures Subrecipients
33,779,157 16,505,255
28,050,535 -
1,339,185 1,339,185
33,844,065 30,057,761
5,798,256 4,666,409
39,642,321
12,542,681 10,659,222
8,077,390 6,504,037
20,620,071
352,533 -
76,545 51,226
45,490 -
486,953 200,916
837,713 -
853,074 644,683
197,486 -
3,321,508 3,321,508
297,163 -
3,618,671
21,757,224 -
24,073,874 -
999,110 791,924
14,796,553 5,054,418
30,726 -
938,396 642,739
302,832 302,832
1,241,228
1,152,950 239,640
829,644 -
1,982,594
13,334 -
156,952 156,952
8,206 -
1,119,754 43,618
191,733,436 -
3,341,798 -
195,075,234
5,174,747 5,174,747
72,389 -
2,253,590 -
2,807,268 1,035,642
58,218 -
1,182,040 455,466
384,600 -
1,566,640
1,838,358 15,907
188,557 30,850
10,549,100 1,316,340
276,303 276,303
10,825,403
3,203,709 732,026
174,533 -
387,399 97,444
93.958
93.959
93.977
93.991
93.994
93.044
93.044
93.045
93.045
93.053
93.575
93.575
93.596
93.600
93.775
93.777
93.778
93.778
94.016
95.001
96.008
96.001
(continued)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Amount
COVID-19 Federal Passed to
Program Name Delineation Expenditures Subrecipients
Block Grants for Community Mental Health Services 4,294,660 4,294,660
Block Grants for Prevention and Treatment of Substance Abuse 12,329,125 12,329,125
Preventive Health Services — Sexually Transmitted Diseases Control Grants 1,107,421 -
Preventive Health and Health Services Block Grant 791,464 87,494
Maternal and Child Health Services Block Grant to the States 10,307,519 1,360,711
Aging Cluster
Special Programs for the Aging — Title III, Part B — Grants for Supportive Services and 2,278,538 2,278,538
Senior Centers
COVID-19 Special Programs for the Aging — Title Ill, Part B — Grants for Supportive 4,181,708 4,181,708
Services and Senior Centers
Total Special Programs for the Aging 3,460,246
Special Programs for the Aging — Title Ill, Part C — Nutrition Services 3,096,405 2,371,383
COVID-19 Special Programs for the Aging — Title Ill, Part C — Nutrition Services 4,949,253 4,116,884
Total Special Programs for the Aging — Title III, Part C — Nutrition Services 8,045,658
Nutrition Services Incentive Program 1,041,052 1,041,052
Total Aging Cluster 12,546,956
CCDF Cluster
Child Care and Development Block Grant 71,246,554 9,556,956
COVID-19 Child Care and Development Block Grant 56,931,886 -
Total Child Care and Development Block Grant 128,178,440
Child Care Mandatory and Matching Funds of the Child Care and Development Fund 24,391,769 315,187
Total CCDF Cluster 152,570,209
Head Start Cluster
Head Start 174,993 -
Total Head Start Cluster 174,993
Medicaid Cluster
State Medicaid Fraud Control Units 2,586,136 -
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII)
: 2,771,857 -
Medicare
Medical Assistance Program 4,380,429,485 -
COVID-19 Medical Assistance Program 355,477,445 -
Total Medical Assistance Program
Total Medicaid Cluster
TOTAL U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
Foster Grandparent/Senior Companion Cluste!
Senior Companion Program
Total Foster Grandparent/Senior Companion Cluster
TOTAL CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
EXECUTIVE OFFICE OF THE PRESIDENT
High Intensity Drug Trafficking Areas Program
TOTAL EXECUTIVE OFFICE OF THE PRESIDENT
SOCIAL SECURITY ADMINISTRATION
Social Security — Work Incentives Planning and Assistance Program
Disability Insurance / SSI Cluster
Social Security — Disability Insurance (Dl)
Total Disability Insurance / SSI Cluster
TOTAL SOCIAL SECURITY ADMINISTRATION
23
See accompanying Notes to the Schedules of Expenditures of Federal Awards
4,735,906,930
4,741,264,923
5,492,496,762
198,951
198,951
198,951
984,021
984,021
276,607
27,013,239
27,013,239
27,289,846
97.008
97.012
97.023
97.036
97.036
97.039
97.041
97.042
97.042
97.043
97.044
97.045
97.050
97.050
97.056
97.067
97.082
97.089
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
Program Name
U.S. DEPARTMENT OF HOMELAND SECURITY
Non-Profit Security Program
Boating Safety Financial Assistance
Community Assistance Program State Support Services Element (CAP-SSSE)
Disaster Grants — Public Assistance (Presidentially Declared Disasters)
COVID 19 Disaster Grants — Public Assistance (Presidentially Declared Disasters)
Total Disaster Grants — Public Assistance (Presidentially Declared Disasters)
Hazard Mitigation Grant
National Dam Safety Program
Emergency Management Performance Grants
COVID-19 Emergency Management Performance Grants
Total Emergency Management Performance Grants
State Fire Training Systems Grants
Assistance to Firefighters Grant
Cooperating Technical Partners
Presidential Declared Disaster Assistance to Individuals and Households - Other Needs
COVID-19 Presidential Declared Disaster Assistance to Individuals and Households -
Other Needs
Total Presidential Declared Disaster Assistance to Individuals and Households -
Other Needs
FY16 Port Security Grant
Homeland Security Grant Program
Earthquake Consortium
Driver's License Security Grant Program
TOTAL U.S. DEPARTMENT OF HOMELAND SECURITY
TOTAL EXPENDITURES OF FEDERAL AWARDS
EXPLANATION OF FOOTNOTE REFERENCE:
Program Number with UN denotes unknown CFDA numbers.
# The total expenditures for CFDA No. 17.225 include state expenditures of $60,166,427 and
federal expenditures of $1,795,699,516.
@ Denotes federal programs with noncash benefits.
(continued)
24
See accompanying Notes to the Schedules of Expenditures of Federal Awards
Amount
COVID-19 Federal Passed to
Delineation Expenditures Subrecipients
421,431 388,048
1,140,618 -
230,489 -
62,619,734 59,885,900
36,351,131 366,864
98,970,865
6,131,561 5,329,558
424,362 -
4,219,730 150,145
206,332 -
4,426,062
835 -
424,975 -
2,337,084 -
247,155,690 -
1,094,475 -
248,250,165
970,501 -
5,043,594 4,810,068
32,450 -
2,792,785 2,778,057
371,597,777
12,360,514,350
Schedule of Expenditures of Federal Awards by
State Grantee Agency
(This page left blank intentionally.)
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Agriculture and Commerce
U.S. DEPARTMENT OF AGRICULTURE
10.025 Plant and Animal Disease, Pest Control, and Animal Care 78,659
10.163 Market Protection and Promotion 32,000
10.170 Specialty Crop Block Grant Program — Farm Bill 319,650
10.475 Cooperative Agreements with States for Intrastate Meat and Poultry Inspection 1,156,162
10.902 Soil and Water Conservation 68,818
10.950 Agricultural Statistics Reports 12,500
Total U.S. DEPARTMENT OF AGRICULTURE 1,667,789
ENVIRONMENTAL PROTECTION AGENCY
66.605 Performance Partnership Grants 708,977
DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.103 Food and Drug Administration Research 580,723
TOTAL Agriculture and Commerce 2,957,489
Animal Health
U.S. DEPARTMENT OF AGRICULTURE
10.025 Plant and Animal Disease, Pest Control, and Animal Care 464,436
TOTAL Animal Health 464,436
Archives and History
U.S. DEPARTMENT OF THE INTERIOR
15.904 Historic Preservation Fund Grants-In-Aid 793,371
15.922 Native American Graves Protection and Repatriation Act 34,957
15.928 Civil War Battlefield Land Acquisition Grants 795,495
Total U.S. DEPARTMENT OF THE INTERIOR 1,623,823
NATIONAL ENDOWMENT FOR THE HUMANITIES
45.130 Promotion of the Humanities Challenge Grants 6,578
45.149 Promotion of the Humanities — Division of Preservation and Access 90,242
Total NATIONAL ENDOWMENT FOR THE HUMANITIES 96,820
TOTAL Archives and History 1,720,643
Arts Commission
NATIONAL ENDOWMENT FOR THE ARTS
45.025 — Promotion of the Arts - Partnership Agreements 764,515
TOTAL Arts Commission 764,515
Attorney General
U.S. DEPARTMENT OF JUSTICE
16.543 Missing Children's Assistance 355,355
16.576 — Crime Victim Compensation 1,343,692
16.816 John R. Justice Prosecutors and Defenders Incentive Act 36,100
Total U.S. DEPARTMENT OF JUSTICE 1,735,147
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.775 State Medicaid Fraud Control Units 2,586,136
TOTAL Attorney General 4,321,283
(continued)
25
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Board for Community and Junior Colleges
U.S. DEPARTMENT OF EDUCATION
84.002 Adult Education — Basic Grants to States 4,454,494
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.434 Every Student Succeeds Act/Preschool Development Grants 541,352
TOTAL Board for Community and Junior Colleges 4,995,846
Corrections
U.S. DEPARTMENT OF JUSTICE
16.606 State Criminal Alien Assistance Program 5,349
16.812 Second Chance Act Reentry Initiative 140,689
TOTAL Corrections 146,038
East MS State Hospital
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.498 Provider Relief Fund 529,498
TOTAL Corrections 529,498
Education
U.S. DEPARTMENT OF AGRICULTURE
10.553 School Breakfast Program (SBP) 921,463
10.555 @ National School Lunch Program (NSLP) 22,093,870
10.555 @ COVID-19 National School Lunch Program (NSLP) 20,063,622
Total NSLP 42,157,492
10.556 = Special Milk Program for Children (SMP) 2,474
10.558 = Child and Adult Care Food Program 35,071,892
10.559 @ Summer Food Service Program for Children (SFSPC) 244,987,129
10.560 State Administrative Expenses for Child Nutrition 4,512,036
10.579 = Child Nutrition Discretionary Grants Limited Availability 145,935
10.582 Fresh Fruit and Vegetable Program 1,848,801
Total U.S. DEPARTMENT OF AGRICULTURE 329,647,222
U.S. DEPARTMENT OF EDUCATION
84.010 Title | Grants to Local Educational Agencies 203,159,011
84.011 Migrant Education — State Grant Program 835,649
84.013 Title | State Agency Program for Neglected and Delinquent Children and Youth 226,113
84.027 Special Education — Grants to States (IDEA, Part B) 123,110,604
84.048 | Career and Technical Education — Basic Grants to States 13,183,705
84.144 Migrant Education — Coordination Program 36,000
84.173 Special Education — Preschool Grants (IDEA, Preschool) 4,030,684
84.196 | Education for Homeless Children and Youth 1,295,518
84.287 Twenty-First Century Community Learning Centers 7,757,183
84.305 Education Research, Development and Dissemination 82,416
84.323 Special Education — State Personnel Development 707,307
84.358 Rural Education 5,369,664
84.365 English Language Acquisition State Grants 1,627,975
84.367 Supporting Effective Instruction State Grants 25,995,295
84.368 Competitive Grants for State Assessments 498,104
84.369 Grants for State Assessments and Related Activities 6,913,218
84.372 Statewide Longitudinal Data Systems 1,804,150
84.377 School Improvement Grants 2,562,825
84.424 Title IV - SSAE State Activities 13,864,909
84.425D Elementary and Secondary School Emergency Relief Fund 121,925,341
84.425R Coronavirus Response and Relief Supplemental Appropriations Act, 2021 - Emergency
. Assistance for Non-Public Schools (CRRSA EANS) 1,100,809
(continued) 26
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
84.938 Disaster Recovery Assistance for Education 5,436
Total U.S. DEPARTMENT OF EDUCATION 536,091,916
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.079 Cooperative Agreements to Promote Adolescent Health through School-Based HIV/STD
. Prevention and School-Based Surveillance 74,420
TOTAL Education 865,813,558
Emergency Management
U.S. DEPARTMENT OF TRANSPORTATION
20.615 E-911 Grant Program 56,004
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants 236,811
Total U.S. DEPARTMENT OF TRANSPORTATION 292,815
U.S. DEPARTMENT OF HOMELAND SECURITY
97.023 Community Assistance Program State Support Services Element (CAP-SSSE) 230,489
97.036 Disaster Grants — Public Assistance (Presidentially Declared Disasters) 62,627,409
97.036 COVID-19 Disaster Grants — Public Assistance (Presidentially Declared Disasters) 29,235,738
Total Disaster Grants — Public Assistance (Presidentially Declared Disasters) 91,863,147
97.039 Hazard Mitigation Grant 6,131,561
97.042 Emergency Management Performance Grants 4,219,730
97.042 COVID-19 Emergency Management Performance Grants 206,332
Total Emergency Management Performance Grants 4,426,062
97.082 Earthquake Consortium 32,450
Total U.S. DEPARTMENT OF HOMELAND SECURITY 102,683,709
TOTAL Emergency Management 102,976,524
Employment Security
U.S. DEPARTMENT OF LABOR
17.002 Labor Force Statistics 697,752
17.207 | Employment Service / Wagner-Peyser Funded Activities 5,783,243
17.225 # Unemployment Insurance 1,832,725,521
17.225# COVID-19 Unemployment Insurance 23,140,422
Total Unemployment Insurance 1,855,865,943
17.235 Senior Community Service Employment Program 925,736
17.245 Trade Adjustment Assistance 138,176
17.258 WIA Adult Program 10,567,879
17.259 WIA Youth Activities 10,059,297
17.271. | Work Opportunity Tax Credit Program (WOTC) 397,415
17.273, Temporary Labor Certification for Foreign Workers 192,992
17.277 Workforce Investment Act (WIA) National Emergency Grants 1,333,257
17.277. COVID-19 Workforce Investment Act (WIA) National Emergency Grants 1,811,383
Total Workforce Investment Act (WIA) National Emergency Grants 3,144,640
17.278 | WIA Dislocated Worker Formula Grants 14,300,751
17.285 Apprenticeship USA Grants 805,730
17.801 Jobs for Veterans State Grants 1,150,727
Total U.S. DEPARTMENT OF LABOR 1,904,030,281
U.S. DEPARTMENT OF HOMELAND SECURITY
97.050 Presidential Declared Disaster Assistance to Individuals and Households - Other Needs 247,155,690
COVID-19 Presidential Declared Disaster Assistance to Individuals and Households - Other
97.050 Needs 1,094,475
Total Presidential Declared Disaster Assistance to Individuals and Households - Other Needs 248,250,165
TOTAL Employment Security 2,152,280,446
(continued)
27
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Environmental Quality
U.S. DEPARTMENT OF AGRICULTURE
10.912 — Environmental Quality Incentives Program 27,532
U.S. DEPARTMENT OF DEFENSE
12.113 | State Memorandum of Agreement Program for the Reimbursement of Technical Services 86,347
U.S. DEPARTMENT OF THE INTERIOR
15.250 Regulation of Surface Coal Mining and Surface Effects of Underground Coal Mining 182,626
15.252 Abandoned Mine Land Reclamation (AMLR) 46,172
15.608 Fish and Wildlife Management Assistance 31,740
15.810 National Cooperative Geologic Mapping Program 72,888
15.980 National Ground-Water Monitoring Network 25,699
15.981 Water Use and Data Research 2,155
Total U.S. DEPARTMENT OF THE INTERIOR 361,280
U.S. DEPARTMENT OF LABOR
17.600 Mine Health and Safety Grants 48,738
U.S. DEPARTMENT OF THE TREASURY
21.015 Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the
: Gulf Coast States 15,361,443
ENVIRONMENTAL PROTECTION AGENCY
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities
. Relating to the Clean Air Act 382,844
66.040 State Clean Diesel Grant Program 88,847
66.202 Congressionally Mandated Projects 4,179
66.419 Water Pollution Control State, Interstate, and Tribal Program Support 97,791
66.454 Water Quality Management Planning 148,276
66.458 Capitalization Grants for Clean Water State Revolving Funds 9,916,957
66.460 Nonpoint Source Implementation Grants 1,474,198
66.472 Beach Monitoring and Notification Program Implementation Grants 234,858
66.605 Performance Partnership Grants 6,173,382
66.608 — Environmental Information Exchange Network Grant Program and Related Assistance 91,390
66.701 Toxic Substances Compliance Monitoring Cooperative Agreements 115,927
66.707 TSCATitle IV State Lead Grants Certification of Lead-Based Paint Professionals 293,451
66.708 Pollution Prevention Grants Program 37,191
66.802 Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative Agreements 65,759
66.804 | Underground Storage Tank (UST) Prevention, Detection, and Compliance Program 267,052
66.805 Leaking Underground Storage Tank Trust Fund Corrective Action Program 651,903
66.809 Superfund State and Indian Tribe Core Program Cooperative Agreements 42,656
Total ENVIRONMENTAL PROTECTION AGENCY 20,086,661
GULF COAST ECOSYSTEM RESTORATION COUNCIL
87.051 Gulf Coast Ecosystem Restoration Council Comprehensive Plan Component Program 1,156,505
87.052 Gulf Coast Ecosystem Restoration Council Oil Spill Impact Program 2,356,459
Total GULF COAST ECOSYSTEM RESORATION COUNCIL 3,512,964
U.S. DEPARTMENT OF HOMELAND SECURITY
97.041 National Dam Safety Program 424 362
97.045 Cooperating Technical Partners 2,337,084
Total U.S. DEPARTMENT OF HOMELAND SECURITY 2,761,446
TOTAL Environmental Quality 42,246,411
(continued)
28
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Finance and Administration
U.S. DEPARTMENT OF THE TREASURY
21.019 Coronavirus Relief Fund 1,197,036,436
21.023 Emergency Rental Assistance Program 244,821,665
21.026 | Homeowner Assistance Fund 7,228,168
TOTAL Finance and Administration 1,449,086,269
Forestry Commission
U.S. DEPARTMENT OF AGRICULTURE
10.664 Cooperative Forestry Assistance 2,494,732
TOTAL Forestry Commission 2,494,732
Governor's Office
U.S. DEPARTMENT OF COMMERCE
11.557 Broadband Technology Opportunities Program (BTOP) 4,879,126
U.S. DEPARTMENT OF EDUCATION
84.425C Governor's Emegency Education Relief Fund 18,734,453
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.600 Head Start 174,993
TOTAL Governor's Office 23,788,572
Health
U.S. DEPARTMENT OF AGRICULTURE
10.557 ~WIC Special Supplemental Nutrition Program for Women, Infants, and Children 80,969,050
10.557 COVID-19 WIC Special Supplemental Nutrition Program for Women, Infants, and Children 6,780,847
Total WIC Special Supplemental Nutrition Program for Women, Infants, and Children 87,749,897
10.578 WIC Grants To States (WGS) 1,051,360
Total U.S. DEPARTMENT OF AGRICULTURE 88,801,257
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
14.900 Lead-Based Paint Hazard Control in Privately-Owned Housing 95,697
DEPARTMENT OF JUSTICE
16.017 Sexual Assault Services Formula Program 276,532
16.320 Services for Trafficking Victims 42,743
16.575 — Crime Victim Assistance 19,447,843
16.588 Violence Against Women Formula Grants 456,642
16.754 Harold Rogers Prescription Drug Monitoring Program 552,385
16.838 Comprehensive Opioid, Stimulant, and Substance Abuse Program 10,528
Total DEPARTMENT OF JUSTICE 20,786,673
ENVIRONMENTAL PROTECTION AGENCY
66.032 State Indoor Radon Grants 24,714
66.204 Multipurpose Grants to States and Tribes 23,960
66.432 State Public Water System Supervision 1,763,973
66.468 Capitalization Grants for Drinking Water State Revolving Funds 11,790,158
Total ENVIRONMENTAL PROTECTION AGENCY 13,602,805
U.S. DEPARTMENT OF ENERGY
81.136 Long-Term Surveillance and Maintenance 146,175
U.S. DEPARTMENT OF EDUCATION
84.181 Special Education — Grants for Infants and Families 3,408,479
(continued) 29
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
93.069
93.074
93.092
93.110
93.116
93.118
93.127
93.130
93.136
93.136
93.137
93.197
93.217
93.236
93.241
93.251
93.262
93.268
93.268
93.270
93.283
93.296
93.301
93.301
93.323
93.323
93.334
93.336
93.354
93.354
93.367
93.387
93.426
93.478
93.500
93.506
93.671
93.671
93.686
93.735
93.758
93.777
93.816
93.817
(continued)
Federal
COVID-19 Expenditures/Distrib
State Agency/Federal Department/Program Name Delineation utions/Issuances
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Public Health Emergency Preparedness 5,302,576
Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness (PHEP)
Aligned Cooperative Agreements 44,084
Affordable Care Act (ACA) Personal Responsibility Education Program 428,794
Maternal and Child Health Federal Consolidated Programs 43,519
Project Grants and Cooperative Agreements for Tuberculosis Control Programs 628,240
Acquired Immunodeficiency Syndrome (AIDS) Activity 188,114
Emergency Medical Services for Children 91,352
Cooperative Agreements to States/Territories for the Coordination and Development of Primary
Care Offices 159,480
Injury Prevention and Control Research and State and Community Based Programs 3,934,113
COVID-19 Injury Prevention and Control Research and State and Community Based Programs 32,009
Total Injury Prevention and Control Research and State and Community Based Programs 3,966,122
Community Programs to Improve Minority Health Grant Program 46,856
Childhood Lead Poisoning Prevention Projects, State and Local Childhood Lead Poisoning
Prevention and Surveillance of Blood Lead Levels in Children 338,661
Family Planning — Services 3,419,169
Grants to States to Support Oral Health Workforce Activities 338,715
State Rural Hospital Flexibility Program 424,444
Early Hearing Detection and Intervention 103,027
Occupational Safety and Health Program 109,148
Immunization Cooperative Agreements 47,410,599
COVID-19 Immunization Cooperative Agreements 6,455,405
Total Immunization Cooperative Agreements 53,866,004
Viral Hepatitis Prevention and Control 116,090
Centers for Disease Control and Prevention Investigations and Technical Assistance 1,254,780
State Partnership Grant Program to Improve Minority Health 31,196
Small Rural Hospital Improvement Grant Program 489,102
COVID-19 Small Rural Hospital Improvement Grant Program (30,449)
Total Small Rural Hospital Improvement Grant Program 458,653
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 1,716,162
COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 41,099,581
Total Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 42,815,743
Healthy Brain Initiative 18,874
Behavioral Risk Factor Surveillance System 295,478
Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public
Health Crisis Response 156,774
COVID-19 Public Health Emergency Response: Cooperative Agreement for Emergency
Response: Public Health Crisis Response 1,524,702
Total Public Health Emergency Response: Cooperative Agreement for Emergency Response:
Public Health Crisis Response 1,681,476
Flexible Funding Model - Infrastructure Development and Maintenance for State Manufactured
Food Regulatory Programs 128,916
National and State Tobacco Control Program 114,396
Improving the Health of Americans through Prevention and Management of Diabetes and Heart
Disease and Stroke 1,918,620
Preventing Maternal Deaths: Supporting Maternal Mortality Review Committees 300,997
Pregnancy Assistance Fund Program 31,836
ACA Nationwide Program for National and State Background Checks for Direct Patient Access
Employees of Long Term Care Facilities and Providers 89,247
Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services 938,396
COVID-19 Family Violence Prevention and Services/Domestic Violence Shelter and Supportive
Services 302,832
Total Family Violence Prevention and Services/Domestic Violence Shelter and Supportive
Services 1,241,228
Ending the HIV Epidemic: A Plan for America 13,334
State Public Health Approaches for Ensuring Quitline Capacity — 156,952
Preventative Health and Health Services Block Grant 1,119,754
State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare 2,771,857
Preventing Heart Attacks and Strokes in High Need Areas 2,807,268
Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities 58,218
30
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
93.889 National Bioterrorism Hospital Preparedness Program 1,182,040
93.889 | COVID-19 National Bioterrorism Hospital Preparedness Program 384,600
Total National Bioterrorism Hospital Preparedness Program 1,566,640
93.898 | Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations 1,838,358
93.913 Grants to States for Operation of State Offices of Rural Health 188,557
93.917 HIV Care Formula Grants 10,549,100
93.917 COVID-19 HIV Care Formula Grants 276,303
Total HIV Care Formula Grants 10,825,403
93.940 HIV Prevention Activities Health Department Based 3,203,709
Human Immunodeficiency Virus (HIV)/Acquired Immunodeficiency Virus Syndrome (AIDS)
93.944 .
Surveillance 174,533
Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative
93.946
Programs 387,399
93.977 Sexually Transmitted Diseases (STD) Prevention and Control Grants 1,107,421
93.991 Preventive Health and Health Services Block Grant 791,464
93.994 Maternal and Child Health Services Block Grant to the States 10,307,519
Total U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 157,314,221
U.S. DEPARTMENT OF HOMELAND SECURITY
97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) 7,115,393
TOTAL Health 291,270,700
Human Services
U.S. DEPARTMENT OF AGRICULTURE
10.542 Pandemic EBT — Food Benefits 60,868,465
10.551 Supplemental Nutrition Assistance Program (SNAP) 998,964,965
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 35,770,008
10.565 |= Commodity Supplemental Food Program 874,159
10.568 | Emergency Food Assistance Program (Administrative Costs) 1,533,922
10.568 | COVID-19 Emergency Food Assistance Program (Administrative Costs) 428,190
Total Emergency Food Assistance Program (Administrative Costs) 1,962,112
10.569 @ Emergency Food Assistance Program (Food Commodities) 7,808,425
10.580 Supplemental Nutrition Assistance Program, Process and Technology Improvement Grants 233,852
Total U.S. DEPARTMENT OF AGRICULTURE 1,106,481,986
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Special Programs for the Aging, Title VIl, Chapter 3, Programs for Prevention of Elder Abuse,
93.041 Neglect, and Exploitation 28,604
93.042 Special Programs for the Aging, Title VIl, Chapter 2, Long Term Care Ombudsman Services for
. Older Individuals 61,039
93.042 COVID-19 Special Programs for the Aging, Title VII, Chapter 2, Long Term Care Ombudsman
. Services for Older Individuals 132,128
Total Special Programs for the Aging, Title VIl, Chapter 2, Long Term Care Ombudsman
Services for Older Individuals 193,167
Special Programs for the Aging, Title Ill, Part D, Disease Prevention and Health Promotion
Services 124,275
93.044 Special Programs for the Aging, Title Ill, Part B, Grants for Supportive Services and Senior Centers 2,278,538
COVID-19 Special Programs for the Aging, Title Ill, Part B, Grants for Supportive Services and
93.044 :
Senior Centers 1,181,708
Total Special Programs for the Aging, Title Ill, Part B, Grants for Supportive Services and
Senior Centers 3,460,246
93.045 Special Programs for the Aging, Title Ill, Part C, Nutrition Services 3,096,405
93.045 COVID-19 Special Programs for the Aging, Title Ill, Part C, Nutrition Services 4,949,253
Total Special Programs for the Aging, Title Ill, Part C, Nutrition Services 8,045,658
93.048 Special Programs for the Aging, Title IV, and Title Il, Discretionary Projects 221,617
93.052 National Family Caregiver Support, Title Ill, Part E 912,421
93.052 COVID-19 National Family Caregiver Support, Title Ill, Part E 572,683
Total National Family Caregiver Support, Title Ill, Part E 1,485,104
93.053 Nutrition Services Incentive Program 1,041,052
93.071 Medicare Enrollment Assistance Program 301,242
(continued)
31
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
93.072 Lifespan Respite Care Program 48,923
93.235 Title V State Sexual Risk Avoidance Education (Title V State SRAE) Program 860,509
93.324 State Health Insurance Assistance Program 367,099
93.505 Affordable Care Act (ACA) Maternal, Infant, and Early Childhood Home Visiting Program 2,958,212
93.556 MaryLee Allen Promoting Safe and Stable Families Program 2,914,912
93.558 | Temporary Assistance for Needy Families (TANF) 33,779,157
93.563 Child Support Enforcement 28,050,535
93.566 Refugee and Entrant Assistance State/Replacement Designee Administered Programs 1,339,185
93.568 Low-Income Home Energy Assistance 33,844,065
93.568 COVID-19 Low-Income Home Energy Assistance 5,798,256
Total Low-Income Home Energy Assistance 39,642,321
93.569 Community Services Block Grant 12,542,681
93.569 | COVID-19 Community Services Block Grant 8,077,390
Total Community Services Block Grant 20,620,071
93.575 Child Care and Development Block Grant 71,246,554
93.575 COVID-19 Child Care and Development Block Grant 56,931,886
Total Child Care and Development Block Grant 128,178,440
93.590 Community-Based Child Abuse Prevention Grants 76,545
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund 24,391,769
93.597 Grants to States for Access and Visitation Programs 45,490
93.599 | Chafee Education and Training Vouchers Program (ETV) 486,953
93.603 Adoption and Legal Guardianship Incentive Payments 837,713
93.645 Stephanie Tubbs Jones Child Welfare Services Program 3,321,508
93.645 | COVID-19 Stephanie Tubbs Jones Child Welfare Services Program 297,163
Total Stephanie Tubbs Jones Child Welfare Services Program 3,618,671
93.658 Foster Care Title IV-E 21,757,224
93.659 Adoption Assistance 24,073,874
93.667 Social Services Block Grant 14,796,553
93.669 Child Abuse and Neglect State Grants 30,726
93.674 John H. Chafee Foster Care Program for Successful Transition to Adulthood 1,152,950
93.674 COVID-19 John H. Chafee Foster Care Program for Successful Transition to Adulthood 829,644
Total John H. Chafee Foster Care Program for Successful Transition to Adulthood 1,982,594
93.747 Elder Abuse Prevention Interventions 8,206
Total U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 365,766,647
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
94.016 Senior Companion Program 198,951
TOTAL Human Services 1,472,447,584
Insurance
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.413 The State Flexibility to Stabalize the Market Grant Program 34,650
Total U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 34,650
U.S. DEPARTMENT OF HOMELAND SECURITY
97.043 State Fire Training Systems Grants 835
97.044 Assistance to Firefighters Grant 424,975
Total U.S. DEPARTMENT OF HOMELAND SECURITY 425,810
TOTAL Insurance 460,460
Library Commission
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
45.310 Grants to States 1,615,562
45.310 COVID-19 Grants to States 248,651
Total Grants to States 1,864,213
TOTAL Library Commission 1,864,213
(continued)
32
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Marine Resources
U.S. DEPARTMENT OF COMMERCE
11.407 Interjurisdictional Fisheries Act of 1986 166,365
11.419 | Coastal Zone Management Administration Awards 1,214,909
11.420 Coastal Zone Management Estuarine Research Reserves 625,455
11.434 Cooperative Fishery Statistics 496,680
11.454 — Unallied Management Projects 298,514
Total U.S. DEPARTMENT OF COMMERCE 2,801,923
U.S. DEPARTMENT OF THE INTERIOR
15.605 Sport Fish Restoration 471,795
15.622 Sportfishing and Boating Safety Act 97,971
15.939 National Heritage Area Federal Financial Assistance 204,944
Total U.S. DEPARTMENT OF THE INTERIOR 774,710
U.S. DEPARMENT OF THE TREASURY
Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the
21.015 Gulf Coast States 172,755
ENVIRONMENTAL PROTECTION AGENCY
66.461 EPA Wetlands Program Development 46,535
GULF COAST ECOSYSTEM RESTORATION COUNCIL
87.052 Gulf Coast Ecosystem Restoration Council Oil Spill Impact Program 156,847
U.S. DEPARTMENT OF HOMELAND SECURITY
97.056 Port Security Grant Program 460,735
97.067 Homeland Security Grant Program 4,560
Total U.S. DEPARTMENT OF HOMELAND SECURITY 465,295
TOTAL Marine Resources 4,418,065
Medicaid
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.644 Adult Medicaid Quality: Improving Maternal and Infant Health Outcomes in Medicaid and CHIP 197,486
93.767 Children's Health Insurance Program 191,733,436
93.767 COVID-19 Children's Health Insurance Program 3,341,798
Total Children's Health Insurance Program 195,075,234
93.778 Medical Assistance Program 4,380,429,485
93.778 COVID-19 Medical Assistance Program 355,477,445
Total Medical Assistance Program 4,735,906,930
93.791 Money Follows the Person Rebalancing Demonstration 72,389
93.796 State Survey Certification of Health Care Providers and Suppliers (Title XIX) Medicaid 2,253,590
Total U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 4,933,505,629
TOTAL Medicaid 4,933,505,629
Mental Health
DEPARTMENT OF JUSTICE
16.812 | Second Chance Act Reentry Initiative 98,213
Total U.S. DEPARTMENT OF JUSTICE 98,213
(continued)
33
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional
. Disturbances (SED) 2,336,508
93.110 Maternal and Child Health Federal Consolidated Programs 694,092
93.150 Projects for Assistance in Transition from Homelessness (PATH) 156,467
93.243 | Substance Abuse and Mental Health Services Projects of Regional and National Significance 1,486,733
93.630 Developmental Disabilities Basic Support and Advocacy Grants 853,074
93.665 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 999,110
93.788 Opioid STR 5,174,747
93.958 Block Grants for Community Mental Health Services 4,294,660
93.959 Block Grants for Prevention and Treatment of Substance Abuse 12,329,125
Total U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 28,324,516
TOTAL Mental Health 28,422,729
Military Department
U.S. DEPARTMENT OF DEFENSE
12.400 Military Construction, National Guard 2,247,857
12.401 National Guard Military Operations and Maintenance (O&M) Projects 101,119,053
12.404 National Guard Challenge Program 4,609,896
Total U.S. DEPARTMENT OF DEFENSE 107,976,806
TOTAL Military Department 107,976,806
MS Development Authority
U.S. DEPARTMENT OF AGRICULTURE
10.351 Rural Business Development Grant 40,000
U.S. DEPARTMENT OF DEFENSE
12.002 Procurement Technical Assistance For Business Firms 351,867
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
14.228 | Community Development Block Grants / State's Program 43,043,731
APPALACHIAN REGIONAL COMMISSION
23.002 Appalachian Area Development 6,965,822
23.011 Appalachian Research, Technical Assistance, and Demonstration Projects 130,712
Total APPALACHIAN REGIONAL COMMISSION 7,096,534
SMALL BUSINESS ADMINISTRATION
59.061 State Trade Expansion 371,626
U.S. DEPARTMENT OF ENERGY
81.041 State Energy Program 554,894
TOTAL MS Development Authority 51,458,652
MS State Hospital
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.498 Provider Relief Fund 1,294,081
TOTAL MS State Hospital 1,294,081
(continued)
34
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Oil and Gas Board
ENVIRONMENTAL PROTECTION AGENCY
66.204 Multipurpose Grants to States and Tribes 25,682
66.433 State Underground Water Source Protection 47,475
Total ENVIRONMENTAL PROTECTION AGENCY 73,157
TOTAL Oil and Gas Board 73,157
Board of Pharmacy
U.S. DEPARTMENT OF JUSTICE
16.754 — Harold Rogers Prescription Drug Monitoring Program 78,530
TOTAL Board of Pharmacy 78,530
Public Safety
U.S. DEPARTMENT OF JUSTICE
16.034 Coronavirus Emergency Supplemental Funding 451,971
16.320 Services for Trafficking Victims 239,608
16.540 Juvenile Justice and Delinquency Prevention 202,483
16.554 National Criminal History Improvement Program (NCHIP) 396,210
16.593 Residential Substance Abuse Treatment for State Prisoners 136,879
16.609 Project Safe Neighborhoods 73,101
16.734 Special Data Collections and Statistical Studies 43,001
16.735 | PREA Program: Strategic Support for PREA Implementation 6,989
16.738 Edward Byrne Memorial Justice Assistance Grant Program 1,564,367
16.741 DNA Backlog Reduction Program 852,059
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program 190,731
16.751 Edward Byrne Memorial Competitive Grant 45,578
16.754 Harold Rogers Prescription Drug Monitoring Program 84,338
16.922 Equitable Sharing Program 381,856
16.UN1 DCE/SP Grant 322,053
Total U.S. DEPARTMENT OF JUSTICE 4,991,224
U.S. DEPARTMENT OF TRANSPORTATION
20.218 Motor Carrier Safety Assistance 3,553,508
20.232 Commercial Driver's License Program Implementation Grant 282,223
20.237 Motor Carrier Safety Assistance High Priority Activities Grants and Cooperative Agreements 394,477
20.600 State and Community Highway Safety 7,445,018
National Highway Traffic Safety Administration (NHTSA) Discretionary Safety Grants and
Cooperative Agreements 90,081
Total U.S. DEPARTMENT OF TRANSPORTATION 11,765,307
EXECUTIVE OFFICE OF THE PRESIDENT
95.001 High Intensity Drug Trafficking Areas Program 984,021
U.S. DEPARTMENT OF HOMELAND SECURITY
97.008 Non-Profit Security Program 421,431
97.056 Port Security Grant Program 509,766
97.067 Homeland Security Preparedness Technical Assistance Program 5,039,034
97.089 Driver's License Security Grant Program 2,792,785
97.120 Rural Emergency Medical Communications Demonstration Project
Total U.S. DEPARTMENT OF HOMELAND SECURITY 8,763,016
TOTAL Public Safety 26,503,568
(continued)
35
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Public Service Commission
U.S. DEPARTMENT OF TRANSPORTATION
20.700 _— Pipeline Safety Program State Base Grant 435,274
20.720 State Damage Prevention Program Grants 31,810
Total U.S. DEPARTMENT OF TRANSPORTATION 467,084
TOTAL Public Service Commission 467,084
Rehabilitation Services
U.S. DEPARTMENT OF EDUCATION
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States 48,452,940
84.177 — Rehabilitation Services Independent Living Services for Older Individuals Who are Blind 274,137
84.187 | Supported Employment Services for Individuals with the Most Significant Disabilities 180,172
84.426 Randolph-Sheppard - Financial Relief and Restoration Payments 419,263
Total U.S. DEPARTMENT OF EDUCATION 49,326,512
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.369 ACL Independent Living State Grants 207,116
93.464 ACL Assistive Technology 485,216
Total U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 692,332
SOCIAL SECURITY ADMINISTRATION
96.001 Social Security — Disability Insurance (Dl) 27,013,239
96.008 = Social Security - Work Incentives Planning and Assistance Program 276,607
Total SOCIAL SECURITY ADMINISTRATION 27,289,846
TOTAL Rehabilitation Services 77,308,690
Secretary of State
ELECTION ASSISTANCE COMMISSION
90.404 Election Security Grant 1,585,544
90.404 COVID-19 Election Security Grant 1,869,423
Total Election Security Grant 3,454,967
Total Secretary of State 3,454,967
Soil and Water Conservation Commission
U.S. DEPARTMENT OF AGRICULTURE
10.069 Conservation Reserve Program 1,247,329
10.902 Soil and Water Conservation 1,128,786
10.904 Watershed Protection and Flood Prevention 705,882
10.912 — Environmental Quality Incentives Program 4,148,468
10.916 | Watershed Rehabilitation Program 752,982
Total U.S. DEPARTMENT OF AGRICULTURE 7,983,447
TOTAL Soil and Water Conservation Commission 7,983,447
Supreme Court
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.586 State Court Improvement Program 352,533
TOTAL Supreme Court 352,533
(continued)
36
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
Federal
COVID-19 Expenditures/Distrib
ALN State Agency/Federal Department/Program Name Delineation utions/Issuances
Transportation
U.S. DEPARTMENT OF TRANSPORTATION
20.200 Highway Research and Development Program 154,079
20.205 ~— Highway Planning and Construction 582,922,727
20.224 Federal Lands Access Program 1,902,705
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research 329,447
20.509 Formula Grants for Rural Areas and Tribal Transit Program 3,417,979
20.509 COVID-19 Formula Grants for Rural Areas and Tribal Transit Program 23,948,289
Total Formula Grants for Rural Areas and Tribal Transit Program 27,366,268
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities 1,294,479
20.516 Job Access and Reverse Commute Program 143,271
20.526 Bus and Bus Facilities Formula Program 3,313,755
20.933 National Infrastructure Investments 17,334,842
TOTAL Transportation 634,761,573
Treasury
U.S. DEPARTMENT OF AGRICULTURE
10.665 Schools and Roads — Grants to States 4,359,169
TOTAL Treasury 4,359,169
Veterans Affairs
U.S. DEPARTMENT OF VETERANS AFFAIRS
64.015 Veterans State Nursing Home Care 41,645,808
64.124 — All Volunteer Force Educational Assistance 133,521
64.203 Veterans Cemetary Grants Program 1,568,708
Total U.S. DEPARTMENT OF VETERANS AFFAIRS 43,348,037
U.S. DEPARTMENT OF HUMAN SERVICES
93.498 Provider Relief Fund 725,031
TOTAL Veterans Affairs 44,073,068
Wildlife, Fisheries and Parks
U.S. DEPARTMENT OF AGRICULTURE
10.923 | Emergency Watershed Protection Program 59,178
U.S. DEPARTMENT OF DEFENSE
12.005 Conservation and Rehabilitation of Natural Resources on Military Installations 1,469,844
U.S. DEPARTMENT OF THE INTERIOR
15.605 Sport Fish Restoration 4,572,993
15.608 Fish and Wildlife Management Assistance 44,070
15.611 Wildlife Restoration and Basic Hunter Education 4,710,168
15.615 | Cooperative Endangered Species Conservation Fund 223,859
15.626 Enhanced Hunter Education and Safety 64,334
15.630 Coastal Program 1,267
15.634 State Wildlife Grants 30,047
15.657 Endangered Species Recovery Implementation 249,333
15.916 | Outdoor Recreation Acquisition, Development and Planning 228,015
Total U.S. DEPARTMENT OF THE INTERIOR 10,124,086
(continued)
37
See accompanying Notes to the Schedules of Expenditures of Federal Awards
STATE OF MISSISSIPPI
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
20.219
97.012
97.036
COVID-19
Federal
Expenditures/Distrib
State Agency/Federal Department/Program Name Delineation
U.S. DEPARTMENT OF TRANSPORTATION
Recreational Trails Program
U.S. DEPARTMENT OF HOMELAND SECURITY
Boating Safety Financial Assistance
Disaster Grants — Public Assistance (Presidentially Declared Disasters)
Total U.S. DEPARTMENT OF HOMELAND SECURITY
TOTAL Wildlife, Fisheries and Parks
TOTAL EXPENDITURES OF FEDERAL AWARDS:
EXPLANATION OF FOOTNOTE REFERENCE:
Program Number with UN denotes unknown CFDA numbers.
# The total expenditures for CFDA No. 17.225 include state expenditures of $60,166,427and federal expenditures of $1,795,699,516.
@ Denotes federal programs with noncash benefits.
(continued)
See accompanying Notes to the Schedules of Expenditures of Federal Awards
38
utions/Issuances
607,334
1,140,618
(7,675)
1,132,943
13,393,385
$
12,360,514,350
Notes to the Schedules of Expenditures of Federal
Awards
(This page left blank intentionally.)
STATE OF MISSISSIPPI
NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
NOTE 1: PURPOSE OF THE SCHEDULES
The accompanying Schedule of Expenditures of Federal Awards is required by and presented in accordance
with the Office of Management and Budget’s (OMB) Title 2 of the U.S. Code of Federal Regulations Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). To comply with this requirement, the Department of Finance and Administration
required each state agency to prepare and submit a schedule of expenditures of federal awards. Information
contained in these schedules was combined by the Department of Finance and Administration to form the
accompanying schedules of expenditures of federal awards. Federal programs which have not been
assigned an Assistance Listing Number (ALN) have been identified. Because the Schedule presents only
a Selected portion of the operations of the State, it is not intended to and does not present the Financial
Position, Changes in Net Position or Cash Flows of the State.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Presentation - The information in the accompanying schedules of expenditures of federal
awards is presented in accordance with OMB Title 2 of the U.S. Code of Federal Regulations Part 200
(Uniform Guidance). The Schedule of Expenditures of Federal Awards by Federal Department
presents a summary of federal awards expended by federal department and ALN. The Schedule of
Expenditures of Federal Awards by State Grantee Agency presents federal awards expended by
recipient agencies of the State of Mississippi.
¢ Federal Financial Assistance - Pursuant to the Single Audit Act Amendments of 1996 (Public Law
104-156) and Uniform Guidance, federal financial assistance is defined as assistance provided by
a federal agency, either directly or indirectly, in the form of grants, cooperative agreements, loans,
loan guarantees, property (including donated surplus property), interest subsidies, insurance, direct
appropriations or other assistance. Accordingly, nonmonetary federal assistance, including food
commodities, immunizations and surplus property, is included in federal financial assistance and,
therefore, is reported on the schedules of expenditures of federal awards. Federal financial
assistance does not include direct federal cash assistance to individuals or procurement contracts
used to buy goods or services from vendors.
¢ Major Programs - The Single Audit Act Amendments of 1996 and Uniform Guidance establish a
risk-based approach to determine which federal programs are major based on certain expenditure
thresholds and risk criteria. According to the state’s Single Audit Report for the fiscal year ended
June 30, 2021, federal expenditures, distributions or issuances totaled $12,360,514,350. This
established the threshold for Type A programs as those with federal expenditures, distributions or
issuances which exceeded $30,000,000.
For the fiscal year 2021 audit, there were initially twenty-one programs with expected expenditures
exceeding the Type A threshold. Of those twenty-one, no High-Risk Type A programs and no
Low-Risk Type A programs fell below the Type A threshold based on actual expenditures. Five
additional program were designated Type A before audited procedures had been completed.
Appropriate risk assessment procedures were performed, yielding five additional High Risk Type
A programs. Therefore, final assessment after audit yielded twenty-six Type A programs. Of these
twenty-six programs, three Type A programs were identified as low risk. Risk assessments of Type
39
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
B programs were performed until the appropriate number of high risk Type B programs were
identified. Additionally, one Type B program was audited due to Type A classification before
actual expenditures were received. Therefore, for fiscal year 2021, twenty-five federal award
programs, comprising twenty-three high risk Type A programs and two high risk Type B programs,
were audited as major programs for the State of Mississippi.
Assistance Listings - The Assistance Listings is a government-wide compendium of individual
federal programs. Each program included in the listings is assigned a five-digit program
identification number (ALN) which is reflected in the accompanying schedules. The first two digits
of the ALN designate the federal agency and the last three digits designate the federal assistance
program within the federal agency.
For programs that have not been assigned a ALN, the number shown in the Schedule is the federal
agency’s 2 digit prefix followed by “UN” and digits to identify one or more Federal award lines
which form the program.
* Cluster of Programs — A grouping of closely related programs with different ALN’s that share
common compliance requirements is considered a cluster of programs. The accompanying
Schedules have been designed to present federal financial assistance information by clusters.
¢ Amount Provided to Subrecipients — The amount of federal assistance that the State provided to
subrecipients under each federal program is presented in a separate column in the accompanying
Schedules according to requirements in Uniform Guidance. A subrecipient is defined by Uniform
Guidance as a non-federal entity that receives a subaward from a pass-through entity to carry out
part of a federal program.
¢ Indirect Cost Rate — As detailed in Uniform Guidance, State Agencies may elect to charge a de
minimis cost rate of 10% of modified total direct costs which may be used indefinitely if said
agencies have not previously negotiated a separate indirect cost rate with the federal entity. Except
for those agencies listed in Appendix A, all other State agencies covered in this report have elected
to use the 10% de minimis rate.
B. Reporting Entity - The accompanying schedules include all federal programs administered by the State
of Mississippi, except for the programs accounted for by the major component unit, Universities,
within the component units section of the financial statements, for the year ended June 30, 2021.
Expenditures of federal awards provided to the state's public universities and related entities were
audited by other auditors in accordance with statutory requirements and the provisions of Office of
Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (contained in Title 2 of the U.S. Code of Federal Regulations Part
200); and a separate report issued September 9, 2022.
C. Basis of Accounting - Federal programs included in the accompanying schedules are accounted for in
the state's governmental and proprietary funds. Governmental funds are accounted for by using the
current financial resources measurement focus and the modified accrual basis of accounting and
proprietary funds by using the economic resources measurement focus and the accrual basis of
accounting, in conformity with accounting principles generally accepted in the United States of
America as prescribed by the Governmental Accounting Standards Board. Negative amounts reflected
in the accompanying Schedules represent adjustments or credits made in the normal course of business
to amounts reported as expenditures in prior years.
40
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
The value of food commodity distributions within the National School Lunch Program on the
accompanying schedules was calculated using the U.S. Department of Agriculture, Food and Nutrition
Service commodity price list in effect at the date of distribution.
The state issues food stamp benefits in electronic form, and benefits are recognized as expenditures
when recipients use the benefits.
Expenditures and Expenses - Certain transactions relating to expenditures of federal awards may
appear in records of more than one state grantee agency. To avoid duplication and the overstatement
of the aggregate level of federal awards expended by the State of Mississippi, the following policies
have been adopted:
1. When monies are received by one state grantee agency and redistributed (expended) to another
state grantee agency (i.e., a pass-through of funds by the primary recipient state grantee agency to
a subrecipient state grantee agency), the federal financial assistance will be reflected in the primary
receiving/expending state grantee agency's accounts.
2. Purchases of services between state grantee agencies using federal monies will be recorded as
expenditures or expenses on the purchasing agency's records and as revenues for services rendered
on the providing agency's records. Therefore, the expenditure of federal awards is attributed to the
purchasing agency, which is the primary receiving/expending state grantee agency.
NOTE 3: OTHER
A.
All federal expenditures/distributions/issuances included in the accompanying schedules represent
assistance received directly from the federal government, unless otherwise noted. Federal financial
assistance received indirectly from the federal government (i.e., passed-through from entities outside
of the State of Mississippi) is noted parenthetically.
Expenditures reflected in the ALN 14.228 - Community Development Block Grants/State’s program
include disbursements made for grants and new loans totaling $457,967. Program income generated
by the program in previous years was used to make these grants and new loan payments. In subsequent
years, the program income generated from the repayment of loans will be deposited into a revolving
loan fund to be redistributed to the local governments under CFDA 14.228 for program activities. At
June 30, 2020, the outstanding loan balance for the program totaled $3,806,395.
The Unemployment Insurance program (ALN 17.225) is administered through a unique federal-state
partnership that was founded upon federal law, but implemented through state law. For the purposes
of presenting the expenditures of this program in the accompanying schedules of expenditures of
federal awards, both state and federal funds have been considered federal awards expended as denoted
with an # to the right of the ALN. The breakdown of the state and federal portions of the total program
expenditures is as follows:
State Portion $60,166,427
Federal Portion 1,795,699,516
Total $1,855,865,943
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic Security (CARES)
Act, granted the Mississippi Department of Finance and Administration (DFA), as the State’s Fiscal
Agent, $1.25 billion in Coronavirus Relief Funds (CRF) (ALN 21.019). In order to expedite the
spending of the funds to abide by the initial period of performance end date of December 30, 2020,
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
the Mississippi State Legislature passed several pieces of legislation that directed the Mississippi
Department of Finance and Administration to allocate the CRF grant funds to various other state
agencies. These state agencies are considered part of the “prime recipient” along with DFA; therefore,
no subrecipient relationship existed within the regulations of the CRF grant. In order to audit these
funds, audits of expenditures were performed at each state agency that received CRF monies. Total
CRF grant expenditures, as reported under DFA in the State’s Schedule of Federal Expenditures,
totaled $1,197,036,463 as of June 30, 2021. These expenditures were expended by state agencies
under the prime recipient as follows:
State Agency Expenditures
Administrative Offices of the Court $ 2,121,785
Attorney General's Office 147,898
Department of Agriculture and Commerce 7,914,238
Department of Corrections 14,356,758
Department of Education 187,310,893
Department of Employment Security 216,582,402
Department of Finance and Administration 383,673,863
Department of Mental Health 1,361,193
Department of Revenue 1,499,999
Development Authority 161,786,171
Emergency Management Agency 122,714,895
Information Technology Service 6,132,311
Office of the State Auditor* 640,875
Secretary of State 265,358
State Department of Health 87,879,020
Veterans Affairs Board 2,648,777
$ 1,197,036,436
*costs paid to the Office of the State Auditor were audit fees related to CRF funds
E. Expenditures reflected in ALN 66.458 - Capitalization Grants for Clean Water State Revolving Funds
- include loans to local governments for developing or constructing water treatment facilities. The
funding source for these loans includes federal grant funds and state funds. In subsequent years, local
governments will be required to repay these funds to the Mississippi Department of Environmental
Quality. When received, these funds will be redistributed to local governments through new loans for
additional water treatment facility projects. The outstanding loan balance for the year ended June 30,
2021, was $394,794,336. Total disbursements for new loans for the year ended June 30, 2021, totaled
$31,894,894. Administrative costs associated with the program for the year ended June 30, 2021,
totaled $1,267,938.
F. Expenditures reflected in ALN 66.468 - Capitalization Grants for Drinking Water State Revolving
Funds - include loans to counties, municipalities and other tax exempt water systems organizations for
construction of new water systems, the expansion or repair of existing water systems, and/or the
consolidation of new or existing water systems. The funding source for these loans includes federal
grant funds and state funds. In subsequent years, the entities will be required to repay these funds to
the Mississippi Department of Health. When received, these funds will be used to make new loans for
the program activities. The outstanding loan balance for the year ended June 30, 2021, was
$170,872,358. Total disbursements for new loans made during fiscal year 2021 totaled $13,983,281.
Administrative costs associated with the program for the year ended June 30, 2021, totaled $689,642.
42
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
G. State Aid Road Construction is a division of the Mississippi Department of Transportation (MDOT).
I,
Federal financial assistance in the amount of $38,122,591 related to State Aid Road Construction is
included on the schedules of expenditures of federal awards under Transportation Department program
20.205 - Highway Planning and Construction.
Noncash Assistance.
The State of Mississippi participated in several federal programs in which noncash benefits were
provided through the state to eligible program participants. These noncash benefits programs are
identified on the schedules of expenditures of federal awards with an @ to the right of the ALN. A
listing of these programs follows:
ALN Program Name
10.555 National School Lunch Program (NSLP)
10.559 Summer Food Service Program for Children (SFSPC)
10.569 Emergency Food Assistance Program (Food Commodities)
¢ ALN 10.555 — National School Lunch Program received $42,157,492 including cash
assistance and noncash assistance. Cash assistance totaled $22,985,568 and noncash
assistance totaled $19,171,924.
¢ ALN 10.559 — Summer Food Service Program for Children expended $244,987, 129
including cash assistance and noncash assistance. Cash assistance totaled
$244,715,408 and noncash assistance totaled $271,721.
¢ ALN 10.569 — Emergency Food Assistance Program (Food Commodities) expended
$7,808,425 all of which was in noncash assistance.
Contingencies.
The State of Mississippi has received federal grants for specific purposes that are subject to audit by
the grantor agencies. Entitlements to these resources are generally conditional upon compliance with
the terms and conditions of grant agreements and applicable federal regulations, including the
expenditure of resources for allowable purposes. Any disallowance resulting from an audit may
become a liability of the State.
The Office of the Governor — Division of Medicaid has been notified by the Centers for Medicare and
Medicaid Services (CMS) of a potential claim relative to potential overpayments by CMS under
Medical Assistance Program grants that may have been made between 1981 and 2009 to a number of
states, including Mississippi. CMS is working with the Division of Medicaid, as well as various other
states, to resolve the discrepancies. The amount questioned by CMS approximates $28 million for the
Division of Medicaid.
Additionally, the Division of Medicaid has also been notified by the Office of the Inspector General
(OIG) of a potential claim relative to unallowable school-based Medicaid administrative costs for
federal fiscal years 2010 through 2012. The amount determined by the OIG to be unallowable was
$21,200,000.
43
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
J. The State of Mississippi's major federal programs for the year ended June 30, 2021, were based on
federal expenditures/distributions/issuances and risk assessments as defined in Note 2:A. Those
programs are as follows:
CFDA
Number Program
Name
10.542 Pandemic EBT Food Benefits
Supplemental Nutrition Assistance Program Cluster
10.551 Supplemental Nutrition Assistance Program (SNAP)
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance
Program
Child Nutrition Cluster
10.553 School Breakfast Program (SBP)
10.555 National School Lunch Program (NSLP)
10.556 Special Milk Program for Children (SMP)
10.559 Summer Food Service Program for Children (SFSP)
10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children
10.558 Child and Adult Care Food Program
12.401 National Guard Military Operations and Maintenance (O&M) Projects
14.228 Community Development Block Grants
17.225 Unemployment Insurance
Highway Planning and Construction Cluster
20.205 Highway Planning and Construction
20.219 Recreational Trails Program
20.224 Federal Lands Access Program
21.019 Coronavirus Relief Fund
21.023 Emergency Rental Assistance Program
64.015 Veterans State Nursing Home Care
84.010 Title I Grants to Local Educational Agencies
Special Education Cluster (IDEA)
84.027 Special Education — Grants to States IDEA, Part B)
84.173 Special Education — Preschool Grants (IDEA Preschool)
84.425 Education Stabilization Fund (ESF)
44
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
93.268
93.323
93.558
93.568
93.575
93.596
93.667*
93.767
93.775
93.777
93.778
96.001*
97.050
Immunization Cooperative Agreements
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
Temporary Assistance for Needy Families (TANF)
Low-Income Home Energy Assistance
CCDF Cluster
Child Care and Development Block Grant
Child Care Mandatory and Matching Funds of the Child Care
and Development Fund
Social Services Block Grant
Children’s Health Insurance Program
Medicaid Cluster
State Medicaid Fraud Control Units
State Survey and Certification of Health Care Providers and Suppliers
(Title XVIII) Medicare
Medical Assistance Program (Medicaid; Title XIX)
Disability Insurance/SSI Cluster
Social Security Disability Insurance
Presidential Declared Disaster Assistance to Individuals and Households — Other Needs
* Denotes a Type B Program
45
STATE OF MISSISSIPPI
Notes to Schedules of Expenditures of Federal Awards (continued)
Appendix “A”
The following state agencies have negotiated an indirect cost rate and have not opted to use the de
minimis rate of 10% as allowed in Uniform Guidance:
Board of Animal Health
Department of Agriculture & Commerce
Department of Education
Department of Employment Security
Department of Environmental Quality
Department of Finance & Administration
Department of Health
Department of Human Services
Department of Marine Resources
Department of Mental Health
Department of Rehabilitation Services
Department of Transportation
Department of Wildlife Fisheries & Parks
Division of Medicaid
Mississippi Attorney General
Mississippi Community College Board
Mississippi Development Authority
Mississippi Emergency Management
Mississippi Military Department
Mississippi Veterans Affairs
Soil and Water Conservation Commission
46
Schedule of Findings and Questioned Costs
Part 1 —-Summary of Auditor’s Results
(This page left blank intentionally.)
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 1 - SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor’s report issued: Unmodified
Internal control over financial reporting:
. Material weaknesses identified? xX yes no
° Significant deficiencies identified? xX yes none reported
Noncompliance material to financial
statements noted? yes xX no
Federal Awards
Internal control over major programs:
° Material weaknesses identified? _X_yes ___no
. Significant deficiencies identified? _X_ yes ___ none reported
Type of auditor’s report issued on compliance for major programs:
Summary of Opinions
ALN(s) Major Program Name Type of
Opinion
10.542 Pandemic EBT Cards Qualified
10.557 Supplemental Nutrition Assistance Program (SNAP) for | Unmodified
Women, Infants and Children (WIC)
10.558 Child and Adult Care Program Qualified
10.551, 10.561 Supplemental Nutrition Assistance Program Qualified
10.553, 10.555, 10.556, 10.559 | Child Nutrition Cluster Unmodified
12.401 National Guard Military Operations and Maintenance _ | Unmodified
14.228 Community Development Block Grant Unmodified
17.225 Unemployment Insurance Adverse
21.019 Coronavirus Relief Fund Adverse
21.023 Emergency Rental Assistance Program Qualified
20.205, 20.219, 20.224 Highway Planning and Construction Cluster Qualified
64.015 Veterans State Nursing Home Care Disclaimer
84.010 Title I Grants to Local Educational Agencies Qualified
47
84.027, 84.173 Special Education Cluster (IDEA) Qualified
84.425C, 84.425D, 84.425R Education Stabilization Fund Qualified
93.268 Immunization Cooperative Agreements Unmodified
93.323 Epidemiology and Laboratory Capacity for Infectious | Unmodified
Disease
93.568 Low-Income Home Energy Assistance Program Qualified
93.767 Children’s Health Insurance Program (CHIP) Qualified
93.558 Temporary Assistance for Needy Families (TANF) Qualified
93.575, 93.596 Child Care Development Fund (CCDF) Cluster Qualified
93.775, 93.777, 93.778 Medicaid Cluster Qualified
97.050 Presidential Declared Disaster Assistance to Individuals | Qualified
and Households — Other Needs
96.001 Social Security Disability Insurance Cluster Unmodified
93.667 Social Services Block Grant Qualified
Any audit findings disclosed that are
required to be reported in accordance
with 2 CFR 200.516(a)?
X_ yes
48
STATE OF MISSISSIPPI
Schedule of Findings and Questioned Costs
Part 1 - Summary of Auditor’s Results (continued)
CFDA
Number Major Program Identification
10.542 Pandemic EBT Cards
SNAP Cluster
10.551 Supplemental Nutrition Assistance Program
10.561 State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program
10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children
10.558 Child and Adult Care Program
Child Nutrition Cluster
10.553 Child Nutrition Cluster
10.555 Child Nutrition Cluster
10.556 Child Nutrition Cluster
10.559 Child Nutrition Cluster
12.401 National Guard Military Operations and Maintenance
14.228 Community Development Block Grant
17.225 Unemployment Insurance
Highway Planning and Construction Cluster
20.205 Highway Planning and Construction
20.219 Recreational Trails Program
20.224 Federal Lands Access Program
21.019 Coronavirus Relief Fund
21.023 Emergency Rental Assistance Funding
64.015 Veterans State Nursing Home Care
84.010 Title I Grants to Local Educational Agencies
Special Education Cluster (IDEA)
84.027 Special Education — Grants to States (IDEA, Part B)
84.173 Special Education — Preschool Grants (IDEA, Preschool)
49
84.425D
84.425C
84.425R
93.268
93.323
93.558
93.568
93.575
93.596
93.667*
93.767
93.775
93.777
93.778
96.001*
97.050
Education Stabilization Fund
Elementary and Secondary School Emergency Relief Fund
Governor’s Emergency Education Relief Fund (GEER)
Coronavirus Response and Relief Supplemental Appropriations Act, Non-
public schools
Immunization Cooperative Agreements
Epidemiology and Laboratory Capacity for Infectious Disease
Temporary Assistance for Needy Families (TANF) State Programs
Low Income Home Energy Assistance Program
CCDF Cluster
Child Care and Development Block Grant
Child Care Mandatory and Matching Funds of the Child Care
and Development Fund
Social Services Block Grant
Children’s Health Insurance
Medicaid Cluster
State Medicaid Fraud Control Units
State Survey and Certification of Health Care Providers and Suppliers
(Title XVIII) Medicare
Medical Assistance Program
Disability / SSI Cluster
Presidential Declared Disaster Assistance to Individuals and Households - Other
needs
*Denotes a Type B Program
Dollar threshold used to distinguish between
Type A and Type B programs: $30,000,000
Auditee qualified as low-risk auditee? yes X__no
50
Schedule of Findings and Questioned Costs
Part 2 — Financial Statement Findings
(This page left blank intentionally.)
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 2 — FINANCIAL STATEMENT FINDINGS
Introduction
This part of the Schedule of Findings and Questioned Costs presents audit findings classified as material
weaknesses, significant deficiencies and material noncompliance that are related to the financial statements
and are required to be reported in accordance with Government Auditing Standards.
Findings are arranged in order by state agency. Each finding has one of the following designations:
** Material Weakness — A deficiency, or a combination of deficiencies, in internal control, such
that there is a reasonable possibility that a material misstatement of the state’s financial
statements will not be prevented, or detected and corrected on a timely basis.
“+ Significant Deficiency — A deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those
charged with governance.
«* Material Noncompliance — Matters coming to the auditor’s attention relating to the state’s
compliance with certain provision of laws, regulations, contracts and grant agreements,
noncompliance with which could have a direct and material effect on the determination of the
financial statement amounts.
51
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Number
PART 2 — FINANCIAL STATEMENT FINDINGS
Finding and Recommendation
DEPARTMENT OF CORRECTIONS
MATERIAL WEAKNESS
2021-005
Repeat Finding
Criteria
Condition
Cause
Effect
Recommendation
Strengthen Controls Over Canteen Services Compensation.
Yes; 2020-019; Material Weakness Finding.
Management is responsible for establishing and maintaining effective internal
control over financial reporting. Internal controls should allow management or
employees in the normal course of performing their assigned functions to prevent
or detect material misstatements in the financial reporting of all Funds.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that reconciliations of accounting data be timely and detailed in
order to ensure accuracy and reliability.
The Mississippi Department of Corrections (MDOC) has contracted with Premier
Supply Link, LLC (Premier) to provide canteen services toinmates statewide. The
contract is a net-of-fee contract whereby Premier provides canteen services and
MDOC is compensated based on a determined percentage of the retail sales of
canteen items to inmates. The MDOC relies on Premier invoices and supporting
documentation related to retail sales to determine MDOC’s compensation
accounted for in the Inmate Welfare Fund. There is no review of Premier’s monthly
calculation of MDOC’s compensation and verification of the retail sales and
supporting documentation.
The Mississippi Department of Corrections’ accounting policies and procedures do
not provide for verification of the canteen sales.
The lack of proper controls over canteen commissions could allow for inadvertent
errors or fraud related to canteen commissions.
Management should implement a more detailed process for the review and approval
of thecanteen services compensation. As a part of this process, management should
consider performing an annual audit of the canteen services information utilized to
determine the canteen compensation. Additionally, the Mississippi Department of
53
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Corrections should consider having Premier obtain a Service Organization Control
(SOC) | report to provide independent verification of adequacy of their system of
controls.
Views of Responsible
Officials The Mississippi Department of Corrections concurs with the finding. See
additional information in Management’s Corrective Action Plan at page 245.
54
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DEPARTMENT OF EDUCATION
SIGNIFICANT DEFICIENCY
2021-006
Repeat Finding
Criteria
Condition
Strengthen Controls Over the Preparation of the Federal Grant Activity Schedule.
Yes; 2020-12; Material Weakness.
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when control activities exist. This includes a review performed to verify
the accuracy and completeness of financial information reported.
The Mississippi Agency Accounting Policies and Procedures (MAAPP) Manual
Section 27.30.60 states, “The Federal Grant Activity schedule supports amounts
reported on the GAAP Packet for federal grant revenues, receivables, deferred
revenues and expenditures. The schedule is also used for preparing the Single Audit
Report required by the Single Audit Act...and the State’s audit requirements. The
amounts on this schedule should be reconciled by the agency with amounts reported
on federal financial reports.”
The Mississippi Department of Education (MDE) did not update the Grant Schedule
for all changes to grants amounts, grant numbers, and grant dates that occurred
during the fiscal year. During testwork of the Grant Schedule, the auditor noted
errors in reporting for programs. Examples of these errors include:
e One instance in which the sub-grantees’ expenditures of $20,064,934 were
not properly captured on either the Subgrant Schedule form 27.30.70 or
on the Grant Schedule form 27.30.60 in the column for amounts passed to
sub-grantees.
e Two instances in which the grant number per the Grant Schedule did not
agree to the grant number assigned to the federal award in Mississippi
Accountability System for Government Information and Collaboration
(MAGIC).
e Eight instances in which the grant award per the Grant Schedule did not
agree with the grant award.
e Five instances in which the grant funding period end date reported on the
Grant Schedule did not match the grant funding period end date per the
grant award.
e One instance in which the cumulative expenditures for the federal
subprogram per the Grant Schedule exceeded the allocated amount
assigned by the agency to the federal subprogram within the block grant.
55
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Cause
Effect
Recommendation
Views of Responsible
Officials
e Three instances in which the grant number reported on the Grant Schedule
did not match the grant number listed on the grant award.
The Mississippi Department of Education did not enforce proper internal control
structures over the preparation of the Federal Grant Activity Schedule and allowed
multiple errors in the schedule to remain by agency personnel.
Without proper internal control structures over the preparation of the Federal Grant
Activity Schedule, erroneous grant numbers, grant award amounts, and “Amount
Passed to Subrecipients” could be reported on the Federal Grant Activity Schedule.
In addition, the errors would be passed thru to the State’s Schedule of Federal
Expenditures and could result in reporting errors on the State’s Single Audit Report.
We recommend the Mississippi Department of Education strengthen controls over
the preparation of the Federal Grant Activity Schedule to ensure all grant award
information and amounts reported are accurate and correct.
The Mississippi Department of Education concurs with the finding. See additional
information in Management’s Corrective Action Plan at page 247.
56
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DEPARTMENT OF EMPLOYMENT SECURITY
MATERIAL WEAKNESS
2021-008
Repeat Finding
Criteria
Condition
Strengthen Controls over the Unemployment Insurance Benefits Paid.
Yes; 2020-007; Material Weakness.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) specifies that a
satisfactory control environment is only effective when control activities, such as
authorization, approval, verification, and adherence to policy and procedures are
implemented and followed. These activities are essential to minimizing the risk of
fictitious claims and misstated financial position.
The Mississippi State Code Annotated (1972) §71-5-511 states that one is eligible
to receive benefits that “has been unemployed for a waiting period of one (1) week”;
“participates in reemployment services, such as job search assistance services, if, in
accordance with a profiling system established by the department, it has been
determined that he is likely to exhaust regular benefits and needs reemployment
99, 66s
services”; “is able to work, available for work and actively seeking work”.
The Mississippi State Code Annotated §71-5-505(1) states “For weeks beginning
on or after July 1, 1991, each eligible individual who is totally unemployed or part
totally unemployed in any week shall be paid with respect to such week a benefit in
an amount equal to his weekly benefit amount less that part of his wages, if any,
payable to him with respect to such week which is in excess of Forty Dollars
($40.00).”
The Mississippi State Code Annotated $71-5-513 describes reason for separation
that disqualifies the individual as “(a) For the week, or fraction thereof, which
immediately follows the day on which he left work voluntarily without good cause,
if so found by the department, and for each week thereafter until he has earned
remuneration for personal services performed for an employer, as in this chapter
defined, equal to not less than eight (8) times his weekly benefit amount, as
determined in each case; however, marital, filial and domestic circumstances and
obligations shall not be deemed good cause within the meaning of this subsection.
Pregnancy shall not be deemed to be a marital, filial or domestic circumstance for
the purpose of this subsection. (b) For the week, or fraction thereof, which
immediately follows the day on which he was discharged for misconduct connected
with his work, if so found by the department, and for each week thereafter until he
has earned remuneration for personal services performed for an employer, as in this
chapter defined, equal to not less than eight (8) times his weekly benefit amount, as
determined in each case. (c) The burden of proof of good cause for leaving work
shall be on the claimant, and the burden of proof of misconduct shall be on the
employer.”
The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted by the
federal government in response to the COVID-19 pandemic required state
57
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
unemployment agencies to increase the amount of benefits paid to claimants.
Additionally, claimants were able to collect unemployment payments for an
expanded time frame, and claimants who would otherwise not qualify for benefits
(such as independent contractors and self-employed persons) were able to qualify
for benefits. In order to process the multitude of claims in an expeditious manner,
Mississippi Department of Employment Security (MDES) opted to override the
existing controls designed in the internal control system. Proven and tested controls
over Unemployment Insurance claims were altered or disregarded for the periods
of March 2020 through December 2020. Controls altered for the claims submitted
in the noted timeframes were:
e Waived; One week waiting period; March 8, 2020 — December 26, 2020;
e Waived; Work Search Requirements; March 8, 2020 — August 8, 2020;
e Waived; Able to work, Available to work, and Actively Seeking Work
(A&A); March 8, 2020 — September 26, 2020;
e Altered; Weekly Earning Allowance increased from $40 to $200; May 3,
2020 — September 26, 2020; and
e Altered; Reason for separation from ALE employers in base period
changed to separation from MOST RECENT employer; March 8, 2020 -
September 26, 2020.
Additionally, claims were approved without social security number verification
during the period March 2020 — May 2020.
Due to these controls being ignored or overridden, MDES was unable to properly
monitor the immense influx of claims and to properly vet those claims for fraud.
During fiscal year 2021, total unemployment benefit claims increased from
$2,146,060,996 (fiscal year 2020) to $2,475,899,125 (fiscal year 2021), a 15%
increase. Overpayments of benefits was noted to increase from $117,948,403
(fiscal year 2020) to $473,787,010 (fiscal year 2021), a 301% increase. These
payments include:
e Payments made to individuals who never lost or had a reduction in wages;
e Fraudulent payments due to stolen identity;
e Payments made to incarcerated individuals; and
e Payments made due to international unemployment fraud.
In particular, MDES inadvertently allowed incarcerated individuals to receive
payment when the control that required claimants to verify that they were “actively
seeking work” was waived. Incarcerated individuals were then able to apply for
benefits and receive approval without any additional verification from MDES.
58
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Cause
Effect
Recommendation
Views of Responsible
Officials
2021-016
Repeat Finding
Criteria
MDES personnel were initially overwhelmed by the influx of claims and were
unable to accurately report the amount of increased loss the State was subject too,
and were unable to adequately monitor the fraud that was reported by individuals
when they received notification of benefits received.
MDES did not have proper internal controls in place due to overriding or waiving
existing controls. This caused MDES the inability to verify that unemployment
claims were paid to proper claimants.
Failure to properly enable controls and follow policies and procedures increases the
risk of fraud and misappropriation, which can result in material misstatements of
financial statements. The waiver of strict controls on Unemployment Insurance
benefits resulted in an increase of known overpayments of 301% from fiscal year
2020 to fiscal year 2021.
We recommend the Mississippi Department of Employment Security strengthen
controls over policies and procedures to ensure internal controls are never disabled
or circumvented. Additionally, we recommend further analysis of the
overpayments of unemployment claims be performed in order to maximize the
potential for recovery of fraudulent payments.
The Mississippi Department of Employment Security does not concur with the
finding. See additional information in Management’s Corrective Action Plan at
page 263; and the Auditor’s Response to the Corrective Action Plan at page 65 and
271.
Strengthen Controls over the Reconciliation of the State’s Financial Accounting
System (MAGIC) to the Third-Party Unemployment Software (ReEmploy).
Yes; 2020-006; Material Weakness.
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSOand the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specifies that a satisfactory control environment is only
effective when control activities exist. This includes but is not limited to the review
process of transactions, proper support of transactions, proper documentation and
support of methodologies used in accounting practices, proper support of
information and communication within the agency, and a commitment to
competence by management.
The Mississippi Agency Accounting Policies and Procedures (MAAPP) Manual
Section 27.30.05 states that supporting schedules provide the details, which support
the adjusted MAGIC balances on the GAAP Trial Balance.
59
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Condition
The Mississippi Agency Accounting Policies and Procedures (MAAPP) Manual
Section 2.10.20 states that Proprietary Funds apply accrual accounting principles
appropriate for business enterprises.
The Mississippi Department of Employment Security (MDES) records statutorily
required GAAP entries in the Mississippi Accountability System for Government
Information and Collaboration (MAGIC) software during year-end by utilizing
summarized reports from the Unemployment Software -ReEmploy. The majority
of the summarized reports used are historical reports that are incapable of being
reproduced due to ReEmploy reporting values as of close of business day that the
queries are ran. MDES currently does not save transactional reports that corroborate
with summarized reports used and required significant time to produce adequate
support of summarized values used in GAAP entries recorded. MDES required a
period of multiple weeks to four months to provide support to audit requests for
GAAP entries recorded0.
During review of the supporting documentation for GAAP entries recorded by
MDES, Auditors noted several material misstatements due to incorrect values being
used, due to portions of entries being unrecorded, and due to improper revenue
recognition.
As a result of these incorrect values and improper revenue recongnition, the
following misstatements were noted:
e Accounts receivable were understated by $58,935,428;
e Allowance for doubtful accounts were understated by $30,646,422;
e Due to federal government was understated by $127,078,028;
e Unearned revenue was understated by $13,259,379; and
e Subsidies was understated by $98,789,022.
Additionally, MDES does not currently have a transactional accounting system for
Enterprise Funds. MODES uses internal trial balances created from daily and
monthly banking activity worksheets. These worksheets only show summarized
transactions and creates a poor environment for auditors to trace individually
selected transactions to amounts recorded by MDES. Due to MDES not utilizing
MAGIC as the accounting system for Enterprise Funds, which requires supporting
documentation for entries recorded, auditors had to reconcile transactional support
provided by MDES and determine the reasoning behind differences noted between
transactional support and summarized values. Due to MDES only using banking
activity and ReEmploy summarized reports for financial reporting of Enterprise
Funds, MDES does not have an adequate control environment over individual
transactional review.
60
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Cause The Mississippi Department of Employment Security (MDES) did not properly
reconcile amounts amalgamated in the reports from ReEmploy to the financial
information. _MDES only performed financial statement reconciliations of
unemployment data annually at the end of the fiscal year. The information was also
not entered into the statewide accounting system MAGIC but once at year-end.
These untimely reconciliations and agreement of financial statements to ReEmploy
caused excessive delays in the preparation of financial statements of MDES.
Additionally, MDES operates on a cash basis accounting for transactions in
Enterprise Funds and relies on year-end GAAP entries to present on a modified-
accrual basis. Enterprise Funds are required to be reported on an accrual basis
throughout the entire year.
Effect Failure to properly record accruals and failure to perform timely and accurate
reconciliations of data greatly increase the risk of fraud and misappropriation of
assets and liabilities, which can result in material misstatements of financial
statements. Several accounts were understated for fiscal year 2021 and required
material audit adjustments to correctly report the financial status of the Mississippi
Department of Employment Security.
Recommendation We recommend the Mississippi Department of Employment Security strengthen
controls to endure accrual entries are correct and to record entries in the statewide
accounting system more frequently than once annually. Additionally, personnel
should complete timely and accurate reconciliations to ensure information is
reported correctly.
Views of Responsible
Officials The Mississippi Department of Employment Security concurs with the finding.
See additional information in Management’s Corrective Action Plan at page 267.
2021-017 Strengthen Controls over the Identification of Unemployment Benefit
Overpayments.
Repeat Finding No.
Criteria GASB Statement 62, paragraph 83 (Reporting a Change in Accounting Estimate)
states the effect of a change in accounting estimate should be accounted for in (a)
the period of change if the change affects that period only or (b) the period of change
and future periods in the change affects both.
The Mississippi State Code Annotated (1972) $71-5-517 states that any benefits
erroneously paid to claimant may be set up as an overpayment to the claimant; and
must be liquidated before any future benefits can be paid to the claimant.
61
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Condition
Cause
Effect
The Mississippi Agency Accounting Policies and Procedures (MAAPP) Manual
Section 27.30.05 states that supporting schedules provide the details, which support
the adjusted MAGIC balances on the GAAP Trial Balance.
The Mississippi Department of Employment Security (MDES) adopted a change in
the calculation of the unemployment benefit overpayment allowance for doubtful
accounts estimate for overpayments recorded in ReEmploy (the unemployment
software utilized by MDES) as of June 30, 2021. Auditor notes that using the
previous method to calculate the allowance for doubtful accounts would result in an
uncollectable percentage of 68% whereas the new method lowered the
uncollectable percentage to 52%. MDES reported the uncollectable percentage as
88.75% in the prior year. During the review of the new accounting estimate
calculation, auditor noted MDES did not properly document the purpose nor reason
for the change in the method. Despite the decrease in the percentage calculated,
auditor noted the balance reported for allowance for doubtful accounts of
$246,798,051 increased 150% from the prior year reported balance of $98,674,383.
Secondly, MDES used incorrect values to record additional overpayments recorded
in ReEmploy as of June 30, 2021. MDES incorrectly reconciled amounts pulled
using two separate ReEmploy queries by using Pandemic Unemployment
Assistance (PUA) program disbursements for documented Pandemic Emergency
Unemployment Compensation (PEUC) program disbursements. Auditor noted the
use of PUA disbursements improperly increased MDES Accounts Receivable
account balances by $1,080,926.16.
Additionally, during review of a sample of 320 unemployment benefit payments
recorded by MDES during fiscal year 2021, the auditor noted 12 duplicate payments
in the amount of $3,007 that were not properly recorded by MDES as an
overpayment for future collections. During fiscal year 2021, MDES disbursed a
total of $2,475,899,125 in unemployment benefit payments. Due to the duplicate
payments not being recorded by MDES, auditor determined a projected material
misstatement of $60,016,354 in potential overpayments was not recorded by
MDES.
The Mississippi Department of Employment Security (MDES) did not evaluate the
change of methodology used in the accounting estimate concerning the allowance
of doubtful accounts. Also, MDES currently does not perform a review on duplicate
payments for payments made with the same close week ending denoted within
ReEmploy — unemployment benefit payment system. MODES solely relies on
controls built within ReEmploy to prevent duplicate payments. Additionally,
MDES did not use appropriate federal program disbursement totals for year-end
GAAP entries.
Departure from historical methodology in calculation of accounting estimates
without proper documentation and disclosures may result in material effects to
account balances not being appropriately disclosed to report end users. Several
accounts were understated for fiscal year 2021 and required material audit
adjustments to correctly report the financial status of MDES.
62
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Recommendation We recommend the Mississippi Department of Employment Security follow
guidance from the Governmental Accounting Standards Board (GASB) when
making significant changes to accounting estimates used in final financial reported
account balances.
Additionally, we recommend the Mississippi Department of Employment Security
strengthen controls over policies and procedures concerning unemployment benefit
payments to ensure the approved maximum benefit is paid to eligible claimants.
We further recommend the Mississippi Department of Employment Security
strengthen controls to ensure accrual entries are correct and to record entries in the
statewide accounting system more frequently than once annually. Additionally,
personnel should complete timely and accurate reconciliations to ensure
information is reported correctly.
Views of Responsible
Officials The Mississippi Department of Employment Security concurs with the finding.
See additional information in Management’s Corrective Action Plan at page 267.
2021-018 Strengthen Controls over the Overpayments of Employer Contributions.
Repeat Finding No.
Criteria The Mississippi State Code Annotated (1972) §71-5-383 states the commission is
authorized and empowered to refund, without interest, such contributions, interest,
and penalties as it may determine were paid erroneously by an employer, or may
make or authorize an adjustment thereof in connection with subsequent contribution
payments, provided the employer shall make written application for such refund or
adjustment within three (3) years to the last day of the calendar year in which the
services of individuals in employment, with respect to which such contributions
were erroneously paid, were performed. For like cause and within the same period,
adjustment or refund may be made on the commission’s own initiative.
Additionally, Mississippi Department of Employment Security Administrative
Code 600.03 states overpayment of contributions by an employer for one period
may be credited on subsequent contributions due.
Condition During review of employer assessments collected by the Mississippi Department of
Employment Security (MDES) during fiscal year 2021, the auditor noted MDES
improperly recorded overpayments of employer assessments as revenue. Per
discussion with agency personnel, employers were issued assessment letters that
improperly denoted the employer as delinquent towards required employer tax
payments. Due to this designation, employers were required to pay the highest
assessment rate plus penalties, which created a credit due to the employer once the
proper tax rate was applied to the employer’s assessment. MDES recorded
$13,259,380 in employer overpayments in fiscal year 2021 compared to $605,644
in fiscal year 2020 (an increase of 2,089%). MDES did not reach out to employers
63
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Cause
Effect
Recommendation
Views of Responsible
Officials
who submitted payment towards the improperly rated assessments at the time of
discovery of the error. Communication was not made to these employersuntil asked
by auditor if MDES had communicated to employers their current credit balance.
MDES’s current policy requires employers to request in writing a refund from
MDES within three years of the established credit balance to receive assessments
that were paid erroneously. Once the three year window has passed, MDES removes
the remaining employer credit balance from employers’ accounts without final
notification that the credit will soon expire. As of June 30, 2021, MDES has
removed $5,772,837.80 of expired employer credits.
Additionally, MDES did not effectively communicate between divisions the
policies and procedures of accounting for employer overpayments. The Tax
Division of MDES communicated that MDES must wait a period of three years to
claim any employer overpayment balance as revenue. However, the Business
Management Division of MDES improperly recognizes revenue immediately for
any and all employer overpayments as they are received. The improper recognition
of employer overpayments as revenue during fiscal year 2021 created a material
misstatement by understating Unearned Revenue by $13,259,380.
The Mississippi Department of Employment Security (MDES) did not have proper
controls in place to communicate with employers that improper rates were used in
calculation of the employer’s required assessment. Additionally, MDES does not
effectively communicate policies and procedures within divisions concerning the
recognition of revenue of employer overpayments.
Failure to notify employers of improperly excessive assessment rates used in
employer assessment calculations can result in employers not requesting a refund
within the statutory requirement of three years from the established overpayment.
Additionally improperly recording overpayments as revenue before the statutory
requirement of three years may result in material misstatements in reported revenue
balances.
We recommend the Mississippi Department of Employment Security strengthen
controls over policies and procedures to ensure employer overpayments are
properly recorded. Additionally we recommend communicating with employers
when overpayments are established due to improper assessment rates being used in
the assessment calculation.
The Mississippi Department of Employment Security does not concur with the
finding. See additional information in Management’s Corrective Action Plan at
page 268; and the Auditor’s Response to the Corrective Action Plan at page 66
and 272.
64
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Employment Security
(MDES) Management
Material Weakness
2021-008 Controls Should be Strengthened over Unemployment Insurance Benefits Paid.
The Office of the State Auditor (OSA) acknowledges that the Mississippi Department of Employment Security
(MDES) was faced with an unexpected and staggering task to ensure unemployment benefits were paid to
individuals during the pandemic. OSA also acknowledges that certain federal guidelines were provided that MDES
had to comply with in order to receive additional federal unemployment funds. While MDES’ response to the
finding focuses on the federal requirements and state guidance to waive or ignore existing controls, MDES fails to
identify any way that the agency mitigated any of the fraud risks or potential for overpayments created by waiving
or overriding these controls. This failure on the part of MDES resulted in a 301% increase in known overpayments
from fiscal year 2020 to 2021. This failure to safeguard the state’s assets is the basis for the material weakness
finding. Additionally, MDES fails to acknowledge that the agency was required by the same type federal guidance
referenced in their response to the finding (UIPL Letters and Change Notices) to ensure adequate and proper fraud
detection and prevention techniques were being utilized by the agency.
Moreover, while MDES did receive federal guidance on making unemployment payments more accessible to those
directly impacted by the pandemic, the options provided by the federal government were to either modify or suspend
the work search requirements for individuals or employers directly impacted by COVID-19 due to an illness in the
workplace or direction from a public health official to isolate or quarantine workers. States were also given the
flexibility to respond to the COVID-19 emergency in a broader way, if they chose to do so (emphasis added by
auditor). (Unemployment Insurance Program Letter Number 13-20, Change 1, Attachment 1, Question 2). MDES
chose to suspend the requirement for all unemployment claims, and not only those that arose from an illness in the
workplace or from an order to isolate or quarantine workers. The decision to implement broader flexibility and
completely waive work search requirements were made by MDES. By MDES’ own admission in other auditee
responses to OSA, MDES stated that they requested the Governor’s Office waive the specific requirements.
Additionally, in each Executive Order (1462, 1481, 1502, and 1510), MDES was given flexibility to reassess and
modify these measures prior to their expiration date in the orders.
Additionally, The Department of Labor (DOL) included program integrity language in all of the major pieces of
guidance associated with the state implementation of the CARES Act programs and provisions (Unemployment
Insurance Program Letter Number 28-20). Program Integrity requirements for the regular unemployment program
and unemployment programs authorized by the CARES Act were to operate in tandem, and CARES Act program
requires that states must ensure that only eligible individuals receive benefits (Unemployment Insurance Program
Letter Number 23-20). Both UIPL letters 23-20 and 28-20 specify that the states must make efforts to rapidly and
proactively prevent, detect, and investigate fraudulent activity; establish and recover fraud overpayments; and
pursue criminal and civil prosecution to deter fraud. Specifically, states were strongly encouraged to implement
the following measures to minimize fraud in the unemployment system:
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
65
1) Social Security Administration Cross Match
2) Systematic Alien Verification for Entitlement
3) Incarceration cross matches
4) Internet Protocol Address checks
5) Data Analytics to cross reference claims for indicators of fraud.
Furthermore, many of the most effective tools to deter and detect fraud were available to MDES in the Integrity
Data Hub (IDH), and were available to states for well over a year. These included:
1) Interstate Suspicious Actor Repository to match claims across states
2) Foreign IP Address verification to receive flags on claims filed from IP addresses outside of the United
States
3) Data Analytic tools
4) Fraud Alert Systems
5) Identify Verification for fraud scoring information, including flagging synthetic identities.
MDES has stated that they utilize the IDH; however, auditors cannot determine how effectively these programs
were utilized considering the high amount of overpayments that were made during fiscal year 2021. Additionally,
one of the specific fraud risks the UIPL, incarceration cross matches, were not performed by MDES, and resulted
in Overpayments to incarcerated individuals. These incarcerated individuals were able to apply for benefits when
MDES overrode or turned off the automated controls and did not implement any compensating controls to ensure
payments were proper.
In summary, regardless of the federal requirements or Executive Orders issued, MDES is still responsible for
ensuring the accuracy of unemployment claims. In order to assure the accuracy of those claims, MDES should have
implemented compensating controls to safeguard the unemployment trust fund when other controls were waived or
overrode. The ultimate responsibility to ensure that unemployment payments were accurately paid out and that
overpayments were kept to a minimum is the responsibility of MDES personnel.
Material Weakness
2021-018 Strengthen Controls over the Overpayments of Employer Contributions.
According to multiple conversations with MDES personnel during the audit, MDES immediately recognized
employer overpayments as “Revenue” and moved the amounts to their Trust Fund from their clearing account,
which is a violation of generally accepted accounting principles as the money has not actually been “earned” until
the passage of the required three years.
Moreover, the MDES response states that they provide three forms of responses to employers regarding their
overpayments; however, this was not the practice in fiscal year 2021 until this matter was brought to Management’s
attention by the auditors. Auditors informed Management of this issue prior to December 2021, so any action taken
by the MDES Chief of Tax as outlined in the response was in reaction to the lack of controls over employer
contributions, and therefore cannot be used as a validation of the existence of controls. MDES states that these
overpayments can be refunded to the employer if the employer requests such a refund in writing; or the request
could be given at MDES discretion without a corresponding request. MDES needs to ensure employers are aware
of overpayments so that they can request these refunds, if so desired.
In conclusion, MDES needs to strengthen controls over employer overpayments so that the State’s employers are
not penalized by an error in MDES’ system and can be refunded overpayments timely.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
66
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DEPARTMENT OF
FINANCE AND ADMINISTRATION
MATERIAL WEAKNESS
2021-002
Repeat Finding
Criteria
Condition
Cause
Effect
Recommendation
Views of Responsible
Officials
Strengthen Controls Over the Change Logs of the Statewide Payroll and Human
Resource System (SPAHRS).
Yes; 2018-008, 2019-014 and 2020-04; Material Weakness Findings.
Good internal controls dictate that all transactions and other significant events be
clearly documented and readily available for examination. This audit trail, or
security audit log, documentation should include evidence on how transactions are
initiated, processed, recorded, and summarized. Proper audit trail documentation
also includes evidence of transactions that may have been voided, deleted, or
changed after approval and initiation. A “change log” should also be maintained
that summarizes any changes, especially those in the production environment.
Periodic reconciliations between the change log and a list of approved changes
should be performed to ensure all changes have been approved and authorized.
During testwork performed for fiscal year 2021, we noted the following:
e Security logging was not enabled in the Natural Security log settings.
e Reconciliations between approved changes and changes occurring in the
change log are not being performed.
There are inadequate controls surrounding SPAHRS security logging.
Failure to log transactional changes adequately and to periodically review logs for
appropriateness could result in untimely modification of data, security
configuration changes, or fictitious transactions.
We recommend that the Department of Finance and Administration enable the
Natural Security logging functionality and strengthen controls over the periodic
review of such logs.
The Mississippi Department of Finance and Administration concurs with the
finding. See additional information in Management’s Corrective Action Plan at
page 291.
2021-003
Repeat Finding
Require Chief Fiscal Officers of State Agencies to hold Minimum Accounting
Qualifications and Attend Mandatory Training.
Yes; 2016-012, 2017-006, 2018-024, 2019-015 and 2020-010; Material Weakness
Findings
67
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Criteria
Condition
Cause
Effect
Recommendation
Views of Responsible
Officials
Section 7-7-3 Miss. Code Ann. (1972) states that the State Fiscal Officer (as defined
by Section 21-104-6 Miss.Code Ann. (1972) as the Executive Director of the
Department of Finance and Administration shall conduct training seminars on a
regular basis to ensure that agencies have access to persons proficient in the correct
use of the statewide accounting system.
Section 7-7-211 Miss. Code Ann. (1972) authorizes the State Auditor to
establish training course and programs for the personnel of the various state
and local governmental entities. These courses shall include, but are not limited to,
topics on internal control, purchasing and property, governmental accounting
and financial reporting, and internal auditing.
The Internal Control — Integrated Framework published by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) specifies
that a satisfactory control environment is only effective when there is a
commitment to competence that demonstrates a commitment to retain competent
employees. This principle of competency can be achieved through analysis of
skills required for positions, training and development training.
During testing for fiscal year 2020, we noted, through inquiry and observation,
that the overall expertise level of accounting staff in various state agencies
was not consistent, and that job requirements often did not specify applicants
hold any specific accounting or governmental knowledge. We also noted that,
although the Department of Finance and Administration (DFA) held GAAP
conversion and accounting training courses to aid state agencies in compiling
financial information, it was not a mandatory requirement and often agency
personnel did not attend. Likewise, qualification and skill requirements were
not consistently applied to Chief Financial Officers throughout the various state
agencies.
The lack of overall understanding and application of proper accounting standards
required the centralized accounting function of the state, DFA, to prepare
significant adjusting and reclassification entries in order to prevent material
misstatement. While the majority of entries would not have materially
misstated accounts individually, in the aggregate, without adjustment, the
financials would have been materially misstated.
Lack of consistently applied agency qualifications for accounting personnel.
The failure of the State to hire and retain competent staff could result in
material misstatement of the financial statements.
We recommend the Department of Finance and Administration implement
mandatory training sessions for accounting personnel and Chief Fiscal Officers.
Additionally, we recommend the State of Mississippi implement minimum
qualifications for Chief Financial Officers.
Management at the Department of Finance and Administration concurs with
the finding. See additional information in Management's Corrective Action Plan
on Page 292.
68
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DEPARTMENT OF HUMAN SERVICES
MATERIAL WEAKNESS
2021-001
Repeat Finding
Criteria
Condition
Strengthen Controls to Ensure Proper Review Processes for Financial Reporting.
Yes; 2020-008; Material Weakness.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specifies that a satisfactory control environment is only
effective when control activities exist. This includes but is not limited to the review
process of transactions, proper support of transactions, proper documentation and
support of methodologies used in accounting practices, proper support of
information and communication within the agency, and a commitment to
competence by management.
The Mississippi Agency Accounting Policies and Procedures (MAAPP) Manual
Section 27.30.05 states that supporting schedules provide the details, which support
the adjusted MAGIC balances on the GAAP Trial Balance.
MAAPP Manual Section 30.20.10 states, “While each state employee has personal
responsibility for maintaining internal controls, the agency head is ultimately
responsible and must assume ownership for internal control. All agency
management must support the agency’s internal control philosophy, promote
compliance, and maintain control within their areas of responsibility. Chief
financial officers have key oversight and policy enforcement roles over fiscal
matters. Other agency managers may hold lead responsibility for compliance with
non-financial aspects of laws, directives, policies, procedures, and the code of
ethics... Agencies are to maintain adequate written documentation for activities
conducted in connection with risk assessments, internal control reviews, and
follow-up actions. This documentation is to be available for review by agency
management, the Office of State Auditor, and DFA.”
The Mississippi Department of Human Services (MDHS) operates by dividing daily
operations into different departments with different functions. During the audit for
FYE June 30, 2021, we noted that the different departments do not communicate
and exchange information. For example, the Grant Schedule is created using
information for the state fiscal end. These accruals and expenditures are not
reconciled with the TANF Programmatic Division’s federal fiscal year end
reporting. The agency does not have in place any overarching policies to ensure the
integrity and accuracy of information between divisions. Additionally, policies and
procedures in Budgets and Account and Grants Management divisions are often
unwritten or out of date. Lastly, the auditor noted that MDHS does not maintain
written policies and procedures over the review and approval of the Federal
Subgrant Activity Schedule. In the aggregate, these instances result in a material
weakness in the agency’s overall control environment. Examples of these errors
include:
69
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Cause
Effect
Recommendation
Views of Responsible
Officials
e Two instances in which the amounts recorded as “Passed to Subrecipients”
were coded to the incorrect CFDA number on the Schedule of Federal
Grant Activity.
e Nineteen instances in which amounts recorded as amounts passed to sub-
grantees on the Federal Subgrant Activity Schedule (form 27.30.30) did
not agree to amounts recorded as “amounts passed to subrecipients” on the
Schedule of Federal Grant Activity.
e Ninety-six instances in which amounts recorded as “Current Year
Subgrant Federal Expenditures” on the Federal Subgrant Activity
Schedule (form 27.30.70) did not agree to supporting documentation as
provided by the agency.
e One hundred forty-seven instances in which the amounts recorded as
“Paid to Sub-grantee” per the Federal Subgrant Activity Schedule (form
27.30.70) did not agree to amounts reported on the KOB1 report (Internal
Order Report) within the Mississippi Accountability System for
Government Information and Collaboration (MAGIC).
The Mississippi Department of Human Services did not possess or enforce proper
internal controls structures over financial reporting. Additionally, management has
not enforced a commitment to competence at the agency, and has allowed multiple
errors in financial reporting to remain undetected by agency personnel. Lack of
written policies has contributed to agency personnel not performing adequate
reviews over financial information. Lastly, different departments within the agency
do not communicate and reconcile accounting information between them to verify
the accuracy of that reported information.
Without proper internal control structures over financial reporting, erroneous
financial statements and corresponding schedules could be compiled, resulting in a
misrepresentation of the financial standing of the Mississippi Department of Human
Services.
We recommend management at the Department of Human Services evaluate
internal control procedures over the review and approval of GAAP Packet
information and the Federal Sub-Grant Activity Schedule. Additionally, we
recommend existing staff obtain the needed training to be able to accurately report
and review financial information, and that the agency develop overarching policies
aimed at ensuring communication about and reconciliation of financial statement
information is performed regularly.
The Mississippi Department of Human Services concurs with the finding. See
additional information in Management’s Corrective Action Plan at page 301.
70
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DEPARTMENT OF MARINE RESOURCES
MATERIAL WEAKNESS
2021-004
Repeat Finding
Criteria
Condition
Cause
Effect
Recommendation
Views of Responsible
Officials
Strengthen Controls Over Financial Reporting.
Yes; 2020-014; Material Weakness.
Per GASB Statement 33 related to voluntary nonexchange transactions, cash and
other assets that are provided in advance should be reported as unearned revenues
[liabilities] by recipients until allowable costs have been incurred. At this point,
revenues should be recognized for amount of the programmatic expenditures.
In addition, the Internal Control — Integrated Framework published by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) and
the U.S. Government Accountability Office Standards for Internal Control in the
Federal Government (Green Book) specifies that a satisfactory control environment
is only effective when control activities exist. This includes a review performed to
verify the accuracy of information reported to ensure that transactions are recorded
in the proper period and that invoices are not recorded twice.
During audit testing of federal revenue, for fund 5345300000, it was noted that
federal grant revenue received in fiscal year 2021 were recorded as unearned
revenue instead of matching programmatic expenditures that were incurred in
fiscal year 2021. As a result, revenues were understated and liabilities were
overstated by $6,051,392. In addition, expenditures in the prior year were
overstated and fund balance understated by $496,616 due to double counting of
an invoice in fiscal year 2020, resulting in a prior period adjustment.
The Mississippi Department of Marine Resources did not possess or enforce proper
internal controls structures over financial reporting. Errors in reporting revenue and
related liabilities were not identified in a timely manner. In addition, an invoice was
booked twice in the prior year.
The ending fund balance of fund 5345300000 was materially understated by
$6,548,008, and required an adjustment to correct the ending balance. The adjusted
fund balance at the end of the year should be $899,997.
We recommend that the Mississippi Department of Marine Resources strengthen
controls over the preparation and review of financial statements to ensure that errors
are identified and corrected in a timely manner.
The Mississippi Department of Marine Resources concurs with the finding;
however, they do not agree that it constitutes a material weakness in internal
controls. See additional information in Management’s Corrective Action Plan
at page 309.
71
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DEPARTMENT OF PUBLIC SAFETY
MATERIAL WEAKNESS
2021-009
Repeat Finding
Criteria
Condition
Cause
Effect
Recommendation
Views of Responsible
Officials
Strengthen Controls Over Financial Reporting.
Yes, 2020-016.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specifies that a satisfactory control environment is only
effective when control activities exist. This includes but is not limited to the review
process of transactions, proper support of transactions, proper documentation and
support of methodologies used in accounting practices, proper support of
information and communication within the agency, and a commitment to
competence by management.
During the audit, it was noted that the due to and from balances between Mississippi
Department of Public Safety intra-agency funds did not balance and eliminate when
consolidated. The Fingerprint Fund (3371H00000) billed the Highway Patrol Fund
(2271100000) for services provided between fiscal years 2014 — 2021. The
Fingerprint Fund recognized revenue and the related due from balance. However,
Highway Patrol Fund did not record the offsetting expense and due to balance.
Management concluded that the due from balance recorded in the Fingerprint Fund
was not collectible.
The Mississippi Department of Public Safety’s internal controls were not designed
to reconcile the due to and from balances for intra-agency funds that were not
required to submit a GAAP package to the Mississippi Department of Finance and
Administration. In addition, internal controls were not designed to analyze due
from balances for collectability.
The Mississippi Department of Public Safety’s assets were overstated by
approximately $1,203,568, current period revenues were overstated by
approximately $11,328 and the beginning fund balance was overstated by
$1,192,240. Asa result of this misstatement, and audit adjustment was recorded.
We recommend the Mississippi Department of Public Safety (DPS) strengthen
internal controls over financial reporting to ensure that due to and from balances
reconcile to supporting schedules and other DPS funds. We also recommend that
DPS assess the due from balances on an annual basis to ensure that they are
collectible.
The Mississippi Department of Public Safety concurs with the finding. See
additional information in Management’s Corrective Action Plan at page 311.
73
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
DIVISION OF MEDICAID
MATERIAL WEAKNESS
2021-007
Repeat Finding
Criteria
Condition
Strengthen Controls Over the Preparation and Review of the Schedule of
Expenditures of Federal Awards.
Yes; 2020-011; Material Weakness.
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when control activities exist. This includes a review performed to verify
the accuracy and completeness of financial information reported.
The Mississippi Agency Accounting Policies and Procedures (MAAPP) manual
Section 27.30.60 states, “The Federal Grant Activity schedule supports amounts
reported on the GAAP Packet for federal grant revenues, receivables, deferred
revenues and expenditures. The schedule is also used for preparing the Single Audit
Report required by the Single Audit Act...and the State’s audit requirements. The
amounts on this schedule should be reconciled by the agency with amounts reported
on federal financial reports.”
During the audit of the Mississippi Division of Medicaid for fiscal year ended June
30, 2021, we became aware of ineffective processes and/or procedures relating to
internal controls over financial reporting and the Schedule of Expenditures of
Federal Awards. In the aggregate, these instances resulted in a material weakness
in the agency’s overall control environment. The following exceptions were noted:
e One instance in which the “Grant Period End Date” per the Schedule of
Expenditures of Federal Awards did not agree with the “Grant End Date”
per the Grant Award. Incorrect dates could lead to monies being expended
past the period of performance of the grant.
e Two instances in which the amount listed in the grant award section of the
Schedule of Expenditures of Federal Awards did not agree with the Grant
Award.
e Three instances in which expenditures per the Schedule of Expenditures
of Federal Awards did not agree to the Mississippi Accountability System
for Government Information and Collaboration (MAGIC), resulting in
adjustments of $23,849,744 to the Schedule of Expenditures of Federal
Awards.
e Three instances in which federal expenditures were recorded as state
expenditures in Mississippi Accountability System for Government
Information and Collaboration (MAGIC) and were not included on the
15
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART - 2 Financial Statement Findings (continued)
Cause
Effect
Recommendation
Views of Responsible
Officials
Schedule of Expenditures of Federal Awards, resulting in adjustments of
$15,684,719.
e One instance in which the State’s portion of an accrual was not recorded
in Mississippi Accountability System for Government Information and
Collaboration (MAGIC), resulting in adjustments of $29,235,528.
e Agency does not perform a reconciliation of the Schedule of Expenditures
of Federal Awards to MAGIC.
The lack of adequate controls over the Schedule of Expenditures of Federal
Awards and the Claims Payable calculation resulted in the following:
Accounts Receivable was understated by $42,129,340;
e Subsidies Loans and Grants was understated by $42,129,340;
e Due from Federal Government was overstated by $10,545,495;
e Unearned Federal Revenue was overstated by $5,881,659; and
e Federal Revenue was overstated by $4,663,836.
The Mississippi Division of Medicaid (“Medicaid”) did not possess or enforce
proper internal control structures. Additionally, Agency did not properly review
and reconcile grant schedule information and did not perform review over crucial
aspects of financial reporting.
Without proper internal control structures over financial reporting, erroneous
financial statements and corresponding schedules could be compiled, resulting in a
misrepresentation of the financial standing of the Mississippi Division of Medicaid.
Failure to properly ensure the CFDA numbers and amounts are correct on the
Federal Grant Activity Schedule could result in reporting errors on the State’s
Single Audit Report.
We recommend the Mississippi Division of Medicaid strengthen controls over the
preparation and review of the Schedule of Expenditures of Federal Awards and
Claims Payable calculation to ensure all grant award information and amounts
reported are accurate and correct.
The Mississippi Division of Medicaid concurs with the finding. See additional
information in Management’s Corrective Action Plan at page 321.
76
Schedule of Findings and Questioned Costs
Part 3 — Federal Award Findings and Questioned
Costs
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Introduction
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
This part of the Schedule of Findings and Questioned Costs presents audit findings required to be reported by
OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2
CFR 200, Section 5.16
Findings are grouped by federal funding agency and then organized by state agency. Findings within the state
agency are listed in order by type of compliance requirement as listed in Appendix XI to the OMB Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200.
Each finding has one of the following designations:
Material Weakness — A material weakness in internal control over compliance is a deficiency,
or combination of deficiencies, in internal control over compliance such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a
federal program will not be prevented, or detected and corrected on a timely basis.
Significant Deficiency — A significant deficiency in internal control over compliance is a
deficiency, or a combination of deficiencies, in internal control over compliance with a type of
compliance requirement of a federal program that is less severe than a material weakness in
internal control over compliance, yet important enough to merit attention by those charged with
governance.
Material Noncompliance — Conditions representing noncompliance with the provisions of
laws, regulations, contracts or grant agreements, that in the auditor’s judgment have a direct
and material effect on a major federal program.
Immaterial Noncompliance — Conditions representing noncompliance with the provisions of
laws, regulations, contracts, or grant agreements that do not have a direct and material effect
on a major federal program.
77
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Finding Number
U.S. DEPARTMENT OF AGRICULTURE
Finding and Recommendation
DEPARTMENT OF EDUCATION
ACTIVITIES ALLOWED/ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021-034
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Child and Adult Care Food Program (CACFP).
10.558 Child and Adult Care Food Program
All Current Active Grants
N/A
$126,191
Code of Federal Regulations (7 CFR 226.15(e)) states, each institution shall
establish procedures to collect and maintain all program records required under
this part, as well as any records required by the State agency. Failure to maintain
such records shall be grounds for the denial of reimbursement for meals served
during the period covered by the records in question and for the denial of
reimbursement for costs associated with such records. At a minimum, the
following records shall be collected and maintained:
Documentation of the enrollment of each participant at centers and child
at day care homes. Such documentation of enrollment must be updated
annually, signed by a parent or legal guardian, and include information on
each child's normal days and hours of care and the meals normally
received while in care.
Daily records indicating the number of participants in attendance and the
daily meal counts, by type (breakfast, lunch, supper, and snacks), served
to family day care home participants, or the time of service meal counts,
by type (breakfast, lunch, supper, and snacks), served to center
participants.
Copies of invoices, receipts, or other records required by the State agency
financial management instruction to document: administrative costs
claimed by the institution; operating costs claimed by the institution except
sponsoring organizations of day care homes; and income to the program.
79
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states, “Organizations that
participate in the CACFP are required to maintain enrollment information for each
participant attending the center. The enrollment form must be updated
ANNUALLY and when required information has changed. Failure to maintain a
current enrollment form on each participant will result in the disallowance of meals
and repayment of Program funds. ... Each enrollment form must contain the
following: Participant’s Name, Date of Birth, Home Address, Medical
Information, Name and phone number of a person to be contacted in case of
emergency, Signature of Parent/Guardian, Participant’s Signature (or that of
another responsible adult)-Adult Day Care, Date Signed, Enrollment and
Withdrawal Dates, Meals Needed, Days and Hours of Care.”
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states, “Participants eligible
for free or reduced priced meals enrolling after July 1, must have meal applications
completed before the end of the month. The category of each participant, as stated
on the meal application, is recorded on the Master Roster. Failure to have a
complete meal application on file for each enrolled participant will result in the
disallowance of meals and repayment of Program funds. ...It is the responsibility
of the center staff to review and categorize the application as free, reduced, or
denied/paid. The staff must sign and date the application in the “official use only”
section.”
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states, “The United States
Department of Agriculture (USDA) issues CACFP reimbursement for
organizations based on three categories: free, reduced price and paid. To qualify
for the free or reduced-price categories, a family must meet the income level and
household size specified on the Income Eligibility Guidelines.”
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states, “The Master Roster is
used to give a summary of categories of eligibility for participants enrolled in the
center. This information comes from the meal application. The category totals on
the Master Roster are used to complete the monthly claim.
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program requires the eligibility
category on the Master Roster to be marked for each participant.
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states, “Attendance records
verify that participants claimed were actually present. An individual record of each
participant’s attendance (days present and absent) must be recorded each day.
...Failure to complete and document attendance will result in the disallowance of
meals and the repayment of Program Funds. Claiming meals more than
80
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Condition
documented in attendance will result in the designation of your organization as
seriously deficient.”
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states, “The Daily Record of
Meal Count must be recorded at the end of each meal service and must accurately
reflect actual meals served.
The Mississippi Department of Education CACFP: Participant Guide states,
“Meal count and attendance records must indicate that meal count totals are never
HIGHER than attendance totals.”
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states the organization is to
file invoices and receipts in a monthly folder after each CACFP approved
purchase. In addition, the cost worksheet should be completed after each purchase
or payment for CACFP.
Mississippi Department of Education Office of Child Nutrition: Recordkeeping
Manual for the Child and Adult Care Food Program states “Program operators are
required to track an organization’s spending and provide a Balance on Hand of
CACFP funds independently of other center funds. The State Agency highly
recommends opening a separate Checking Account for the tracking of CACFP
funds. ... No payments may be made for expenses not directly related to operation
of the CACFP. Any payments of this nature will be disallowed, and the
organization will be required to repay all such expenditures.”
Mississippi Department of Education Office of Child Nutrition Recordkeeping
Manual for the Child and Adult Care Food Program (CACFP) states,
“CACFP/SFSP Sponsor/Institution agrees to ensure all goods and services are
properly procured and maintain all records relating to the purchase of goods and
services and the procurement process. All Program records and documentation will
be maintained for three years plus the current year.”
During testwork performed for Activities Allowed and Allowable Costs for
CACFP grants for the 2020-2021 year, the auditor noted the following exceptions:
e 402 instances in which the 2020 - 2021 enrollment form did not contain
all the required elements or was not provided, resulting in questioned
costs of $66,593.
e 93 instances in which documentation for the Free/Reduced Meal
Application was not provided or was not completed correctly, resulting
in $22,045 of questioned costs.
e Three instances in which weekly meal count forms for the month did not
include all participants listed on the Master Roster for a Headstart
Program for a sponsored site, resulting in $245 of questioned costs.
e 31 instances in which the meal category on the Free/Reduced Lunch
Application was not recorded correctly on the Master Roster, resulting in
$3,500 of questioned costs.
81
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
e 35 instances in which no supporting documentation was provided for
expenses on the sponsors’ monthly cost worksheets, resulting in
questioned costs of $33,808.
e Auditor noted several instances in which the organization either did not
maintain a clear audit trail or did not maintain clear comprehensive
documentation, including:
o Mileage reimbursement forms did not contain site names or
addresses on the itinerary listed, therefore, auditor could not
determine if reimbursement was correct.
A sponsor organization’s system of accounting for the general
ledger only includes the aggregate total paid to the providers each
period, therefore, auditor was unable to determine amounts paid
to individual providers.
Payroll records did not have a clear record of which federal
program the employee compensation should be allocated. Auditor
was unable to trace employee payroll records to the CACFP
staffing patterns.
Payments per the cost worksheet could not be traced to the bank
statements. Due to lack of clear audit trail, items listed on the cost
worksheet could not be tracked into the aggregate vendor
payments per the bank statement.
CACFP testwork was not performed using a statistically valid sampling
approach; therefore, projection of questioned costs is not considered
appropriate.
MDE did not monitor subrecipients properly and ensure that subrecipients are
maintaining required supporting documentation as required by written policies and
procedures.
Failure to not properly monitor subrecipients and ensure required supporting
documentation is maintained could result in questioned costs and loss of funding.
We recommend the Mississippi Department of Education strengthen controls to
ensure compliance with allowable costs requirements of the Child and Adult Care
Food Program (CACFP).
No.
No.
Management at the Mississippi Department of Education does not concur with
this finding. See additional comments in the Corrective Action Plan on page 251
of this audit report; and the Auditor’s Response to the Corrective Action Plan at
page 83 and 259.
82
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Education
(MDE) Management
Department of Education — Activities Allowed/Allowable Costs - Material Weakness/Material
Noncompliance
2021-034 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Child and Adult Care Food Program (CACFP).
Mississippi Department of Education (MDE) asserts in their disagreement with the finding that they have
a “robust system of monitoring” and that they could not verify the accuracy of the finding due to “not being
included in the reviews of the recipients.
OSA reviewed a significantly lower percentage of CACFP subrecipients than MDE alleges they reviewed
in their response (42%) and OSA found enough noncompliance to warrant a material noncompliance
finding with $126,191 in questioned costs, which should be noted is more than triple ($37,408) the amount
MDE stated they recovered from similar organizations.
Additionally, the assertion that the accuracy could not be verified due to not being “included in the reviews
of subrecipients” is misleading, and implies that MDE was not made aware of the particulars of the
questioned costs. MDE was provided with a list of all the CACFP subrecipients that are noted in the finding
and a list of the specific questioned costs. MDE stated it would take months to review those expenditures
at the same level of detail that OSA personnel were able to complete in less than six weeks.
In conclusion, the sheer number of errors in the subreicipient monitoring process that led to the questioned
allowable costs does not support MDE’s statement that their internal controls and subrecipient monitoring
system is either robust or adequate.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
DEPARTMENT OF HUMAN SERVICES
REPORTING
Material Weakness
Material Noncompliance
2021-011
ALN Number(s)
Federal Award
Pass-Through
Questioned Costs
Criteria
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Strengthen Controls to Ensure Compliance with Reporting Requirements for
Pandemic EBT Food Benefits.
10.542 Pandemic EBT Food Benefits
12352834-DP20 (2020)
N/A
N/A
The Code of Federal Regulations (2 cfr 200.302(b)) states in part that the financial
management system of each non-Federal entity must provide for the
“identification, in its accounts, of all Federal awards received and expended and
the Federal programs under which they were received. Federal program and
Federal award identification must include, as applicable, the Assistance Listings
title and number, Federal award identification number and year, name of the
Federal agency, and name of the pass-through entity, if any...”
When performing testwork related to Pandemic EBT (PEBT) Reporting as of June
30, 2021, the auditor noted that the Mississippi Department of Human Services
(MDHS) did not separately identify the PEBT grant award(s) on its Federal Grant
Activity Schedule, nor within Mississippi’s Accountability System for
Government Information and Collaboration (MAGIC).
MDHS staff combined regular EBT benefits with PEBT benefits for grant
reporting.
Failure to report any applicable awards correctly resulted in MDHS being in
noncompliance with federal requirements.
We recommend the Mississippi Department of Human Services strengthen
controls to ensure compliance with reporting requirements for Pandemic EBT
Food Benefits.
No.
No.
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Officials
Management at the Mississippi Department of Human Services concurs
with this finding. See additional comments in the Corrective Action Plan on
page 303 of this audit report.
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-013
CFDA Number
Federal Award No.
Pass-Through
Questioned Costs
Criteria
Strengthen Controls over On-Site Monitoring for the Supplemental Nutrition
Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF),
Child Care and Development Block Grant (CCDF), Low Income Home Energy
Assistance Program (LIHEAP), and Social Services Block Grant (SSBG)
Programs.
10.551 Supplemental Nutrition Assistance Program
93.558 Temporary Assistance for Needy Families State Programs
93.667 Social Services Block Grant
93.575 Child Care and Development Block Grant
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund
93.568 Low Income Home Energy Assistance Program
SNAP -— Letter of Credit 2001MSCCDF (2020)
G1901MSTAMNF (2019) G2001MSSOSR (2020)
G2001MSTANF (2020) G20B1MSLIEA (2020)
N/A
N/A
The terms and conditions of the grant agreements between the Mississippi
Department of Human Services (MDHS) and the U.S. Department of Health and
Human Services require MDHS to administer grants in compliance with the Code
of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr
Part 200.331) designates MDHS as a pass through entity to properly identify
subgrant requirements to subrecipients, evaluate the risk of noncompliance for
each subrecipient, and monitor the activities of subrecipients as necessary to ensure
that subgrants are used for authorized purposes, complies with the terms and
conditions of the subgrants and achieves performance goals.
The auditor evaluated MDHS’s compliance with subrecipient monitoring
requirements based on written policies and procedures designed by MDHS’s
Division of Program Integrity — Division of Monitoring (DM) to satisfy during-
the-award monitoring requirements. DM _ procedures require: an on-site
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
monitoring review of each subrecipient contract at least once during the subgrant
period. Monitoring tools/checklists are used during each on-site monitoring review
to provide guidance and to document a review was performed. The on-site
monitoring workpapers are reviewed and approved by DM supervisory personnel
prior to issuance of a written report, the Initial Report of Findings &
Recommendations, which is used for communicating finding(s) and/or questioned
costs to subrecipients. The written report should be issued within 60 days from the
date of the exit conference, which is normally held on the last day of the on-site
review. Additionally, if the initial report identifies any administrative findings or
questioned costs, a response to the findings is required to be submitted by the
subrecipient to DM within thirty (30) working days from the date the report was
issued.
The Code of Federal Regulations (2 cfr 200.328(a)) states that the non-Federal
entity is responsible for oversight of the operations of the Federal award supported
activities. The non-Federal entity must monitor its activities under Federal awards
to assure compliance with applicable Federal requirements and performance
expectations are being achieved. Monitoring by the non-Federal entity must cover
each program, function or activity. See also § 200.331 Requirements for pass-
through entities.
The Code of Federal Regulations (2 cfr 200.328(b)(2)), states the non-Federal
entity must submit performance reports using OMB-approved government-wide
standard information collections when providing performance information. As
appropriate in accordance with above mentioned information collections, these
reports will contain, for each Federal award, brief information on the following
unless other collections are approved by OMB:
(i) A comparison of actual accomplishments to the objectives of the Federal
award established for the period. Where the accomplishments of the
Federal award can be quantified, a computation of the cost (for example,
related to units of accomplishment) may be required if that information
will be useful. Where performance trend data and analysis would be
informative to the Federal awarding agency program, the Federal
awarding agency should include this as a performance reporting
requirement.
(ii) The reasons why established goals were not met, if appropriate.
(111) Additional pertinent information including, when appropriate, analysis
and explanation of cost overruns or high unit costs.
The Code of Federal Regulations (2 CFR 200.332 (d)) States that the pass-through
entity “Monitor the activities of the subrecipient as necessary to ensure that the
subaward is used for authorized purposes, in compliance with Federal statutes,
regulations, and the terms and conditions of the subaward; and that subaward
performance goals are achieved...”
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Condition
Additionally, the Code of Federal Regulations (2 cfr 200.62), states that a non-
Federal entity must have internal control over compliance designed to provide
reasonable assurance that transactions are executed in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award that could
have a direct and material effect on a Federal program; and any other Federal
statutes and regulations that are identified in the Compliance Supplement.
Furthermore, the /nternal Control — Integrated Framework published by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
specifies that a satisfactory control environment is only effective when there are
adequate control activities in place. Effective control activities dictate that: the
agency perform appropriate; multi-level reviews over the monitoring process; the
agency and subgrants of the agency maintain adequate documentation (i.e.
Identification Cards, Birth Certificates, Driver’s Licenses, etc.) in order to verify
eligibility information submitted by clients of the Federal Programs; the agency
perform tests over the eligibility of clients of the Federal program in order to ensure
the subrecipient is in compliance with Federal statutes, regulations, and the terms
and conditions of the subaward; the agency ensures timely communication from
the subgrantees and timely resolution of findings; and the Division of Monitoring
act separately from the programmatic funding divisions in order to prevent; detect;
and deter fraud, waste, and abuse or the misuse of federal funds.
During testwork performed on subrecipient on-site monitoring for 117 subgrant
contracts during state fiscal year 2020, auditor noted the following exceptions:
e Two instances, or 2 percent, in which the Division of Monitoring did
not perform monitoring of subgrants.
e Five instances, or 5 percent, in which the Supervisor's Checklist was
not included for Subrecipient on the FY 2020 Monitoring Reviews
Smartsheet; therefore, auditor could not verify Supervisory Review of
the Monitoring process.
e 10 instances, or 9 percent, in which the Programmatic Tool was not
included for Subrecipient on FY 2020 Monitoring Reviews
Smartsheet, and could not be provided by the Division of Monitoring.
e Four instances, or 3 percent, in which the Initial Report was not issued
within 60 working days of the exit conference.
e 28 instances, or 24 percent, in which auditor could not verify
Eligibility was tested by either the Division of Monitoring or the
Programmatic Division, or the Monitoring Smartsheet did not contain
enough documentation to ensure eligibility was tested appropriately.
e One instance, or 1 percent, in which auditor could not verify a
clearance or resolution of monitoring findings.
e One instance, or | percent, in which the Division of Monitoring did
not receive a response from a subrecipient in regards to the Initial
Finding Letter.
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Material Weakness
Additionally, auditor noted that the Division of Monitoring performs monitoring
of subrecipients’ programmatic performance and spending based on programmatic
tools provided by MDHS’ individual programmatic divisions and not on
knowledge of the federal program and its corresponding rules and regulations.
Staff were either unaware or did not follow identified policies and procedures for
monitoring requirement.
MDHS programmatic funding divisions rely upon DM monitoring procedures to
verify compliance with program regulations and to identify potential problem areas
needing corrective action. Failure to properly monitor subrecipients in a timely
manner could allow noncompliance with federal regulations to occur and go
undetected, potentially resulting in questioned costs.
We recommend the Mississippi Department of Human Services’ Division of
Program Integrity — Division of Monitoring (DM) strengthen controls over
subrecipient monitoring. We also recommend the agency ensure subgrants are
monitored timely and that the “Report of Findings & Recommendations” prepared
as a result of the on-site monitoring be issued in a timely manner to enable
immediate corrective action procedures to be initiated. Additionally, we
recommend that the agency maintain all supporting monitoring tools, reports, and
correspondence in the monitoring file. We further recommend the agency monitor
eligibility for all subrecipients and ensure subrecipients maintain adequate
documentation that supports the eligibility determination of their clients.
Yes — 2020-030; Yes — 2019-042 in 2019; 2018-046 in 2018; 2017-037 in 2017;
2016-027 in 2016; 2015-005 in 2015; 2014-017 in 2014; 2013-015 in 2013.
Yes.
Management at the Mississippi Department of Human Services concurs
with this finding. See additional comments in the Corrective Action Plan on
page 304 of this audit report.
Material Noncompliance
2021-014
CFDA Number
Strengthen Controls Over Subrecipient Monitoring to Ensure Compliance with
Uniform Guidance Auditing Requirements.
10.551 Supplemental Nutrition Assistance Program
93.558 Temporary Assistance for Needy Families State Programs
93.575 Child Care and Development Block Grant
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Federal Award No.
Pass-Through
Questioned Costs
Criteria
93.667 Social Services Block Grant
93.568 Low Income Home Energy Assistance Program
SNAP — Letter of Credit
TANF — G1901MSTANF, G2001MSTANF
CCDF — G1901MSCCDF, G2001MSCCDF
SSBG — G2001MSSOSR
LIHEAP — G20B1MSLIEA, G2001MSLIEA
N/A
N/A
The Internal Control - Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) specifies that a
satisfactory control environment is only effective when there are adequate control
activities in place. Adequate controls would allow for a tracking system that
includes all sub-recipients receiving federal funds from the agency as well as the
maintenance of OMB monitoring files.
The Office of Management and Budget’s (OMB) Uniform Guidance states the
pass-through entity is responsible for (1) ensuring that subrecipients expending
$750,000 or more in Federal awards during their fiscal year have met the audit
requirements of Uniform Guidance and that the required audits are completed
within nine months of the end of the subrecipient’s audit period; (2) issuing a
management decision on findings within 6 months after receipt of the
subrecipient’s audit report; and (3) ensuring that the subrecipient takes timely
and appropriate corrective action on all audit findings. In cases of continued
inability or unwillingness of a subrecipient to have the required audits, the
pass-through entity shall take appropriate action using sanctions.
Additionally, the Code of Federal Regulations (45 cfr 200.62), states that a non-
Federal entity must have internal control over compliance designed to provide
reasonable assurance that;
(a) Transactions are properly recorded and accounted for, in order to:
(1) Permit the preparation of reliable financial statements and Federal
reports;
(2) Maintain accountability over assets; and
(3) Demonstrate compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award;
(b) Transactions are executed in compliance with:
(1) Federal statutes, regulations, and the terms and conditions of the
Federal award that could have a direct and material effect on a Federal
program; and
(2) Any other Federal statutes and regulations that are identified in the
Compliance Supplement; and
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(c) Funds, property, and other assets are safeguarded against loss from
unauthorized use or disposition.
The Code of Federal Regulations (2 cfr §200.331(f)) states all pass-through entities
(PTE’s) must verify that every subrecipient is audited as required by Subpart F -
Audit Requirements of this part when it is expected that the subrecipient's Federal
awards expended during the respective fiscal year equaled or exceeded the
threshold set forth in § 200.501 Audit requirements.
The Code of Federal Regulations (2 cfr §200.332) states that all pass-through
entities must:
(d) Monitor the activities of the subrecipient as necessary to ensure that the
subgrant is used for authorized purposes, in compliance with Federal statutes,
regulations, and the terms and conditions of the subgrant; and that subgrant
performance goals are achieved. Pass-through entity monitoring of the
subrecipient must include:
(1) Reviewing financial and performance reports required by the pass
through entity.
(2) Following-up and ensuring that the subrecipient takes timely and
appropriate action on all deficiencies pertaining to the Federal award
provided to the subrecipient from the pass-through entity detected through
audits, on-site reviews, and written confirmation from the subrecipient,
highlighting the status of actions planned or taken to address Single Audit
findings related to the particular subgrant.
The Code of Federal Regulations (2 cfr § 200.512(a)(1)) states the audit must be
completed and the data collection form described in paragraph (b) of this section
and reporting package described in paragraph (c) of this section must be submitted
within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine
months after the end of the audit period. If the due date falls on a Saturday, Sunday,
or Federal holiday, the reporting package is due the next business day.
Furthermore, MDHS’ Policy regarding the Responsibilities of the Monitoring Unit
Related to Uniform Guidance Audit Requirements Audits includes:
(1) Providing an Initial Notice Letter to subrecipients to notify them of the audit
requirements under the OMB Uniform Guidance Audit Requirements and
providing the Subrecipient Audit Information Form (SAIF) to document that an
audit is not required for subrecipients that expend less than $750,000.
(2) Issuing a Reminder Letter to subrecipients that have not submitted either an audit
report or SAIF form to document that an audit was not required.
(3) Issuing a Demand Letter to subrecipients that fail to submit an audit report or SAIF
form to document that an audit was not required.
(4) Identifying any audit findings contained in the audit reports and notifying the
responsible MDHS Funding Division so that the audit findings can be resolved
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
Condition
Cause
Effect
Recommendation
within the six-month deadline imposed under OMB Uniform Guidance Audit
Requirements.
(5) Maintaining an audit file for each MDHS subrecipient which includes an archive
copy of the audit report or Subrecipient Audit Information Form, the Uniform
Guide for Initial Review of Audit Reports, copies of the transmittal memorandum
sent to each MDHS Funding Division, copies of any reminder letters sent to the
subrecipient, and the Audit Finding and Questioned Costs Tracking Record and a
copy of the clearance letter issued by the MDHS Funding Division for those
subrecipients with audit findings.
Finally, the MDHS Subgrant/Agreement Manual states that all MDHS
subrecipients are required to complete the MDHS Subrecipient Audit Information
Form (MDHS-DPI-002). This form must be submitted to the Division of Program
Integrity — Division of Monitoring no later than ninety (90) calendar days after the
end of the subrecipient’s fiscal year. This form is necessary to certify the sources
and amounts of all Federal awards received and expended by the subrecipient.
During the audit of the Mississippi Department of Human Services (MDHS), the
auditors reviewed the Division of Monitoring (DM) audit files and Single Audit
Tracking Document for MDHS Subgrantees for state fiscal year 2019. During the
review, the following weaknesses were noted:
e One instance in which the Uniform Guide for the Initial Report of
Uniform Guidance Audit Reports was not included on the FY 2019
Single Audit Tracking Smartsheet; therefore, auditor could not verify
the DM reviewed and approved the submitted Subgrantee audit report.
e 33 instances in which Auditor could not verify if reminder letters were
sent to the Subrecipient due to these letters not being included on the
FY 2019 Single Audit Tracking Smartsheet or reminder letters were
sent untimely.
e Three instances in which the Office of Monitoring did not receive the
Subgrantee SAIF form within 90 days of the subrecipient’s fiscal year
end. Average submission was 123 working days late.
e Eight instances in which the FY 2019 Single Audit Tracking
Smartsheet did not contain a SAIF form or audit report for the
Subgrantee; therefore, auditor could not verify compliance with the
monitoring process.
Staff were either unaware or did not follow identified policies and procedures for
subrecipient monitoring related to Uniform Guidance.
Failure to properly monitor subrecipients could allow noncompliance with federal
regulations to occur and go undetected, potentially resulting in fraud, waste, and
abuse within the agency.
We recommend the Mississippi Department of Human Services’ Division of
Program Integrity — Division of Monitoring (DM) strengthen controls over
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Agriculture (continued)
subrecipient monitoring for Uniform Guidance audits to ensure recipients
expending $750,000 or more in Federal funds during their fiscal year are
appropriately monitored and an Uniform Guidance audit is obtained and continue
to follow-up in a timely manner to obtain an Uniform Guidance audit or
Subgrantee Audit Information Form after the demand letter is issued.
Repeat Finding Yes — 2020-031; Yes — 2019-043; 2018-047 in 2018; 2017-038 in 2017; 2016-028
in 2016; 2015-009 in 2015; 2014-016 in 2014.
Statistically Valid Yes.
View of Responsible
Officials Management at the Mississippi Department of Human Services concurs with
this finding. See additional comments in the Corrective Action Plan on page
306 of this audit report.
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. DEPARTMENT OF EDUCATION
Finding Number Finding and Recommendation
DEPARTMENT OF EDUCATION
ACTIVITIES ALLOWED AND ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021-044 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Coronavirus (COVID) Relief Funds (CRF) and Elementary and Secondary
School Emergency Relief Fund (ESSER).
ALN Number 84.425D Education Stabilization Fund (ESSER)
21.019 Coronavirus Relief Fund (CRF)
Federal Award No. All Current Active Grants
Pass-through Entity N/A
Questioned Costs N/A
Background During the Fiscal Year 2020 Legislative Session of the Mississippi Legislature,
legislators appropriated over $1.25 billion dollars of Coronavirus Aid, Relief, and
Economic Security Act (CARES) funds from the Coronavirus Relief Fund grant
(ALN 21.019). As part of those appropriated funds, the Mississippi Department
of Education was charged with assisting schools in purchasing laptop computers
or tablets so that K-12 students could participate in distance learning efforts. The
MS Legislature required schools to “match” any CRF funds utilized with ESSER
funds at a 20/80 percent match (20 percent ESSER). Since these funds could not
be segregated from the total purchase price of the computers, both CRF and
ESSER share finding 2021-044.
Criteria Per Section 31-7-9, Mississippi Code of 1972, Annotated, “Procurement
regulations shall be promulgated by the Office of Purchasing, Travel, and Fleet
Management, with approval of the Public Procurement Review Board.”
Per the Mississippi Procurement Manual, Section 1.103, “All procurement
regulations require all parties involved in the negotiation, performance or
administration of Mississippi contracts to act in good faith.”
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Condition
Per the Mississippi Procurement Manual, Section 1.104 (2), “The procurement
regulations shall apply to every expenditure of public funds irrespective of their
source, when such expenditures are made in compliance with or are designated by
Section 31-7-1, et seq. Mississippi Code of 1972, Annotated. However, in the event
of a conflict, the guidelines of the grant, gift, or self-generated funds shall prevail;
and in any case, violation of these regulations shall carry such penalties as may be
applicable under state laws.”
Per the Mississippi Procurement Manual, Section 3.110, “Notwithstanding any
other provisions of this regulation, the Chief Procurement Officer, the head of a
purchasing agency, or a designee of either officer may make or authorize others to
make emergency procurements under emergency conditions ... provided, that such
emergency procurements shall be made with such competition as is practicable
under the circumstances.”
Mississippi Senate Bill 3044, adopted during the 2020 legislative session,
otherwise known as the “Equity in Distance Learning Act (the Act)”, provided
funding for devices and other technology for the students, teachers, and
administrators in the schools of Mississippi. The Act authorized MDE to prepare
an Express Product Listing (EPL) for computer equipment. The Act further
authorized MDE to utilize emergency procurement procedures to solicit bids for
the EPL. MDE signed contracts with Apple, Inc. to provide Apple devices to
schools without any competitive bidding process. However, MDE opted to use a
competitive bidding process with bid solicitations for other computer and
technology needs.
During our audit, auditors noted that MDE staff conducted regular meetings with
individuals from the winning bidder of the authorized Express Product Listing
prior to publishing the official Request For Quote (RFQ) to vendors. Additionally,
MDE’s Chief Information Officer forwarded a draft of the “Prime Contractor
Requirements” or specifications to a member of the winning bidder 20 days before
the RFQ was officially released. The winning bidder made modifications to the
specifications before they were submitted in the RFQ.
MDE stated that all vendors that were solicited for bids were provided the
specifications in advance; however, only the winning bidder was given the
opportunity to make suggestions to edits to the specifications. According to
documentation provided to auditors, the following serves as a timeline of
communication:
July 2, 2020 — Email to future winning bidder with listed specifications as “draft”.
July 9, 2020 — Email from future winning bidder to MDE with changes in
specifications marked in red.
July 21, 2020 — Microsoft “Teams” chat with second bidder where specifications
(with some of future winning bidder edits) are provided.
July 22, 2020 — Email to third bidder where specifications (with some of future
winning bidder edits) are provided.
July 29, 2020 — Official RFQ was provided to vendors.
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Cause
Effect
July 31, 2020 — Deadline for vendor questions.
August 1, 2020 — Deadline for questions answered.
August 3, 2020 — Deadline for submissions of responses to RFQ.
August 3, 2020 — Evaluation of Responses.
August 4, 2020 — Vendor interviews.
August 4, 2020 — Review of submissions by MDE panel.
August 5, 2020 — Contract negotiations.
August 6, 2020 — Board Approval.
August 18, 2020 — Contract Awarded (no later than date).
It should be noted that four vendors submitted proposals and were evaluated.
However, MDE did not present documentation that showed the fourth vendor was
provided specifications in advance. The memorandum on August 4, 2020 that
describes the selection process in broad terms only references three vendors, but
does show a scored rubric for four vendors, illustrating inconsistencies in the
procurement process.
The winning bidder was provided the ability to edit specifications and was
provided the specifications approximately 20 days in advance while the other
vendors were only given approximately two weeks to prepare bids. The winning
bidder suggested extensive “prime contractor requirements” for the specifications,
including information suggesting how many square feet distribution centers
needed to be sized, financing options, experience with specific programs, etc.
Auditors could not see evidence that these specific requirements were added to the
specifications provided to other vendors; however, the winning bidder was
provided an unfair advantage in suggesting that these requirements would aid in
the deployment process. Additionally, similar requirements and experience factors
were noted by MDE and the procurement reviewers during the proposal analysis
phase.
When comparing prices on the RFQ, the winning bidder received 35 points for the
category of “Devices, including price considerations.” However, when price was
compared, the winning bidder was not the lowest bidder, nor the second lowest
bidder. The next highest score in the category was “25” but the prices of the
competitor were significantly lower. MDE failed to provide any information on
why the points were assigned and calculated other than an overall memorandum
of the scores and process. Based on information provided, it does not appear that
the procurement process was designed to promote fair and open competition; nor
does it appear that all parties negotiated the agreements in good faith.
MDE failed to act in good faith in obtaining requisitions of equipment related to
CRF and ESSER funds.
Failure to act in good faith during procurement negotiations can open MDE to civil
litigation claims. Additionally, implied preference to vendors could result in
public distrust in the procurement process. Lastly, implied preference could result
in fraud, waste, or abuse during the procurement process.
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PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
We recommend the Mississippi Department of Education strengthen controls to
ensure compliance with allowable costs requirements of the Coronavirus (COVID)
Relief Funds (CRF) and Elementary and Secondary School Emergency Relief
Fund (ESSER).
No.
No.
Management at the Mississippi Department of Education does not concur with this
finding. See additional comments in the Corrective Action Plan on page 249 of
this audit report; and the Auditor’s Response to the Corrective Action Plan on page
107 and 261.
REPORTING
Material Weakness
Material Noncompliance
2021-035
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
Strengthen Controls to Ensure Compliance with Federal Funding Accountability
and Transparency Act (FFATA) requirements
84.010 Title I — Grants to Local Education Agencies
84.425D Education Stabilization Fund (ESSER)
All Current Active Grants
N/A
N/A
The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a
subaward must be reported in FSRS by the last day of the month following the
obligation date, which is defined as the date the subaward is signed.
The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth
the reporting requirements of the Transparency Act that related to subawards under
grants. Direct recipients of grants who make first-tier subawards equal to or
exceeding $30,000 are required to report each subaward obligating action equal to
$30,000 or more in Federal funds.
During testwork performed for the Federal Funding Accountability and
Transparency Act (FFATA) reporting fiscal year 2021, the auditor noted the
following exceptions:
98
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
e Fifteen instances out of 15 reports tested for Title I, in which there was
no supporting documentation for the date the report was submitted to
the Federal Funding Accountability and Transparency Act Subaward
Reporting System (FSRS). Due to the lack of supporting documentation
for the date of report submission, the auditor was not able to determine
if the FSRS reports were reported timely, no later than the last day of
the month following the month in which the subaward/subaward
amendment obligation was made or the subcontract award/subcontract
modification was made.
Transactions | Subaward | Report Not | Subaward Subaward
Tested Not Timely Amount Missing Key
Reported Incorrect Elements
15 0 15 0 0
Dollar Subaward | Report Not | Subaward Subaward
Amount Not Timely Amount Missing Key
Tested For | Reported Incorrect Elements
Transactions
$21,747,051 | $0 $21,747,051 | $0 $0
e Fifteen (15) instances out of 15 reports tested for Elementary and
Secondary School Emergency Relief Fund IT (ESSER ID), in which the
report was not submitted within the required timeframe. Of the 15
reports tested, all had a subaward action date of 2/25/2021. Submission
date for these reports was 4/12/2021. Per the compliance supplement,
the FFATA reports are required to be submitted no later than the last
day of the following month in which the sub-grant is awarded. The
deadline for reports reviewed would be 3/31/21; therefore, all were 12
days late.
Transactions | Subaward | Report Not | Subaward Subaward
Not Timely Amount Missing
Reported Incorrect Key
Elements
0 15 0 0
Subaward | Report Not | Subaward Subaward
Amount Not Timely Amount Missing
For | Reported Incorrect Key
Transactions Elements
$137,165,965 | $0 $137,165,965 | $0 $0
e Mississippi Department of Education (MDE) has not established
internal control policies or procedures, nor is a supervisory review
performed of the subrecipient contract information that is reported to
verify the data is reported timely.
99
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
MDE personnel did not maintain documentation of the date of report submission
to FSRS.
Failure to maintain documentation that reports are submitted timely can undermine
transparency and accountability since the public will not know about these grants
awards in an appropriate manner.
We recommend the Mississippi Department of Education (MDE) strengthen
controls to ensure compliance with Federal Funding Accountability and
Transparency Act (FFATA) requirements.
No.
Yes.
Management at the Mississippi Department of Education does not concur with this
finding. See additional comments in the Corrective Action Plan on page 253 of
this audit report; and Auditor’s Response to the Corrective Action Plan on page
107 and 261.
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-036
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with On-Site Monitoring Requirements
for Title I.
84.010 Title I — Grants to Local Education Agencies
All Current Active Grants
N/A
N/A
The terms and conditions of the grant agreements between the
Mississippi Department of Education (MDE) and the U.S. Department of
Education require MDE to administer grants in compliance with the Code of
Federal Regulations (2 CFR Part 200 — Uniform Guidance). The Code of
Federal Regulations (2 CFR Part 200.332) designates MDE, as a pass
through entity, to properly identify subaward requirements to subrecipients,
evaluate the risk of noncompliance for each subrecipient, and monitor the
activities of subrecipients as necessary to ensure that subawards are used for
authorized purposes, complies with the terms and conditions of the subawards
and achieves performance goals.
100
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Condition
The Code of Federal Regulations (2 CFR 200.332(b)) states, all pass-through
entities must evaluate each subrecipient's risk of noncompliance with Federal
statutes, regulations, and the terms and conditions of the subaward for purposes of
determining the appropriate subrecipient monitoring described in paragraphs (d)
and (e) of this section, which may include consideration of such factors as: (1) The
subrecipient's prior experience with the same or similar subawards; (2) The results
of previous audits including whether or not the subrecipient receives a Single Audit
in accordance with Subpart F of this part, and the extent to which the same or
similar subaward has been audited as a major program; (3) Whether the
subrecipient has new personnel or new or substantially changed systems; and (4)
The extent and results of Federal awarding agency monitoring (e.g., if the
subrecipient also receives Federal awards directly from a Federal awarding
agency).
The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through
entities must monitor the activities of the subrecipient as necessary to ensure that
the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations, and the terms and conditions of the subaward; and that subaward
performance goals are achieved.
We evaluated MDE’s compliance with subrecipient monitoring requirements
based on written policies and procedures designed by MDE’s Office of Federal
Programs Division of Compliance (OFP-DC) to satisfy during-the-award
monitoring requirements. OFP-DC procedures require an on-site monitoring
review of each subgrantee contract based on risk assessment level of moderate or
high. A tracking mechanism is used to ensure all subgrantee contracts are properly
identified and monitored. OFP-DC written procedures requires the MDE
Executive Director of Federal Programs to send the monitoring report with
appropriate cover letter to the Local Educational Agency (LEA) notifying the
Superintendent, Federal Programs Director, and Business Manager, typically
within 45 days. OFP-DC written procedures require the LEA to prepare a
Corrective Action Plan (CAP) within 30 days of receipt of the monitoring report
and require OFP-DC to follow up with the CAP to ensure it is accomplished,
typically, within 12 months of the monitoring visit. Finally, the written procedures
state a potential condition of approval of the LEA’s annual funding application is
that the status of the monitoring report must be either Closed or Pending
Compliance with Approved Corrective Action Plan.
For the 2019 — 2020 monitoring cycle, the Mississippi Department of Education
(MDE) did not perform a risk assessment to evaluate each subrecipient's risk of
noncompliance with Federal statutes, regulations, and the terms and conditions of
the subaward. Instead, MDE performed on-site monitoring for all local educational
agencies (LEAs) that had not been monitored in the last three monitoring cycles.
During testwork performed on subrecipient monitoring, the auditor tested 37 of the
47 local education agencies (LEAs) that had on-site monitoring for the 2019-2020
monitoring cycle and noted the following:
101
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Material Weakness
e Seven instances (or 19 percent) in which the school district did not provide
MDE with a corrective action plan (CAP) within 30 days of the monitoring
report.
e One instance (or 3 percent) in which no documentation of a monitoring
instrument and follow-up communication was provided.
MDE did not follow federal regulations related to assessing the risk of each LEA
prior to performing on-site monitoring for the 2019-2020 monitoring cycle. In
addition, MDE did not follow policies and procedures related to ensuring the LEAs
submit their CAP within twelve months of the monitoring visits and the monitoring
instruments are properly maintained after the on-site visits are performed.
MDE programmatic funding divisions rely upon on-site monitoring procedures to
verify compliance with program regulations and to identify potential problem areas
needing corrective action. Failure to properly monitor subrecipients and ensure
closure of the monitoring visits in a timely manner could allow noncompliance
with federal regulations to occur and go undetected, potentially resulting in
questioned costs.
We recommend the Mississippi Department of Education strengthen controls to
ensure compliance with subrecipient monitoring requirements for Title I.
Yes, 2020-032.
Yes.
Management at the Mississippi Department of Education concurs with this finding.
See additional comments in the Corrective Action Plan on page 254 of this audit
report.
Material Noncompliance
2021-037
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring
Requirements for Special Education Cluster Programs.
84.027 Special Education — Grants to States (IDEA, Part B)
84.173 Special Education — Preschool Grants (IDEA, Preschool)
All Current Active Grants
N/A
N/A
102
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Criteria
The terms and conditions of the grant agreements between the Mississippi
Department of Education (MDE) and the U.S. Department of Education require
MDE to administer grants in compliance with the Code of Federal Regulations (2
CFR Part 200 — Uniform Guidance). The Code of Federal Regulations (2 CFR
Part 200.331) designates MDE, as a pass-through entity, to properly identify
subaward requirements to subrecipients, evaluate the risk of noncompliance for
each subrecipient, and monitor the activities of subrecipients as necessary to ensure
that subawards are used for authorized purposes, complies with the terms and
conditions of the subawards and achieves performance goals.
The Code of Federal Regulations (2 CFR 200.332(b)) states, all pass-through
entities must evaluate each subrecipient's risk of noncompliance with Federal
statutes, regulations, and the terms and conditions of the subaward for purposes of
determining the appropriate subrecipient monitoring described in paragraphs (d)
and (e) of this section, which may include consideration of such factors as: (1) The
subrecipient's prior experience with the same or similar subawards; (2) The results
of previous audits including whether or not the subrecipient receives a Single Audit
in accordance with Subpart F of this part, and the extent to which the same or
similar subaward has been audited as a major program; (3) Whether the
subrecipient has new personnel or new or substantially changed systems; and (4)
The extent and results of Federal awarding agency monitoring (e.g., if the
subrecipient also receives Federal awards directly from a Federal awarding
agency).
The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through
entities must monitor the activities of the subrecipient as necessary to ensure that
the subaward is used for authorized purposes, in compliance with Federal statutes,
regulations, and the terms and conditions of the subaward; and that subaward
performance goals are achieved.
MDE’s Office of Special Education Bureau of Monitoring and Technical
Assistance (OSE-BMTA) procedures require an on-site monitoring visit of each
subgrantee contract based on a four-year rotating cycle. Each Local Education
Agency (LEA) in Mississippi receives an on-site compliance monitoring visit at
least once every four years. The OSE-BMTA written procedures state each
monitoring visit will have a monitoring team leader who is responsible for
completing the monitoring report and sending the report to the Office of Special
Education (OSE) Bureau Director for approval. The monitoring instrument is
designed to include all areas of compliance to be monitored and consists of a
programmatic portion and a fiscal portion. The written procedures require the
monitoring report be provided to the LEA within 30 calendar days of the
monitoring visit. The written procedures further state that within 14 calendar days
from the receipt of the monitoring report, the LEA must submit a response to
OSE of any inconsistencies in the report along with documentation to support the
findings. OSE-BMTA written procedures require the LEA to prepare and submit
an Improvement Plan within 30 days of receipt of the monitoring report. The
written procedures further state that all noncompliance must be corrected as soon
103
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
as possible, but in no case more than 12 months from the date of the monitoring
report.
For the 2019 — 2020 monitoring cycle, the Mississippi Department of Education
(MDE) did not perform a risk assessment to evaluate each subrecipient's risk of
noncompliance with Federal statutes, regulations, and the terms and conditions of
the subaward. In addition, The Mississippi Department of Education (MDE) did
not properly monitor all Local Education Agencies (LEAs) on a four-year cycle.
Per MDE policy, roughly 35 LEAs should be monitored in the monitoring cycle
each year. During the last completed monitoring cycle (School Year 2019 — 2020),
no cyclical monitoring cycle was performed. Thus, the auditor was unable to
continue testing the cyclical monitoring and deemed controls ineffective. The
agency has not fully implemented the corrective action plan from the prior year
finding over subrecipient monitoring.
MDE did not follow federal regulations related to assessing the risk of each LEA.
In addition, MDE did not follow written policies related to their cyclical
monitoring cycle.
MDE programmatic funding divisions rely upon on-site monitoring procedures to
verify compliance with program regulations and to identify potential problem areas
needing corrective action. Failure to properly monitor subrecipients and ensure
closure of the monitoring visits in a timely manner could allow noncompliance
with federal regulations to occur and go undetected, potentially resulting in
questioned costs.
We recommend the Mississippi Department of Education strengthen controls to
ensure compliance with subrecipient monitoring requirements for the Special
Education Cluster Programs.
Yes, 2020-033.
No.
Management at the Mississippi Department of Education concurs with this finding.
See additional comments in the Corrective Action Plan on page 255 of this audit
report.
SPECIAL TESTS AND PROVISIONS — PARTICIPATION OF PRIVATE SCHOOL CHILDREN
Significant Deficiency
Immaterial Noncompliance
2021-038
Strengthen Controls to Ensure Compliance with Equitable Participation of Private
School Children Requirements.
104
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
84.010 Title I — Grants to Local Education Agencies
All Current Active Grants
N/A
N/A
The Mississippi Department of Education (MDE) Final Equitable Services Plan
states, the equitable services filings required include the Final Equitable Service
Plan for each private school served. Each form must be returned, marked, and
signed by the district representative to certify that the plan is true and correct. The
district is required to upload the Final Equitable Service Plan and Written
Affirmation into Mississippi Comprehensive Automated Performance-based
System (MCAPS) by May 29, 2020, though for FY21 that deadline was waived
due to the pandemic and changed to when a local educational agency (LEA)
reopened.
The Elementary and Secondary Education Act Section 1117 (c)(1) states, “A local
educational agency shall have the final authority, consistent with this section, to
calculate the number of children, ages 5 through 17, who are from low-income
families and attend private schools by— (A) using the same measure of low
income used to count public school children; (B) using the results of a survey that,
to the extent possible, protects the identity of families of private school students,
and allowing such survey results to be extrapolated if complete actual data are
unavailable; (C) applying the low-income percentage of each participating public
school attendance area, determined pursuant to this section, to the number of
private school children who reside in that school attendance area; or (D) using an
equated measure of low income correlated with the measure of low income used
to count public school children.”
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that an agency maintain an audit trail to ensure adherence to
written policies and procedures.
During testwork performed on the equitable participation of private school
children requirements for Title I, the auditor tested five out of 30 local educational
agencies (LEAs) receiving Title I equitable services for fiscal year 2021(School
Year 2020-2021) and noted the following exceptions:
e Two instances (or 40 percent) in which the number of qualifying low-
income students per the Household Income Surveys does not agree with
the low-income count number reported in the Non-Public Equitable
105
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of Education (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Services section of the FY 2021 Consolidated Application submitted by
the LEA.
e One instance (or 20 percent) in which the number of qualifying low-
income students per the Free/Reduced Lunch Applications does not agree
with the low-income count number reported in the Non-Public Equitable
Services section of the FY 2021 Consolidated Application submitted by
the LEA.
e One instance (or 20 percent) in which the LEA did not submit the Final
Equitable Service Plan and Written Affirmation in a timely manner. The
Final Equitable Service Plan and Written Affirmation was signed and
uploaded to Mississippi Comprehensive Automated Performance-based
System (MCAPS) following the end of School Year 2020-2021.
e One instance (or 20 percent) in which the Final Equitable Service Plan was
submitted without the District’s Representative’s signature.
e One instance (or 20 percent) in which a LEA was listed on the SY20-21
(FY21) Equitable Services spreadsheet as participating in Title I Equitable
Services, but there were no allocation amounts in MCAPS in the Non-
Public Equitable Services screen for School Year 2020-2021 (FY21).
MDE staff did not review the documentation used by the LEAs to determine the
qualifying low-income student count numbers reported in the Consolidated
Application in MCAPS prior to MDE’s Office of Federal Programs approval.
Failure to review the proper documentation to support the data submitted by the
LEA on their Consolidated Application prior to MDE’s Office of Federal Programs
approval may result in improper payment to the LEAs which could also reduce the
amount of future funding of Title I.
We recommend the Mississippi Department of Education strengthen controls to
ensure compliance with equitable participation of private school children
requirements.
No.
Yes.
Management at the Mississippi Department of Education does not concur with this
finding. See additional comments in the Corrective Action Plan on page 257 of
this audit report; and the Auditor’s Response to the Corrective Action Plan on page
108 and 262.
106
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Education
(MDE) Management
Department of Education — Activities Allowed/Allowable Costs - Material Weakness/Material
Noncompliance
2021-044 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Coronavirus (COVID) Relief Funds (CRF) and Elementary and Secondary
School Emergency Relief Fund (ESSER).
MDE states in their response to the finding that “the crux of this finding hinges on the erroneous assertion
that only one vendor was allowed to offer input on the specifications.” The finding acknowledges that
MDE provided evidence that three of the four vendors received the specifications in advance, but the
winning bidder received them 20 days in advance, while the remaining two vendors received them 7-8 days
in advance. Additionally, the specifications sent to the winning bidder were marked “draft” and redline
comments were added to the specifications by the winning bidder when they were returned to MDE. While
MDE did not adopt all of the winning bidder’s suggested modifications to the specifications, modifications
like the size of the needed laptop screens were adopted by MDE. MDE could provide no support that the
fourth bidder was given advance notice of the specifications.
Secondly, MDE asserts that the points assigned to the winning bidder for the “Devices” category hinged on
the guarantee that the devices would be delivered by the November 20, 2022 delivery timeline; however,
two other bidders with lower price points overall on devices also committed to having devices delivered no
later than November 20, 2022. In fact, bidders were told that that delivery by November 20, 2022 was a
requirement to bid on the RFQ. MDE did not describe why the bidders received the points that they did (as
stated in the finding), and their statement that it depended on delivery dates is not supported by the RFQs.
This type of discrepancy is the reason that the evaluations of RFQ’s should contain sufficient detailed
justification of points awarded.
Department of Education — Reporting — Material Weakness - Material Noncompliance
2021-035 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and
Transparency Act (FFATA) Requirements.
MDE states that they do not concur that FFATA information was entered timely or that no documentation
was maintained that could verify the information was entered; however, their response verifies that “MDE
is unable to demonstrate when the file was initially submitted...” Additionally, MDE has provided a
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601)576-2650
107
corrective action plan to address the elements of the finding. OSA will review this corrective action in later
audits to determine if MDE has complied.”
Department of Education — Special Tests and Provisions — Significant Deficiency/Immaterial
Noncompliance
2021-038 Strengthen Controls to Ensure Compliance with Equitable Participation of Private
School Children Requirements.
MDE states that they do not believe this is a systemic problem with the program, but states that they do not
require supporting documentation in the application phase, and review those documents in the monitoring
phase of the grant process. There is a significant lag time between the application phase on the grant cycle
and MDE’s subrecipient monitoring. Due to this lag, errors in the Local Educational Agency (LEA’s)
documentation would not be identified timely, resulting in improper Title-I allocation. In addition, every
LEA is not selected for on-site monitoring each year. Not reviewing the LEA’s documentation prior to
approval could result in errors in the Title-I allocation that may not be identified timely or at all. MDE
should consider strengthening these controls to ensure the proper allocation of funds timely.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FA (601)576-2650
108
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Finding Number Finding and Recommendation
DEPARTMENT OF HEALTH
REPORTING
Significant Deficiency
Immaterial Noncompliance
2021-033 Strengthen Controls to Ensure Compliance with the Federal Funding
Accountability and Transparency Act (FFATA) Reporting Requirements.
ALN Number 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases
Federal Award No. _ All Current Active Grants
Pass-through Entity N/A
Questioned Costs N/A
Criteria Per the Code of Federal Regulations (2 cfr 200.303), “(a) 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 of the Federal award.”
Under the requirements of the Federal Funding Accountability and Transparency
Office (Pub. L. No. 109-282) as amended by section 6202 of Public Law 110-252,
recipients of grants or cooperative agreements are required to report first-tier
subawards of $30,000 or more to Federal Funding Accountability and
Transparency Act Subaward Reporting System (FSRS) no later than the last day
of the month following the month in which the subaward/subaward amendment
obligation was made or the subcontract award/subcontract modification was made.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specifies that a satisfactory control environment is only
effective when control activities exist. This includes but is not limited to the entity
determining which laws and regulations apply to the entity and setting objectives
that incorporate these requirements.
109
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Condition When performing testwork related to Federal Funding Accountability and
Transparency Act (FFATA) Reporting as of June 30, 2021, the auditor noted that
the Mississippi Department of Health did not perform reporting over FFATA as
required.
Cause The Mississippi Department of Health (Health) staff were unaware of FFATA
reporting requirements.
Effect Failure to report any applicable awards and subawards resulted in Health being in
noncompliance with federal reporting requirements and could result in a
misstatement of federal expenditures to the federal awarding agency. Failure to
submit reports could additionally result in losing federal grants due to
noncompliance.
Recommendation We recommend the Mississippi Department of Health strengthen controls to
ensure compliance with the Federal Funding Accountability and Transparency Act
(FFATA) Reporting Requirements.
Repeat Finding No.
Statistically Valid No.
View of Responsible
Officials Management at the Mississippi Department of Health concurs with this
finding. See additional comments in the Corrective Action Plan on page 299 of
this audit report.
110
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
DEPARTMENT OF HUMAN SERVICES
REPORTING
Material Weakness
Material Noncompliance
2021-010 Strengthen Controls to Ensure Compliance with the Federal Funding
Accountability and Transparency Act (FFATA) Reporting Requirements.
ALN Number(s) 93.558 Temporary Assistance for Needy Families (TANF)
93.667 Social Services Block Grant (SSBG)
93.568 Low Income Home Energy Assistance (LIHEAP)
Federal Award G1901MSTANF (2019) G1901MSSOSR (2019) G1901MSLIEA (2019)
G2001MSTANF (2020) G2001MSSOSR (2020) G2001MSLIEA (2020)
G2101MSTANF (2021) G2101MSSOSR (2021) G2101MSLIEA (2021)
Pass-Through N/A
Questioned Costs N/A
Criteria Per the Code of Federal Regulations (2 cfr 170.200), “(a) federal awarding
agencies are required to publicly report Federal awards that equal or exceed the
micro-purchase threshold and publish the required information on a public-facing,
OMB-designated, government wide website and follow Uniform Guidance to
support Transparency Act implementation. (b) Federal awarding agencies that
obtain post-award data on subaward obligations outside of this policy should take
the necessary steps to ensure that their recipients are not required, due to the
combination of agency-specific and Transparency Act reporting requirements, to
submit the same or similar data multiple times during a given reporting period.”
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specifies that a satisfactory control environment is only
effective when control activities exist. This includes but is not limited to the entity
determining which laws and regulations apply to the entity and setting objectives
that incorporate these requirements.
Condition When performing testwork related to Federal Funding Accountability and
Transparency Act (FFATA) Reporting as of June 30, 2021, the auditor noted that
the Mississippi Department of Human Services (MDHS) did not perform reporting
over FFATA as required by the Code of Federal Regulations (2 cfr 170.200).
Cause MDHS staff failed to follow grant regulations requiring FFATA reporting.
111
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Failure to report any applicable awards and subawards resulted in MDHS being in
noncompliance with federal reporting requirements and could result in a
misstatement of federal expenditures to the federal awarding agency.
We recommend the Mississippi Department of Human Services strengthen
controls to ensure compliance with the Federal Funding Accountability and
Transparency Act (FFATA) Reporting.
No.
No.
Management at the Mississippi Department of Human Services concurs
with this finding. See additional comments in the Corrective Action Plan on
page 303 of this audit report.
Significant Deficiency
2021-012
ALN Number(s)
Federal Award
Pass-Through
Questioned Costs
Criteria
Strengthen Controls Over the Compilation and Submission of Required Federal
Reports for the Social Services Block Grant (SSBG) Program.
93.667 Social Services Block Grant (SSBG)
G1901MSSOSR (2019)
G2001MSSOSR (2020)
G2101MSSOSR (2021)
N/A
N/A
Per the Code of Federal Regulations (2 cfr 200.62), “a nonfederal entity must have
internal control over compliance designed to provide reasonable assurance that;
(a) Transactions are properly recorded and accounted for, in order to:
(1) Permit the preparation of reliable financial statements and Federal
reports...”
Additionally, the Code of Federal Regulations (2 cfr 200.334), states that “Financial
records, supporting documents, statistical records, and all other non-Federal entity
records pertinent to a Federal award must be retained for a period of three years from
the date of submission of the final expenditure report or, for Federal awards that are
renewed quarterly or annually, from the date of the submission of the quarterly or
annual financial report, respectively, as reported to the Federal awarding agency or pass
through entity in the case of a subrecipient...”
112
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when control activities exist. Good internal controls dictate a proper review
process for all calculations and reports. These controls should be reviewed throughout
the accounting process in such a manner to ensure amounts are properly transferred to
the Federal reports. Additionally, adequate controls dictate the use and maintenance of
supporting documentation (i.e. birth certificates, driver’s licenses, ID Cards, etc.) in
order to determine eligibility and ensure the identity of the recipients of benefits and/or
services.
When performing testwork related to Social Services Block Grant (SSBG)
Reporting as of June 30, 2021, the auditor noted the following:
e One instance in which MDHS could not provide supporting
documentation for the amount of Special Services - Youth at Risk
recipients listed on the Post Expenditure Report. The recipient amount
reported on the Post Expenditure Report is 101. Per MDHS personnel, the
amount of youth that received services during 10/1/2019 to 9/30/2020 was
119.
e MODHS nor the SSBG subrecipients, known as Area Agency on Aging
(AAA), require recipients of benefits and/or services to provide proof of
age or identity before receiving benefits and/or services from the AAA.
e MODHS does not have controls in place over the review and approval of
the Social Service Block Grant Post Expenditure Report.
MDHS has no controls in place over the review and approval of Social Service
Block Grant Post Expenditure Report.
Failure to review reports properly could result in the reporting of incorrect amounts
and could impact funding determinations. Additionally, failure to ask for support
of client eligibility and identity could result in fraudulent spending.
We recommend the Mississippi Department of Human Services (MDHS)
strengthen controls over the compilation and submission of required federal reports
for the Social Services Block Grant (SSBG) Program. Additionally, MDHS should
keep adequate records of recipients served in each category of service and should
require AAAs to ask for proper supporting documentation to verify eligibility and
identities of recipients of benefits and/or services.
No.
Yes.
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View of Responsible
Officials
Management at the Mississippi Department of Human Services concurs
with this finding. See additional comments in the Corrective Action Plan on
page 304 of this audit report.
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-013
CFDA Number
Federal Award No.
Pass-Through
Questioned Costs
Criteria
Strengthen Controls over On-Site Monitoring for the Supplemental Nutrition
Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF),
Child Care and Development Block Grant (CCDF), Low Income Home Energy
Assistance Program (LIHEAP), and Social Services Block Grant (SSBG)
Programs.
10.551 Supplemental Nutrition Assistance Program
93.558 Temporary Assistance for Needy Families State Programs
93.667 Social Services Block Grant
93.575 Child Care and Development Block Grant
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund
93.568 Low Income Home Energy Assistance Program
SNAP — Letter of Credit 2001MSCCDF (2020)
G1901MSTAMNF (2019) G2001MSSOSR (2020)
G2001MSTANF (2020) G20B1MSLIEA (2020)
N/A
N/A
The terms and conditions of the grant agreements between the Mississippi
Department of Human Services (MDHS) and the U.S. Department of Health and
Human Services require MDHS to administer grants in compliance with the Code
of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr
Part 200.331) designates MDHS as a pass through entity to properly identify
subgrant requirements to subrecipients, evaluate the risk of noncompliance for
each subrecipient, and monitor the activities of subrecipients as necessary to ensure
that subgrants are used for authorized purposes, complies with the terms and
conditions of the subgrants and achieves performance goals.
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
The auditor evaluated MDHS’s compliance with subrecipient monitoring
requirements based on written policies and procedures designed by MDHS’s
Division of Program Integrity — Division of Monitoring (DM) to satisfy during-
the-award monitoring requirements. DM procedures require: an on-site
monitoring review of each subrecipient contract at least once during the subgrant
period. Monitoring tools/checklists are used during each on-site monitoring review
to provide guidance and to document a review was performed. The on-site
monitoring workpapers are reviewed and approved by DM supervisory personnel
prior to issuance of a written report, the Initial Report of Findings &
Recommendations, which is used for communicating finding(s) and/or questioned
costs to subrecipients. The written report should be issued within 60 days from the
date of the exit conference, which is normally held on the last day of the on-site
review. Additionally, if the initial report identifies any administrative findings or
questioned costs, a response to the findings is required to be submitted by the
subrecipient to DM within thirty (30) working days from the date the report was
issued.
The Code of Federal Regulations (2 cfr 200.328(a)) states that the non-Federal
entity is responsible for oversight of the operations of the Federal award supported
activities. The non-Federal entity must monitor its activities under Federal awards
to assure compliance with applicable Federal requirements and performance
expectations are being achieved. Monitoring by the non-Federal entity must cover
each program, function or activity. See also § 200.331 Requirements for pass-
through entities.
The Code of Federal Regulations (2 cfr 200.328(b)(2)), states the non-Federal
entity must submit performance reports using OMB-approved government-wide
standard information collections when providing performance information. As
appropriate in accordance with above mentioned information collections, these
reports will contain, for each Federal award, brief information on the following
unless other collections are approved by OMB:
(i) A comparison of actual accomplishments to the objectives of the Federal
award established for the period. Where the accomplishments of the
Federal award can be quantified, a computation of the cost (for example,
related to units of accomplishment) may be required if that information
will be useful. Where performance trend data and analysis would be
informative to the Federal awarding agency program, the Federal
awarding agency should include this as a performance reporting
requirement.
(ii) The reasons why established goals were not met, if appropriate.
(111) Additional pertinent information including, when appropriate, analysis
and explanation of cost overruns or high unit costs.
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Condition
The Code of Federal Regulations (2 CFR 200.332 (d)) States that the pass-through
entity “Monitor the activities of the subrecipient as necessary to ensure that the
subaward is used for authorized purposes, in compliance with Federal statutes,
regulations, and the terms and conditions of the subaward; and that subaward
performance goals are achieved...”
Additionally, the Code of Federal Regulations (2 cfr 200.62), states that a non-
Federal entity must have internal control over compliance designed to provide
reasonable assurance that transactions are executed in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award that could
have a direct and material effect on a Federal program; and any other Federal
statutes and regulations that are identified in the Compliance Supplement.
Furthermore, the /nternal Control — Integrated Framework published by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
specifies that a satisfactory control environment is only effective when there are
adequate control activities in place. Effective control activities dictate that: the
agency perform appropriate; multi-level reviews over the monitoring process; the
agency and subgrants of the agency maintain adequate documentation (i.e.
Identification Cards, Birth Certificates, Driver’s Licenses, etc.) in order to verify
eligibility information submitted by clients of the Federal Programs; the agency
perform tests over the eligibility of clients of the Federal program in order to ensure
the subrecipient is in compliance with Federal statutes, regulations, and the terms
and conditions of the subaward; the agency ensures timely communication from
the subgrantees and timely resolution of findings; and the Division of Monitoring
act separately from the programmatic funding divisions in order to prevent; detect;
and deter fraud, waste, and abuse or the misuse of federal funds.
During testwork performed on subrecipient on-site monitoring for 117 subgrant
contracts during state fiscal year 2020, auditor noted the following exceptions:
e Two instances, or 2 percent, in which the Division of Monitoring did
not perform monitoring of subgrants.
e Five instances, or 5 percent, in which the Supervisor's Checklist was
not included for Subrecipient on the FY 2020 Monitoring Reviews
Smartsheet; therefore, auditor could not verify Supervisory Review of
the Monitoring process.
e 10 instances, or 9 percent, in which the Programmatic Tool was not
included for Subrecipient on FY 2020 Monitoring Reviews
Smartsheet, and could not be provided by the Division of Monitoring.
e Four instances, or 3 percent, in which the Initial Report was not issued
within 60 working days of the exit conference.
e 28 instances, or 24 percent, in which auditor could not verify
Eligibility was tested by either the Division of Monitoring or the
Programmatic Division, or the Monitoring Smartsheet did not contain
enough documentation to ensure eligibility was tested appropriately.
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Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
e One instance, or 1 percent, in which auditor could not verify a
clearance or resolution of monitoring findings.
e One instance, or | percent, in which the Division of Monitoring did
not receive a response from a subrecipient in regards to the Initial
Finding Letter.
Additionally, auditor noted that the Division of Monitoring performs monitoring
of subrecipients’ programmatic performance and spending based on programmatic
tools provided by MDHS’ individual programmatic divisions and not on
knowledge of the federal program and its corresponding rules and regulations.
Staff were either unaware or did not follow identified policies and procedures for
monitoring requirement.
MDHS programmatic funding divisions rely upon DM monitoring procedures to
verify compliance with program regulations and to identify potential problem areas
needing corrective action. Failure to properly monitor subrecipients in a timely
manner could allow noncompliance with federal regulations to occur and go
undetected, potentially resulting in questioned costs.
We recommend the Mississippi Department of Human Services’ Division of
Program Integrity — Division of Monitoring (DM) strengthen controls over
subrecipient monitoring. We also recommend the agency ensure subgrants are
monitored timely and that the “Report of Findings & Recommendations” prepared
as a result of the on-site monitoring be issued in a timely manner to enable
immediate corrective action procedures to be initiated. Additionally, we
recommend that the agency maintain all supporting monitoring tools, reports, and
correspondence in the monitoring file. We further recommend the agency monitor
eligibility for all subrecipients and ensure subrecipients maintain adequate
documentation that supports the eligibility determination of their clients.
Yes — 2020-030; Yes — 2019-042 in 2019; 2018-046 in 2018; 2017-037 in 2017;
2016-027 in 2016; 2015-005 in 2015; 2014-017 in 2014; 2013-015 in 2013.
Yes.
Management at the Mississippi Department of Human Services concurs
with this finding. See additional comments in the Corrective Action Plan on
page 304 of this audit report.
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Material Weakness
Material Noncompliance
2021-014
CFDA Number
Federal Award No.
Pass-Through
Questioned Costs
Criteria
Strengthen Controls Over Subrecipient Monitoring to Ensure Compliance with
Uniform Guidance Auditing Requirements.
10.551 Supplemental Nutrition Assistance Program
93.558 Temporary Assistance for Needy Families State Programs
93.575 Child Care and Development Block Grant
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund
93.667 Social Services Block Grant
93.568 Low Income Home Energy Assistance Program
SNAP — Letter of Credit
TANF — G1901MSTANF, G2001MSTANF
CCDF — G1901MSCCDF, G2001MSCCDF
SSBG — G2001MSSOSR
LIHEAP — G20B1MSLIEBA, G2001MSLIEA
N/A
N/A
The Internal Control - Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) specifies that a
satisfactory control environment is only effective when there are adequate control
activities in place. Adequate controls would allow for a tracking system that
includes all sub-recipients receiving federal funds from the agency as well as the
maintenance of OMB monitoring files.
The Office of Management and Budget’s (OMB) Uniform Guidance states the
pass-through entity is responsible for (1) ensuring that subrecipients expending
$750,000 or more in Federal awards during their fiscal year have met the audit
requirements of Uniform Guidance and that the required audits are completed
within nine months of the end of the subrecipient’s audit period; (2) issuing a
management decision on findings within 6 months after receipt of the
subrecipient’s audit report; and (3) ensuring that the subrecipient takes timely
and appropriate corrective action on all audit findings. In cases of continued
inability or unwillingness of a subrecipient to have the required audits, the
pass-through entity shall take appropriate action using sanctions.
Additionally, the Code of Federal Regulations (45 cfr 200.62), states that a non-
Federal entity must have internal control over compliance designed to provide
reasonable assurance that;
(a) Transactions are properly recorded and accounted for, in order to:
(1) Permit the preparation of reliable financial statements and Federal
reports;
(2) Maintain accountability over assets; and
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(3) Demonstrate compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award;
(b) Transactions are executed in compliance with:
(1) Federal statutes, regulations, and the terms and conditions of the
Federal award that could have a direct and material effect on a Federal
program; and
(2) Any other Federal statutes and regulations that are identified in the
Compliance Supplement; and
(c) Funds, property, and other assets are safeguarded against loss from
unauthorized use or disposition.
The Code of Federal Regulations (2 cfr §200.331(f)) states all pass-through entities
(PTE’s) must verify that every subrecipient is audited as required by Subpart F -
Audit Requirements of this part when it is expected that the subrecipient's Federal
awards expended during the respective fiscal year equaled or exceeded the
threshold set forth in § 200.501 Audit requirements.
The Code of Federal Regulations (2 cfr §200.332) states that all pass-through
entities must:
(d) Monitor the activities of the subrecipient as necessary to ensure that the
subgrant is used for authorized purposes, in compliance with Federal statutes,
regulations, and the terms and conditions of the subgrant; and that subgrant
performance goals are achieved. Pass-through entity monitoring of the
subrecipient must include:
(1) Reviewing financial and performance reports required by the pass through
entity.
(2) Following-up and ensuring that the subrecipient takes timely and
appropriate action on all deficiencies pertaining to the Federal award
provided to the subrecipient from the pass-through entity detected through
audits, on-site reviews, and written confirmation from the subrecipient,
highlighting the status of actions planned or taken to address Single Audit
findings related to the particular subgrant.
The Code of Federal Regulations (2 cfr § 200.512(a)(1)) states the audit must be
completed and the data collection form described in paragraph (b) of this section
and reporting package described in paragraph (c) of this section must be submitted
within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine
months after the end of the audit period. If the due date falls on a Saturday, Sunday,
or Federal holiday, the reporting package is due the next business day.
Furthermore, MDHS’ Policy regarding the Responsibilities of the Monitoring Unit
Related to Uniform Guidance Audit Requirements Audits includes:
(1) Providing an Initial Notice Letter to subrecipients to notify them of the audit
requirements under the OMB Uniform Guidance Audit Requirements and
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Condition
providing the Subrecipient Audit Information Form (SAIF) to document that an
audit is not required for subrecipients that expend less than $750,000.
(2) Issuing a Reminder Letter to subrecipients that have not submitted either an audit
report or SAIF form to document that an audit was not required.
(3) Issuing a Demand Letter to subrecipients that fail to submit an audit report or SAIF
form to document that an audit was not required.
(4) Identifying any audit findings contained in the audit reports and notifying the
responsible MDHS Funding Division so that the audit findings can be resolved
within the six-month deadline imposed under OMB Uniform Guidance Audit
Requirements.
(5) Maintaining an audit file for each MDHS subrecipient which includes an archive
copy of the audit report or Subrecipient Audit Information Form, the Uniform
Guide for Initial Review of Audit Reports, copies of the transmittal memorandum
sent to each MDHS Funding Division, copies of any reminder letters sent to the
subrecipient, and the Audit Finding and Questioned Costs Tracking Record and a
copy of the clearance letter issued by the MDHS Funding Division for those
subrecipients with audit findings.
Finally, the MDHS Subgrant/Agreement Manual states that all MDHS
subrecipients are required to complete the MDHS Subrecipient Audit Information
Form (MDHS-DPI-002). This form must be submitted to the Division of Program
Integrity — Division of Monitoring no later than ninety (90) calendar days after the
end of the subrecipient’s fiscal year. This form is necessary to certify the sources
and amounts of all Federal awards received and expended by the subrecipient.
During the audit of the Mississippi Department of Human Services (MDHS), the
auditors reviewed the Division of Monitoring (DM) audit files and Single Audit
Tracking Document for MDHS Subgrantees for state fiscal year 2019. During the
review, the following weaknesses were noted:
e One instance in which the Uniform Guide for the Initial Report of
Uniform Guidance Audit Reports was not included on the FY 2019
Single Audit Tracking Smartsheet; therefore, auditor could not verify
the DM reviewed and approved the submitted Subgrantee audit report.
e 33 instances in which Auditor could not verify if reminder letters were
sent to the Subrecipient due to these letters not being included on the
FY 2019 Single Audit Tracking Smartsheet or reminder letters were
sent untimely.
e Three instances in which the Office of Monitoring did not receive the
Subgrantee SAIF form within 90 days of the subrecipient’s fiscal year
end. Average submission was 123 working days late.
e Eight instances in which the FY 2019 Single Audit Tracking
Smartsheet did not contain a SAIF form or audit report for the
Subgrantee; therefore, auditor could not verify compliance with the
monitoring process.
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Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Staff were either unaware or did not follow identified policies and procedures for
subrecipient monitoring related to Uniform Guidance.
Failure to properly monitor subrecipients could allow noncompliance with federal
regulations to occur and go undetected, potentially resulting in fraud, waste, and
abuse within the agency.
We recommend the Mississippi Department of Human Services’ Division of
Program Integrity — Division of Monitoring (DM) strengthen controls over
subrecipient monitoring for Uniform Guidance audits to ensure recipients
expending $750,000 or more in Federal funds during their fiscal year are
appropriately monitored and an Uniform Guidance audit is obtained and continue
to follow-up in a timely manner to obtain an Uniform Guidance audit or
Subgrantee Audit Information Form after the demand letter is issued.
Yes — 2020-031; Yes — 2019-043; 2018-047 in 2018; 2017-038 in 2017; 2016-028
in 2016; 2015-009 in 2015; 2014-016 in 2014.
Yes.
Management at the Mississippi Department of Human Services concurs with
this finding. See additional comments in the Corrective Action Plan on page
306 of this audit report.
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
DIVISION OF MEDICAID
ACTIVITIES ALLOWED AND ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021-039
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
Strengthen Controls to Ensure Compliance with the Allowable Costs
Requirements of the Children’s Health Insurance Program (CHIP).
93.767 — Children’s Health Insurance Program (CHIP)
All Current Active Grants
N/A
N/A
Code of Federal Regulations (42 CFR §457.505) states, “The State plan must
include a description of (a) the amount of premiums, deductibles, coinsurance,
copayments, and other cost sharing imposed.”
Code of Federal Regulations (42 CFR § 457.515) states, “To impose copayments,
coinsurance, deductibles or similar charges on enrollees, the State plan must
describe — (a) The service for which the charge is imposed; (b) The amount of the
charge; (c) The group or groups of enrollees that may be subject to the cost-sharing
charge.”
Mississippi Children’s Health Insurance Program State Plan Section 8.2.3 states
that children whose annual family income is less than or equal to 150 percent of
the Federal Poverty Level are not subject to any co-payments or co-insurance.
Mississippi Children’s Health Insurance Program State Plan Section 8.2.3 states
that children whose annual family income is between 151 percent and 175 percent
of the Federal Poverty Level are subject to co-payments of $5.00 per doctor visit,
$15.00 per emergency room visit, and an out-of-pocket maximum of $800.00.
Mississippi Children’s Health Insurance Program State Plan Section 8.2.3 states
that children whose annual family income is between 176 percent and 209 percent
of the Federal Poverty Level are subject to co-payments of $5.00 per doctor visit,
$15.00 per emergency room visit, and an out-of-pocket maximum of $950.00.
During testwork performed over allowable costs requirements for the Children’s
Health Insurance Program (CHIP) as of June 30, 2021, the auditor tested 60 total
beneficiaries and noted the following:
e 20 (or 33 percent) of the CHIP beneficiaries tested in which the beneficiary
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was not placed in the correct CHIP sub-group that determines the
beneficiary’s co-payments and out-of-pocket maximums.
o Seven instances (or 12 percent) in which the family of the
beneficiary had an annual income at or below 150 percent of the
Federal Poverty Level, but the beneficiary was placed in the CHIP
sub-group for children whose family had an annual income
between 151 percent and 175 percent of the Federal Poverty
Level.
o 13 instances (or 22 percent) in which the family of the beneficiary
had an annual income at or below 175 percent of the Federal
Poverty Level, but the beneficiary was placed in the CHIP sub-
group for children whose family had an annual income between
176 percent and 209 percent of the Federal Poverty Level.
Cause The Federal Poverty Level was not correctly entered into the computer system and
co-payments and out-of-pocket maximums were not calculated correctly.
Effect Failure to record the correct Federal Poverty Level may result in beneficiaries
paying incorrect co-payments and out-of-pocket expenses.
Recommendation We recommend the Mississippi Division of Medicaid strengthen the controls to
ensure compliance with the allowable costs requirements of the Children’s Health
Insurance Program (CHIP).
Repeat Finding Yes, 2020-041.
Statistically Valid Yes.
View of Responsible
Officials Management at the Mississippi Division of Medicaid concurs with this
finding. See additional comments in the Corrective Action Plan on page 324 of
this audit report.
Significant Deficiency
Immaterial Noncompliance
2021-040 Strengthen Controls to Ensure Compliance with the Allowable Costs
Requirements of the Medical Assistance Program.
ALN Number 93.778 — Medical Assistance Program (Medicaid; Title XIX)
Federal Award No. All Current Active Grants
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Pass-through Entity
Questioned Costs
Criteria
Condition
Cause
Effect
Recommendation
N/A
$3,863
Code of Federal Regulations (42 CFR § 438.2) defines a capitation payment as “a
payment the State makes periodically to a contractor on behalf of each beneficiary
enrolled under a contract and based on the actuarially sound capitation rate for the
provision of services under the state plan.”
Code of Federal Regulations (42 CFR § 438.2) defines a rate cell as a set of
mutually exclusive categories of enrollees that is defined by one or more
characteristics for the purpose of determining the capitation rate and making a
capitation payment; such characteristics may include age, gender, eligibility
category, and region or geographic area. Each enrollee should be categorized in
one of the rate cells for each unique set of mutually exclusive benefits under the
contract.
Milliman’s State Fiscal Year 2021 MississippiCAN Capitation Rate Development
Report states, “The MississippiCAN state fiscal year (SFY) 2021 capitation rates
are developed using Mississippi FFS Medicaid data, CCO encounter data, and
CCO financial reporting data for a comparable population to that enrolled in CCOs.
DOM calculates state-set rates by rate category on a statewide basis with area
adjustments based on an enrolled member’s county of residence.”
Milliman’s State Fiscal Year 2021 MississippiCAN Capitation Rate Development
Report states Coordinated Care Organizations (CCO) capitation payments will
vary based on their members’ county of residence. We assigned each county to one
of the following regions: North, Central, or South.
During testwork performed over allowable costs requirements for the Medical
Assistance Program as of June 30, 2021, the auditor tested 120 managed care
beneficiaries’ capitation rates and noted the following:
e Three instances (or 2.5 percent) in which the incorrect county of residence
was used to determine the beneficiaries’ capitation rate. Of the three, two
instances in which the incorrect county of residence resulted in Medicaid
paying a higher capitation rate for the beneficiaries, resulting in questioned
costs of $3,863. Questioned costs were not projected for this item due to
the different locations of the instances
The county code was not changed from the default code in the computer system.
Using the incorrect county code resulted in the Mississippi Division of Medicaid
paying higher capitation rates, resulting in questioned costs.
We recommend the Mississippi Division of Medicaid strengthen controls to ensure
compliance with allowable cost requirements of the Medical Assistance Program.
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Repeat Finding
Statistically Valid
View of Responsible
Officials
No.
Yes.
Management at the Mississippi Division of Medicaid concurs with this
finding. See additional comments in the Corrective Action Plan on page 324 of
this audit report.
ELIGIBILITY
Material Weakness
Material Noncompliance
2021-041
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Eligibility Requirements of the
Medical Assistance Program and the Children’s Health Insurance Program
(CHIP).
93.767 — Children’s Health Insurance Program (CHIP)
93.778 — Medical Assistance Program (Medicaid; Title XIX)
All Current Active Grants
N/A
$66,926
Code of Federal Regulations (42 CFR § 435.945(d)) states, “All State eligibility
determination systems must conduct data matching through the Public Assistance
Reporting Information System (PARIS).”
The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan
states, “The state uses quarterly PARIS data matches to resolve duplicate Medicaid
participation in another state and residency discrepancies.”
Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file
transmissions of Medicaid recipients active in the previous quarter are submitted
for matching purposes with applicable federal databases (PARIS) to identify
benefit information on matching Federal civilian employees and military members,
both active and retired, and to identify duplicate participation across state lines.
Miss. Code Ann (1972) Section 43-13-116.1(2) states, “In accordance with Section
1940 of the federal Social Security Act (42 USCS Section 1396w), the Division of
Medicaid shall implement an asset verification program requiring each applicant
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for or recipient of Medicaid assistance on the basis of being aged, blind or disabled,
to provide authorization by the applicant or recipient, their spouse, and by any
other person whose resources are required by law to be disclosed to determine the
eligibility of the applicant or recipient for Medicaid assistance, for the division to
obtain from any financial institution financial records and information held by any
such financial institution with respect to the applicant, recipient, spouse or such
other person, as applicable, that the division determines are needed to verify the
financial resources of the applicant, recipient or such other person in connection
with a determination or redetermination with respect to eligibility for, or the
amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid
applicant or recipient, their spouse, and any other applicable person described in
this section shall provide authorization (as specified by 42 USCS Section
1396w(c)) to the division to obtain from any financial institution, any financial
record, whenever the division determines that the record is needed in connection
with a determination or redetermination of eligibility for Medicaid assistance.”
The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual
Section 303.03 states, “Section 1940 of the Social Security Act and Mississippi
state law requires the verification of liquid assets held in financial institutions for
purposes of determining Medicaid eligibility for applicants and beneficiaries in
programs with an asset test, i.c., Aged, Blind, and Disabled (ABD) Medicaid
programs.
Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual
Section 303.03, implementation of MDOM’s Asset Verification System (AVS) is
on/after November 1, 2018. The AVS contractor will perform electronic matches
with financial institutions to detect and verify bank accounts based on identifiers
including Social Security Numbers for the following COEs: 010 through 015, 019,
025, 045, 062 through 066, and 094 through 096. At each application and
redetermination, a request will be submitted through AVS for information on an
individual’s financial accounts. The AVS must be used as a primary data source
when verifying resources.”
Code of Federal Regulations (42 CFR § 435.948(a)(1)) states, “The agency must
in accordance with this section request the following information relating to
financial eligibility from other agencies in the State and other States and Federal
programs to the extent the agency determines such information is useful to
verifying the financial eligibility of an individual: Information related to wages,
net earnings from self-employment, unearned income and resources from the State
Wage Information Collection Agency (SWICA), the Internal Revenue Service
(IRS), the Social Security Administration (SSA), the agencies administering the
State unemployment compensation laws, the State administered supplementary
payment programs under section 1616(a) of the Act, and any State program
administered under a plan approved under Titles I, X, XIV, or XVI of the Act."
Code of Federal Regulations (42 CFR § 435.949(b)) states, "To the extent that
information related to eligibility for Medicaid is available through the electronic
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Condition
service established by the Secretary, States must obtain the information through
such service, subject to the requirements in subpart C of part 433 of this chapter,
except as provided for in §435.945(k) of this subpart."
The CMCS Informational Bulletin - Subject: MAGI-Based Eligibility Verification
Plans states, "To the extent that information related to Medicaid or CHIP eligibility
is available through the electronic data services hub established by the Secretary,
states must obtain the information through this data services hub. Subject to
Secretarial approval and the conditions described in §435.945(k) and 457.380(i),
states can obtain information through a mechanism other than the data services
hub."
Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan,
Mississippi Division of Medicaid has determined MDES to be a useful electronic
data source.
Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are
submitted weekly to Mississippi Department of Employment Security (MDES) to
verify wage and unemployment benefits. Renewals are submitted once per month
for the same data. Renewal files are processed in the month prior to the scheduled
review due date.
The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual
Section 201.03.04A requires the use of the individual’s most recent tax return to
verify income for individuals considered self-employed, a shareholder in an S
Corporation, a partner in a business or one who has income from a partnership,
LLP, LLC or S Corporation.
During testwork performed over eligibility requirements for the Medical
Assistance Program and the Children’s Health Insurance Program (CHIP) as of
June 30, 2021, the auditor tested 300 total beneficiaries (180 Modified Adjusted
Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD)
beneficiaries) and noted the following:
e Mississippi Division of Medicaid (MDOM) did not use federal tax and/or
state tax data to verify income, including self-employment income, out-
of-state income, and various types of unearned income. The Medicaid
State Plan requires the verification of all income for MAGI-based
eligibility determinations, and the Mississippi Division of Medicaid’s
Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the
use of an individual’s most recent tax return to verify self-employment
income. This section further states, if tax returns are not filed, not
available, or if there is a change in income anticipated for the current tax
year, refer to Chapter 200, Net Earnings from Self-Employment at
200.09.08, for policy on estimating net earnings from self-employment.
The MDOM’s State Plan does not allow for accepting self-attested
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
income. Therefore, if an applicant indicates zero for self-employment
income, the amount of zero must be verified like any other income amount.
19 of the 180 MAGI beneficiaries (or 11 percent) reported self-
employment income, out-of-state income, or unearned income on the
Mississippi income tax return, but the income was not reported on the
recipient’s application. Of the 19 instances, nine instances (or 47 percent)
were noted in which the total income per the most recent tax return
available at the time of determination exceeded the applicable income
limit for the recipient’s category of eligibility.
Due to MDOM’s failure to verify self-employment income on the
applicant’s tax return, MDOM was not aware income exceeded eligibility
limits, and did not request any additional information that might have
explained why income was not self-reported; therefore, auditor could not
determine with certainty that individuals are, in fact, ineligible. However,
information that MDOM used at the time of the eligibility determination
did not support eligibility. The auditor acknowledges that the self-
employment income reported on the income tax returns does not, in and
of itself, make the nine sited beneficiaries ineligible, it does indicate that
they had self-employment income during the year of eligibility
determination that was, potentially, not accurately reported on their
application. Furthermore, MDOM did not perform any procedures to
verify that the self-employment income reported on the applications was
accurate.
MDOWM’s policy requires the use of the individual’s most recent tax return
to verify income for individuals considered self-employed, a shareholder
in an S Corporation, or a partner in a business or one who has income from
a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns
filings, including allowable extensions, MDOM requires the use of prior
year income verification in these circumstances. Additionally, due to the
COVID-19 pandemic, some beneficiaries did not have a redetermination
performed in FY 2021, so the auditor tested the prior year redetermination
(which made the beneficiary eligible as of June 30, 2021). The due dates
for Mississippi tax returns were extended to May 15, 2020 for 2019 tax
returns and May 17, 2021 for 2020 tax returns. Based on the extended due
dates, and the assumption that the beneficiaries filed their tax returns
before these due dates, the auditor used tax return data from the following
years: 2018 for determinations prior to May 15, 2020, 2019 for
determinations from May 15, 2020 to May 16, 2021, and 2020 for
determinations on or after May 17, 2021.
The fiscal year payments for these nine beneficiaries that might not have
been eligible to receive the benefits totaled $23,221 of questioned costs.
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Based on the error rate calculated using the capitation payments of our
sample, the projected amount of capitation payments made to beneficiaries
who it is reasonably possible were ineligible would fall between
$66,046,582 (projected costs based on actual month payment sampled)
and $69,910,510 (projected costs based on average monthly payments
sampled).
The following is a breakdown of these costs by category:
CHIP: Between $11,746,594 (average monthly) to $13,800,910 (actual
monthly)
MAGI Managed Care: Between $52,245,672 (actual monthly) to
$58,163,916 (average monthly)
For 19 of the 180 MAGI beneficiaries (or 11 percent), income was not
verified through Mississippi Department of Employment Security
(MDES) at the time of the redetermination for the eligibility period that
covered June 30, 2021. This resulted in questioned costs of $43,705.
Questioned costs were not projected for this item due to the inability to
statistically validate the sample.
85 ABD beneficiaries required resource verifications through the Asset
Verification system (AVS). Of the 85, seven instances (or 8 percent) in
which resources were not verified through AVS at the time of
redetermination.
293 out of 300 beneficiaries (or 98 percent) were not included on all of the
required quarterly Public Assistance Reporting Information System
(PARIS) file transmissions for fiscal year 2021.
o Of the 293 beneficiaries, 249 beneficiaries (or 85 percent) were
not included on any quarterly PARIS file transmissions during
fiscal year 2021.
Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal
controls to ensure compliance with eligibility requirements. Additionally, MDOM
did not have policies in place to verify certain types of income on applicant’s tax
returns, as required by its own policy and procedures, for eligibility
determinations.
Effect Failure to comply with eligibility requirements could result in ineligible
beneficiaries being determined eligible, resulting in questioned costs and the
possible recoupment of funds by the federal granting agency.
Recommendation We recommend the Mississippi Division of Medicaid strengthen controls to ensure
compliance with eligibility requirements of the Medical Assistance Program and
the Children’s Health Insurance Program (CHIP).
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Repeat Finding
Statistically Valid
View of Responsible
Officials
Yes, 2020-042 and 2019-027.
Portions of these findings were based on statistically valid samples.
Management at the Mississippi Division of Medicaid does not concur with
this finding. See additional comments in the Corrective Action Plan on page 325
of this audit report; and the Auditor’s Response to the Corrective Action
Plan at page 135 and 329.
SPECIAL TESTS AND PROVISIONS — PROVIDER ELIGIBILITY
Material Weakness
Material Noncompliance
2021-042
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Provider Eligibility Requirements
of the Children’s Health Insurance Program (CHIP).
93.767 — Children’s Health Insurance Program (CHIP)
All Current Active Grants
N/A
N/A
Code of Federal Regulations (42 CFR 455.432) states the State Medicaid agency
must conduct pre-enrollment and post-enrollment site visits of providers who are
designated as “moderate” or “high” categorical risks to the Medicaid program. The
purpose of the site visit will be to verify that the information submitted to the State
Medicaid agency is accurate and to determine compliance with Federal and State
enrollment requirements.
Code of Federal Regulations (42 CFR 438.602(b)) states, “The State must screen
and enroll, and periodically revalidate, all network providers of MCOs, PIHPs,
and PAHPs, in accordance with the requirements of part 455, subparts B and E of
this chapter. ...This provision does not require the network provider to render
services to FFS beneficiaries.”
Medicaid Provider Enrollment Compendium Section 1.4.1.A.1.a states, “Under the
requirement at 438.602, State Medicaid Agencies (SMAs) may delegate screening
activities required under Part 455 Subpart E to a network plan. However, based
upon privacy and security concerns including data breaches that include personally
identifiable information (PII), we are not allowing SMAs to delegate the collection
of disclosures under Subpart B in a manner that results in a single provider entity
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Condition
disclosing the information to more than one entity. A provider that is providing
services on behalf of the state Medicaid plan should not be required to disclose PII
to multiple entities with which the SMA contracts. In an effort to mitigate the risk
that PI will be compromised in a data breach, we further believe the SMA should
store PII in the fewest number of locations necessary to meet the requirement of
the regulations at Subparts B and E.”
Medicaid Provider Enrollment Compendium Section 1.5.B states, “A SMA may,
but is not required to, delegate screening activities required under 455 Subpart E
to third parties, including networks. (See section 1.4.1.A.1.a. for limitations on
delegating the collection of disclosures under Subpart B). In the event the SMA
opts to delegate screening under Subpart E, the SMA should make sure third
parties are carrying out activities consistently and should make sure redundant
screening is not conducted for a provider participating in multiple networks. In
addition, the SMA should make sure the third party is documenting screening. For
those states delegating screening activities to third party entities, the State should
consider any conflicts of interest that may arise. For example, some managed care
entities (MCEs) may have delegated credentialing agreements that allow providers
to “credential themselves” and submit the appropriate certification needed to
participate in a MCE plan. Once the provider attests and submits they have
completed all credentialing requirements, the MCE determines whether they will
approve of the provider’s participation in the plan. This arrangement is not
permissible in complying with the screening requirements at 455 Subpart E as it
not only creates a conflict of interest but also we do not believe it allows the state
to maintain appropriate oversight of the screening activities.”
Medicaid Provider Enrollment Compendium Section 1.5.1.B.1 states, “Many
Medicaid-enrolled hospitals employ hospitalists or contracted emergency room
physicians who are not separately enrolled as Medicaid providers.
Services/items/prescriptions that are ordered/referred/written by these
hospitalists/contracted physicians are ineligible for payment unless the
hospitalist/physician is enrolled in Medicaid, to the extent the claim does not
qualify for an exception under 1.5.1.B.2. “When the SMA is not required to Enroll
ORPs.”
For the Children’s Health Insurance Program (CHIP), the Mississippi Division of
Medicaid (MDOM) delegates the screening of providers to each of the CHIP
managed care organizations (MCOs). During fiscal year 2021, MDOM had
contracts with two CHIP managed care organizations (MCOs). United Health
Care (United) and Molina were healthcare network providers for the entire year.
Due to MDOM delegating screening for CHIP, providers were potentially required
to disclose personally identifiable information (PII) to multiple entities. Federal
regulations require that MDOM limit this disclosure of PII to only one entity for
credentialing in order to reduce the possibility of data breaches, and to eliminate
redundant screening being conducted for a provider participating in more than one
CHIP MCO and/or the Medicaid Assistance Program.
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Cause
Effect
Per review of the Molina’s 2021 External Quality Review (EQRO) report and
discussion with Molina officials, Molina has not completed any required site visits
for moderate risk or high risk providers since becoming a CHIP MCO in 2019.
Molina has been working with contractors to establish a procedure to complete the
required site visits.
Per review of Molina policies and discussion with Molina officials, Molina is not
screening and credentialing all providers individually. Providers are screened and
credentialed by Molina, a delegated provider entity, at the facility level or not
required to be screened or credentialed.
Per Molina Healthcare Credentialing Program Policy (Policy CR 01), “Molina
does not require credentialing for some types of practitioners who are credentialed
by the organization(s) that employ or contract with them. If a practitioner meets
any one of the following criteria, Molina does not require them to be credentialed:
e Practitioners who practice exclusively in an inpatient setting and provide
care for Molina Members due to being directed to the hospital or another
inpatient setting. Examples may include pathologists, radiologists,
anesthesiologists, neonatologists, emergency room physicians, critical
care medicine and hospitalists.
e Practitioners who practice exclusively in freestanding facilities and
provide care for Molina Members due to being directed to the facility.”
Per Molina Healthcare Credentialing Program Policy (Policy CR 01), “When a
practitioner or organizational provider has a direct contract with Molina and is also
credentialed by and under contract with an entity Molina has delegated
credentialing to, Molina does not need to credential the practitioner or
organizational provider. The credentialing done by the delegated entity applies to
the practitioner for any location in which they are working. Molina receives regular
reports from each delegated entity and if agreement between the practitioner and
the delegated entity terminates, Molina credentials the practitioner as indicated
below.”
Delegating the credentialing allows providers to “credential themselves” which
creates a conflict of interest and does not allow the state appropriate oversight
maintain appropriate oversite of the screening and credentialing activities.
The Mississippi Division of Medicaid (MDOM) delegated the screening and
credentialing of CHIP providers to managed care organizations.
Failure to properly credential providers could result in payments being made to
ineligible providers, resulting in unallowable costs. In addition, redundant
screening can place personally identifiable information (PII) at risk for data
breaches.
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PART 3 — Federal Award Findings and Questioned Costs — US Department of HHS (continued)
Recommendation We recommend the Mississippi Division of Medicaid strengthen controls to ensure
compliance with the provider requirements of the Children’s Health Insurance
Program (CHIP).
Repeat Finding Yes, 2020-043.
Statistically Valid No.
View of Responsible
Officials Management at the Mississippi Division of Medicaid did not concur with this
finding. See additional comments in the Corrective Action Plan on page 326 of
this audit report; and the Auditor’s Response to the Corrective Action
Plan at page 136 and 330.
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Division of Medicaid (MDOM)
Management
Division of Medicaid — Eligibility - Material Weakness/Material Noncompliance
2021-041 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the
Medical Assistance Program and the Children’s Health Insurance Program (CHIP)
This finding is a repeat finding for MDOM since the Fiscal Year 2019 Single Audit. MDOM’s State Plan
requires the verification of all income for MAGI-based eligibility determinations, and, as stated in the
finding, MDOM’s Eligibility Policy and Procedure Manual requires the use of an individual’s most recent
tax return to verify self-employment income. In multiple instances, applicants either misreported self-
employment income or failed to report self-employment income. MDOM’s failure to adequately capture
and verify self-employment income led to 9 instances were individuals who may not have been eligible to
receive benefits were awarded benefits. In a similar case reported in last year’s audit, two individuals
fraudulently applied for and received Medicaid benefits, namely by concealing self-employment income
on their tax returns. These instances resulted in over $70,000 in unentitled benefits being paid. In order to
attempt to reduce ineligible individuals from receiving benefits, MDOM should strengthen their controls
and perform due diligence to ensure that self-employment income is properly verified. MDOM repeatedly
states that they do not have access to state tax return information; however, their own policy states that they
will use tax return data to verify self-employment income.
As explained to MDOM by auditors, the questioned costs remained even though MDOM was unable to
remove individuals from the program due to COVID-19. The auditor asserts that, if MDOM had performed
proper due diligence when initially evaluating these individuals, they may have never been accepted into
the program; therefore, the questioned costs remain. The auditor concurs that OSA is not able to know the
recipients were actually ineligible; conversely, MDOM is not able to know the recipients are actually
eligible due to their own failed compliance with policies. Eligibility for these individuals is, at best,
questionable, which is why the payments made are questioned costs.
Additionally, MDOM stated that they do not concur with the section of the finding regarding MDES
verifications. To date MDOM has offered no documentation to support their assertion that these individuals
were verified through the MDES system.
Division of Medicaid — Special Tests & Provisions — Provider Eligibility - Material
Weakness/Material Noncompliance
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
135
2021-042 Strengthen Controls to Ensure Compliance with Provider Eligibility Requirements
of the Children’s Health Insurance Program (CHIP)
In the corrective action plan, MDOM states “MDOM requires the MCO to conduct screenings of all
providers; however, the MCO may delegate provider credentialing activities, which includes provider
screening.” As noted in the finding, Molina delegates credentialing and allows providers to “credential
themselves”. The Medicaid Provider Enrollment Compendium (MPEC) states that allowing managed care
organizations to delegate provider credentialing activities to allow providers to “credential themselves” is
not in compliance with 42 CFR 455. This arrangement creates a conflict of interest and does not allow the
MDOM to maintain appropriate oversite.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
136
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. DEPARTMENT OF HOMELAND SECURITY
Finding Number Finding and Recommendation
DEPARTMENT OF EMPLOYMENT SECURITY
REPORTING
Material Weakness
Material Noncompliance
2021- 028 Strengthen Controls to Ensure Compliance with Reporting Requirements for Lost
Wages Assistance.
ALN Number 97.050 — Lost Wages Assistance
Federal Award No. 4528DRMSSPLW
Pass-through Entity N/A
Questioned Costs N/A
Criteria Per the Federal Emergency Management Agency (FEMA) Commonly Asked
Questions of the SF-425 report, the Basis of Accounting, Cash or Accrual, should
be selected based on the type of accounting that is used. Per this guideline,
“Accrual basis of accounting refers to the accounting method in which expenses
are recorded when incurred” and “Cash basis of accounting refers to the accounting
method in which expenses are recorded when they are paid”.
Per the FEMA Lost Wages Supplemental Payment Assistance Guidelines, the
Quarter ending December 31 report is due January 30.
Per the FEMA Commonly Asked Questions of the SF-425 report, “Total Recipient
Share Required is based on the amount of lost wages benefits and administrative
costs spent, this question asks the recipient to enter the total cost-share required for
these purchases. This amount should not include cost sharing and match amounts
in excess of the amount required by the Federal agency for the cost share.”
Per the Supplemental Payments for Lost Wages guidance, “Upon receiving
approval and an initial grant award, state and territories will be required to submit
weekly reports to FEMA”. The weekly requirement additionally states “Lost
Wages Weekly Report should have been provided to FEMA and are required until
all claims were paid”.
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — Dept of Homeland Security (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specifies that a satisfactory control environment is only
effective when control activities exist. This includes but is not limited to the review
process of transactions, proper support of transactions, proper documentation and
support of methodologies used in accounting practices, proper support of
information and communication within the agency, and a commitment to
competence by management.
During review of the reporting requirements for the Lost Wages Assistance
program, the auditor noted the following:
e Quarterly Reports were not completed accurately. More specifically the
following issues were noted:
o The basis of accounting was incorrectly documented as cash, however the
agency actually used accrual basis for recording appropriate amounts. This
issue was determined when the January expenditures were included on the
December report. January expenditures being included is acceptable if the
agency is using accrual basis due to this report not being submitted until
February 12, 2021;
o The December quarter ending report was not submitted timely, it was
submitted 12 days later than required; and
o The Total Recipient Share Required was inconsistently calculated on the
two quarterly reports examined. Specifically the December quarter ending
report used 25 percent of the “total federal funds authorized” reported and
March quarter ending report used 25 percent of the budgeted “other”
amount on the cumulative budget provided by the agency.
e There were ten instances out of 44 (23%) in which a required weekly report
was not submitted to FEMA.
The Mississippi Department of Employment Security lacks proper internal
controls over reporting requirements.
Lack of effective internal control over reporting can lead to untimely and
inaccurate reports provided to the federal awarding agency.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with reporting requirements for lost wages
assistance.
No.
Yes.
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — Dept of Homeland Security (continued)
View of Responsible
Officials
Management at the Mississippi Department of Employment Security concurs
with this finding. See additional comments in the Corrective Action Plan on
page 285 of this audit report.
Material Weakness
Material Noncompliance
2021- 029
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
Strengthen Controls to Ensure Proper Review over the Schedule of Expenditures
of Federal Awards.
17.225 — Unemployment Insurance
97.050 — Lost Wages Assistance
UI-34724-20-55-A-28
4528DRMSSPLW
N/A
N/A
The Code of Federal Regulations 2 CFR 200.508(b) states, “Prepare appropriate
financial statements, including the schedule of expenditures of Federal awards in
accordance with § 200.510.”
The Code of Federal Regulations 2 CFR 200.510(b) states, the auditee must also
prepare a schedule of expenditures of Federal awards for the period covered by the
auditee's financial statements which must include the total Federal awards
expended as determined in accordance with § 200.502”
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that a review is performed to verify the accuracy and
completeness of financial information reported. The Schedule of Expenditures of
Federal Awards contains information such as Assistance Listing Numbers (ALN)
and grant identification numbers that must be properly and accurately recorded.
During the review of the schedule of expenditures of federal awards for the
Mississippi Department of Employment Security, the auditor noted that the agency
incorrectly reported Lost Wages Assistance (ALN 97.050) financial activity as
Unemployment Insurance (ALN 17.225). The agency incorrectly classified the
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — Dept of Homeland Security (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
revenue and expenditures of nearly $250,000,000 for the Lost Wages Assistance
program on the schedule of expenditures of federal awards in the 8819100000 and
5820167100 fund.
The agency did not possess or enforce proper internal control structures.
Additionally, the agency did not properly review and reconcile the schedule of
expenditures of federal awards information and did not perform review over
crucial aspects of financial reporting.
Failure to properly ensure federal grant activity, including revenue and
expenditures, are properly recorded on the agencies Schedule of Expenditures of
Federal Awards could result in reporting errors in the State’s Master Schedule of
Expenditures of Federal Awards and/or exclusion of major programs to be audited
on the State’s Single Audit Report.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure proper review over the schedule of expenditures of federal
awards.
No.
Yes.
Management at the Mississippi Department of Employment Security concurs
with this finding. See additional comments in the Corrective Action Plan on
page 285 of this audit report
140
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. DEPARTMENT OF LABOR
Finding Number Finding and Recommendation
DEPARTMENT OF EMPLOYMENT SECURITY
ELIGIBILITY
Material Weakness
Material Noncompliance
2021-015 Strengthen Controls to Ensure Compliance with Eligibility Requirements for
Unemployment Insurance.
ALN Number 17.225 — Unemployment Insurance
Federal Award No. CARES Act, 2020 and 2021
UI-34173-20-55-A-28
UI-34067-20-55-A-28
Pass-through Entity N/A
Questioned Costs $62,434,776
Criteria The Mississippi State Code Annotated (1972) $71-5-511 states that one is eligible
to receive benefits that “has been unemployed for a waiting period of one (1)
week”; “participates in reemployment services, such as job search assistance
services, if, in accordance with a profiling system established by the department,
it has been determined that he is likely to exhaust regular benefits and needs
reemployment services”; “is able to work, available for work and actively seeking
The Mississippi State Code Annotated §71-5-505(1) states “For weeks beginning
on or after July 1, 1991, each eligible individual who is totally unemployed or part
totally unemployed in any week shall be paid with respect to such week a benefit
in an amount equal to his weekly benefit amount less that part of his wages, if any,
payable to him with respect to such week which is in excess of Forty Dollars
($40.00).”
The Mississippi State Code Annotated §71-5-513 describes reason for separation
that disqualifies the individual as “(a) For the week, or fraction thereof, which
immediately follows the day on which he left work voluntarily without good cause,
if so found by the department, and for each week thereafter until he has earned
remuneration for personal services performed for an employer, as in this chapter
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
defined, equal to not less than eight (8) times his weekly benefit amount, as
determined in each case; however, marital, filial and domestic circumstances and
obligations shall not be deemed good cause within the meaning of this subsection.
Pregnancy shall not be deemed to be a marital, filial or domestic circumstance for
the purpose of this subsection. (b) For the week, or fraction thereof, which
immediately follows the day on which he was discharged for misconduct
connected with his work, if so found by the department, and for each week
thereafter until he has earned remuneration for personal services performed for an
employer, as in this chapter defined, equal to not less than eight (8) times his
weekly benefit amount, as determined in each case. (c) The burden of proof of
good cause for leaving work shall be on the claimant, and the burden of proof of
misconduct shall be on the employer.”
Unemployment Insurance Program Letter (UIPL) Number 13-20, Change 1,
Attachment 1, Question 2 states that a state must demonstrate steps it has taken or
will take to implement three elements, including (1) suspending the waiting week,
(ii) modifying or suspending the work search requirements, and (iii) non-charging
employers. For each of the three elements, the minimum requirement is to modify,
suspend, or waive for individuals or employers directly impacted by COVID-
19 due to an illness in the workplace or direction from a public health official
to isolate or quarantine workers (emphasis added by auditor).
Unemployment Insurance Program Letter (UIPL) Number 28-20 states that the
Department of Labor (DOL) included program integrity language in all of the
major pieces of guidance associated with the state implementation of the CARES
Act programs and provisions. Unemployment Insurance Program Letter 13-20
states that program Integrity requirements for the regular unemployment program
and unemployment programs authorized by the CARES Act were to operate in
tandem, and CARES Act program requires that states must ensure that only eligible
individuals receive benefits. Both UIPL letters 73-20 and 28-20 specify that the
states must make efforts to rapidly and proactively prevent, detect, and investigate
fraudulent activity; establish and recover fraud overpayments; and pursue criminal
and civil prosecution to deter fraud. Specifically, states were strongly encouraged
to implement the following measures to minimize fraud in the unemployment
system:
1) Social Security Administration Cross Match
2) Systematic Alien Verification for Entitlement
3) Incarceration Cross Matches
4) Internet Protocol Address Checks
5) Data Analytics to cross reference claims for indicators of fraud.
Unemployment Insurance Program Letter (UIPL) Number 10-20 states that DOL
has a longstanding legal interpretation of federal unemployment law that
“unemployment” includes a reduction of both work hours and earnings; therefore,
an individual who is not working, but has not experienced a reduction in income
(including earnings, paid sick leave, and paid family leave), is not eligible to
receive unemployment benefits.
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Section 4.b. of UIPL No. 14-20, Trade Readjustment Assistance (TRA) is payable
to eligible claimants after exhaustion of Unemployment Insurance (UI) benefits,
which include (1) regular UI under state law; (2) Extended Benefits (EB); (3)
Pandemic Unemployment Assistance (PUA); (4) Pandemic Emergency
Unemployment Compensation (PEUC). Also, Per Section 3.a.v of UIPL No. 16-
20, Change 4, Continued Assistance Act “adding a requirement for individuals to
submit documentation of employment or self-employment”. This requirement
applies for all individuals receiving Pandemic Unemployment Assistance payment
after December 27, 2020.
States must provide individual notification to claimants about provisions of the
Continued Assistance for Unemployed Workers Act of 2020 (Continued
Assistance Act). This includes changes to program dates and benefit levels for the
Pandemic Emergency Unemployment Compensation (PEUC), PUA, and Federal
Pandemic Unemployment Compensation (FPUC) programs, as well as the creation
of the Mixed Earners Unemployment Compensation (MEUC) program.
Per Section 4.b.i.D of UIPL No. 16-20, Change 5, "the state could provide an
option for the individual to select 'None of the above.’ However, if the individual
self-certifies that none of the COVID-19 related reasons apply, the individual will
be denied for the week in question because they no longer meet the eligibility
requirement for PUA and the state must issue a written, appealable determination.”
Per Section 4.a of UIPL No. 16-20, “PUA provides benefits to covered individuals,
who are those individuals not eligible for regular unemployment compensation or
extended benefits under state or Federal law or PEUC, including those who have
exhausted all rights to such benefits.”
Per Section D.1 of Attachment I to UIPL No. 15-20, “The state must notify a
potentially eligible individual of his or her entitlement to FPUC. Such notification
should include both the beginning and ending dates for the FPUC program.”
The Code of Federal Regulations 2 CFR 200.303 requires that 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. These internal controls should be in
compliance with guidance in ‘Standards for Internal Control in the Federal
Government’ issued by the Comptroller General of the United States or the
Internal Control — Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) specifies that a
satisfactory control environment is only effective when control activities, such as
authorization, approval, verification, and adherence to policy, procedures, and
regulations are implemented and followed. These activities are essential to
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Condition
minimizing the risk of fictitious claims and misstated financial position.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted by the
federal government in response to the COVID-19 pandemic required state
unemployment agencies to increase the amount of benefits paid to claimants.
Additionally, claimants were able to collect unemployment payments for an
expanded time frame, and claimants who would otherwise not qualify for benefits
(such as independent contractors and self-employment persons) were able to
qualify for benefits. In order to process the multitude of claims in an expeditious
manner, the Mississippi Department of Employment Security (MDES) opted to
override the existing controls designed in the internal control system. Proven and
tested controls over Unemployment Insurance claims were altered or disregarded
for the periods of March 2020 through December 2020. MDES did not implement
any compensating controls or additional verifications to ensure that the override of
controls would not adversely affect claims paid. By overriding and disregarding
controls, MDES did not adequately safeguard the federal program against fraud,
waste, and abuse. Controls altered for the claims submitted in the noted
timeframes were:
e Waived; One week waiting period; March 8, 2020 — December 26, 2020;
e Waived; Work Search Requirements; March 8, 2020 — August 8, 2020;
e Waived; Able to work, Available to work, and Actively Seeking Work
(A&A); March 8, 2020 — September 26, 2020;
e Altered; Weekly Earning Allowance increased from $40 to $200; May 3,
2020 — September 26, 2020; and
e Altered; Reason for separation from ALL employers in base period
changed to separation from MOST RECENT employer; March 8, 2020 -
September 26, 2020.
Due to these controls being ignored or overridden, MDES was unable to properly
monitor the immense influx of claims and to properly vet those claims for fraud.
During fiscal year 2021, total unemployment benefit claims increased from
$2,146,060,996 (fiscal year 2020) to $2,475,899,125 (fiscal year 2021), a 15%
increase. Overpayments of benefits was noted to increase from $117,948,403
(fiscal year 2020) to $473,787,010 (fiscal year 2021), a 301% increase. These
payments include:
Payments made to individuals who never lost or had a reduction in wages;
Fraudulent payments due to stolen identity;
Payments made to incarcerated individuals; and
Payments made due to international unemployment fraud.
In particular, MDES inadvertently allowed incarcerated individuals to receive
payment when the control that required claimants to verify that they were “actively
seeking work” was waived. Incarcerated individuals were then able to apply for
benefits and receive approval without any additional verification from MDES.
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
MDES personnel were initially overwhelmed by the influx of claims and were
unable to accurately report the amount of increased loss the State was subject too,
and were unable to adequately monitor the fraud that was reported by individuals
when they received notification of benefits received.
MDES personnel were initially overwhelmed by the influx of claims and were
unable to accurately report the amount of increased loss the State was subject too,
and were unable to adequately monitor the fraud that was reported by individuals
when they received notification of benefits received.
Federal guidance that required the easing of pre-pandemic conditions for receiving
unemployment state that the State is required to implement the minimum
requirements to modify, suspend, or waive for individuals or employers directly
impacted by COVID-19 due to an illness in the workplace or direction from a
public health official to isolate or quarantine workers; however, MDES chose to
waive or suspend requirements for the waiting week, work search requirements,
and non-charging employees as additional measures. During testing of UI benefits
paid during fiscal year 2021, the auditor tested 60 recipients and noted that
individuals applying for unemployment during the pandemic were indeed not
subject to work search requirements, or the waiting week for benefits.
Additionally, auditor noted the following:
e For DUA Claims the following occurred:
o Five instances in which work search requirements were waived
for Compensable Week Ending (CWE) between March 8, 2020
and August 8, 2020; resulting in questioned costs of $497.
o Four instances in which work search result was not submitted
along with the weekly certificates for the CWE after August 8,
2020; resulting in questioned costs of $391.
Total actual questioned costs - $888
Total projected questioned costs - $8,427
e For PUA Claims the following occurred:
o Due to controls being turned off from March 8, 2020 to August 8,
2020, all PUA claims during that period, totaling $62,432,862, are
being questioned.
© Five instances in which work search results were not submitted
along with the weekly certificates for CWE after August 8, 2020;
resulting in questioned costs of $708.
It was also noted that two of these five claims also resulted in
duplicate PUA payments for the same week. The costs associated
with this are included in the above amount.
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Cause
o One instance that when the PUA claimant self-certified that “none
of the COVID-19 related reasons apply’, the claimant was still
paid for the compensable week ending which resulted in
questioned costs of $106 for PUA benefits;
o One instance in which the “Notice for Proof of Employment” was
not generated for PUA claimant who received a payment of $106
after December 27, 2020;
o One instance that a PUA Claimant was not registered with WIN
Job Center and benefits were paid resulting in questioned costs of
$106;
o One instance in which a PUA claimant instead should have been
receiving PEUC benefits for the CWE; while the claimant should
have received the benefits from a different program, it did not
increase the costs overall.
Total actual questioned costs - $62,432,862
Total projected questioned costs - $86,735,470
e For Trade Readjustment Allowance (TRA) Benefits, there was one claim
payment paid before extended benefits were exhausted; this however did
not result in questioned costs.
e For PEUC Benefits, there was one instance in which there was no
notification to the claimant of program dates/benefit level changes for their
PEUC benefits, this did not result in questioned costs.
e Six instances in which FPUC benefit determination notices were not
generated by the system and sent to the claimant; while the notification
was not sent, the claim payment amounts were not affected, therefore no
questioned costs.
Regardless of the federal requirements or Executive Orders issued, MDES is still
responsible for ensuring the accuracy of unemployment claims. In order to assure
the accuracy of those claims, MDES should have implemented compensating
controls to safeguard the unemployment trust fund when other controls were
waived or overrode. MDES personnel bore the ultimate responsibility to ensure
that unemployment payments were accurately paid out and that overpayments
were kept to a minimum.
Agency was overwhelmed by COVID-19 pandemic and policies and procedures
for Eligibility determinations were not followed.
MDES did not have proper internal controls in place due to overriding or waiving
existing controls. This caused MDES the inability to verify that unemployment
claims were paid to proper claimants.
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Failure to properly enable controls and follow policies and procedures increases
the risk of fraud and misappropriation of liabilities, which can result in material
misstatements of financial statements. Failure to maintain supporting
documentation for eligibility determination could result in questioned costs and
recoupment of costs by the federal granting agency.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with eligibility requirements for unemployment
insurance. Management should continue to review, monitor and enhance eligibility
procedures to detect and prevent improper and fraudulent payments.
Yes, 2020-036.
Yes.
Management at the Mississippi Department of Employment Security does not
concur with this finding. See additional comments in the Corrective Action Plan
on page 278 of this audit report; and the Auditor's Response to the Corrective
Action plan on page 160 and 288.
MATCHING, LEVEL OF EFFORT, EARMARKING
Material Weakness
Material Noncompliance
2021-022
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Matching Requirements for
Unemployment Insurance.
17.225 — Unemployment Insurance
UI-34724-20-55-A-28
N/A
$935,077
The Families First Coronavirus Response Act (Pub. L. 116-127), in Division D of
the Emergency Unemployment Insurance Stabilization and Access Act of 2020
(EUISAA), temporarily provides for 100% Federal funding of sharable extended
benefits (EB) payments through December 31, 2020 for states that receive
Allotment I and II of the emergency administrative grants, as discussed in
Unemployment Insurance Program Letter (UIPL) No. 13-20. States are
reminded that Section 204(a) (3), Extended Unemployment Compensation Act
(EUCA), prohibits Federal sharing for EB attributable to employment with state
and local governments or Federally-recognized Indian tribes. This prohibition does
147
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
not apply to EB attributable to employment with 501(c) (3) nonprofit
organizations.
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate an agency should appropriately update program rules to meet
federal program guidelines.
During review of matching contributions and EB in relation to unemployment
insurance, it was noted that the Mississippi Department of Employment Security
(MDES) treated all EB claims as fully federally funded. Per discussion with MDES
personnel, the agency specifically stated that they inadvertently programmed all
employer accounts to qualify for federal sharing to extended benefits. This allowed
local and state government entities and federally recognized Indian Tribes to
qualify for extended benefits, however this was prohibited per federal guidelines.
The auditor reviewed a listing of local and state government entities and federally
recognized Indian tribes that received extended benefits and specifically verified
that six of these entities did in fact receive extended benefits that should have been
prohibited. The auditor verified the total of benefits paid to these excluded entities
and it totaled $935,077.
MDES inadvertently programmed all employer accounts to qualify for federal
sharing of Extended Benefits including the local and state government entities and
federally recognized Indian Tribes.
Prohibited entities, including state and local governments and federally recognized
Indian tribes, were allowed to receive federal funds in relation to extended benefits.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with matching requirements for unemployment
insurance.
No.
Yes.
Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 280
of this audit report
148
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
PERIOD OF PERFORMANCE
Material Weakness
Material Noncompliance
2021-023
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
Strengthen Controls to Ensure Compliance with Period of Performance
Requirements for Unemployment Insurance.
17.225 — Unemployment Insurance
UI-34724-20-55-A-28
N/A
$47,701
The start and end date of extended benefits (EB) are paid based on statutory
triggers from trigger notice number 2020-18 and 2020-48 respectively. For
Mississippi, EB was triggered on for compensable week ending (CWE) May 24,
2020 and off for CWE December 19, 2020.
Per the Federal Emergency Management Agency (FEMA) Declaration DR-4536-
MS the funding period for Disaster Unemployment Assistance (DUA) generally
covers a 26-week period after the declaration has been declared. The starting CWE
was April 25, 2020 and the ending date was October 17, 2020.
The Department of Labor UIPL Number 14-21 provides references for the period
of performance for Pandemic Unemployment Assistance (PUA), Pandemic
Emergency Unemployment Compensation (PEUC), and Federal Pandemic
Unemployment Compensation (FPUC). Specifically in regards to the conditions
listed above, PEUC began week ending April 4, 2020 and ended week ending
September 4, 2021. Also, FPUC began week ending April 4, 2020 and ended week
ending July 25, 2020.
The Internal Control - Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) specifies that a
satisfactory control environment is only effective when control activities ensure
payments are only made during appropriate time periods.
During review of benefit payments at the Mississippi Department of Employment
Security, the auditor noted the following instance of noncompliance with period of
performance:
e 240 instances totaling $38,589, in which EB were paid for a CWE after
the eligibility period of December 19, 2020,
e 27 instances totaling $2,862, in which Disaster Unemployment Assistance
(DUA) benefits were paid for CWE’s that were outside of the Disaster
Assistance Period which is the 26 weeks that began with the first day of
149
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
the week following the date the major disaster was declared by the
President,
e 93 instances totaling $6,162, in which PEUC was paid for CWE’s before
the eligibility period which began for week ending April 4, 2020, and
e Four instances totaling $88 in which FPUC benefits were paid for CWEs
before the eligibility period which began week ending April 4, 2020.
The Mississippi Department of Employment security did not properly program the
ReEmployment system to reflect the correct dates or periods of performance for
unemployment benefits.
The failure to establish internal controls enabled material noncompliance to go
undetected resulting in payments being made for benefits prior to and after the
correct period of performance.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with period of performance requirements for
unemployment insurance.
No.
Yes.
Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 282
of this audit report
REPORTING
Material Weakness
Material Noncompliance
2021-029
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Strengthen Controls to Ensure Proper Review over the Schedule of Expenditures
of Federal Awards.
17.225 — Unemployment Insurance
UI-34724-20-55-A-28
4528DRMSSPLW
N/A
N/A
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Criteria
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
The Code of Federal Regulations 2 CFR 200.508(b) states, “Prepare appropriate
financial statements, including the schedule of expenditures of Federal awards in
accordance with § 200.510.”
The Code of Federal Regulations 2 CFR 200.510(b) states, the auditee must also
prepare a schedule of expenditures of Federal awards for the period covered by the
auditee's financial statements which must include the total Federal awards
expended as determined in accordance with § 200.502”
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that a review is performed to verify the accuracy and
completeness of financial information reported. The Schedule of Expenditures of
Federal Awards contains information such as Assistance Listing Numbers (ALN)
and grant identification numbers that must be properly and accurately recorded.
During the review of the schedule of expenditures of federal awards for the
Mississippi Department of Employment Security, the auditor noted that the agency
incorrectly reported Lost Wages Assistance (ALN 97.050) financial activity as
Unemployment Insurance (ALN 17.225). The agency incorrectly classified the
revenue and expenditures of nearly $250,000,000 for the Lost Wages Assistance
program on the schedule of expenditures of federal awards in the 8819100000 and
5820167100 fund.
The agency did not possess or enforce proper internal control structures.
Additionally, the agency did not properly review and reconcile the schedule of
expenditures of federal awards information and did not perform review over
crucial aspects of financial reporting.
Failure to properly ensure federal grant activity, including revenue and
expenditures, are properly recorded on the agencies Schedule of Expenditures of
Federal Awards could result in reporting errors in the State’s Master Schedule of
Expenditures of Federal Awards and/or exclusion of major programs to be audited
on the State’s Single Audit Report.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure proper review over the schedule of expenditures of federal
awards.
No.
Yes.
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
View of Responsible
Officials
Material Weakness
Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 285
of this audit report
Immaterial Noncompliance
2021-026
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Reporting Requirements for
Unemployment Insurance.
17.225 — Unemployment Insurance
UI-34724-20-55-A-28
N/A
N/A
The Code of Federal Regulations 2 CFR 200.302 states each state must expend
and account for the Federal award in accordance with state laws and procedures
for expending and accounting for the state's own funds. In addition, the state's and
the other non-Federal entity's financial management systems, including records
documenting compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award, must be sufficient to permit the preparation of
reports required by general and program-specific terms and conditions; and the
tracing of funds to a level of expenditures adequate to establish that such funds
have been used according to the Federal statutes, regulations, and the terms and
conditions of the Federal award.
Per the UI Reports Handbook No. 401, The Agency is required to submit quarterly
ETA 191 reports. The ETA 191 is due by the 25th of the month following the close
of the quarter.
The Agency is required to submit monthly ETA 2112 report. Per the UI Reports
Handbook No. 401 the ETA 2112 is due the Ist day of the second month following
the month of reference. The handbook also notes that all funds deposited into,
transferred, or paid from the state unemployment fund (the state clearing account,
the state account in the UTF, and the state benefit payment account) should be
reflected on the ETA 2112 except for payments/benefits paid under the Alternative
Trade Adjustment Assistance (ATAA) and Trade Adjustment Assistance (TAA)
programs.
The Agency is also required to submit monthly ETA 9050, 9052 and 9055 reports.
Per the UI Reports Handbook No. 401, the ETA 9050, 9052 and 9055 reports are
due on the 20th of the month following the month to which the data relates.
152
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that proper review and approval procedures should be in place to
ensure accuracy and reliability of reports submitted by the agency.
Condition The Mississippi Department of Employment Security is required to submit various
reports to federal awarding entities. Upon testing, the following issues were noted:
e During review of two ETA-191 reports for the quarters ending September
2020 and June 2021, the following issues were noted:
o No evidence of written supervisory approval could be provided
for the reports; and
o Supporting documents could not be provided for the adjustment
amounts on the penalties and interest.
e During review of eight monthly ETA 2112 reports, auditors noted:
o Pandemic Unemployment Assistance (PUA) disbursements were
understated by $12,228,112 in the June 2021 report; and
o Transfers from the Federal Unemployment Account (FUA) were
not reported on line 15 in four reports tested for the months of
August 2020, and March, May, and June 2021.
e During review of 12 Performance Reports the following issues were noted:
o There was no written supervisory approval before submission of
four ETA-9050 reports, four ETA-9052 reports, and four ETA-
9055 reports;
o The data submitted for one ETA-9050 failed to pass the
Department of Labor’s data validation program for fiscal year
2021; and
o One ETA-9052 report for the month of November was not
submitted timely. The report was due December 20, 2020 and it
was not submitted until February 9, 2021, which is 51 days late.
Cause The Mississippi Department of Employment Security lacks adequate review
procedures and proper internal controls over reporting requirements.
Effect Without proper review and approval, reports could be inaccurate and incomplete
which could result in improper funding by the federal entity.
Recommendation We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with reporting requirements for unemployment
insurance and implement effective internal review and approval procedures to
ensure reports are submitted accurately and timely to the Department of Labor.
153
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Repeat Finding
Statistically Valid
View of Responsible
No.
Yes.
Officials Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 283 of this
audit report
SPECIAL TESTS AND PROVISIONS — BENEFIT PAYMENTS
Material Weakness
Material Noncompliance
2021-024
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Special Tests — Benefit Payments
Requirements for Unemployment Insurance.
17.225 — Unemployment Insurance
UI-34724-20-55-A-28
N/A
N/A
As stated in the Employment and Training Handbook No. 395, 5" Edition: Section
13: Completion of Cases and Timely Data Entry, Prompt completion of
investigations is important to ensure the integrity of the information being
collected by questioning claimant and employers before the passage of time
adversely affects recollections. Prompt entry of associated data is necessary for
both the State Workforce Agency and the Department of Labor to maintain current
databases.
Therefore, the following time limits are established for completion of all cases for
the year. (The "year" includes all batches of weeks ending in the calendar year.):
e aminimum of 70 percent of cases must be completed within 60 days of
the week ending date of the batch, and 95 percent of cases must be
completed within 90 days of the week ending date of the batch; and
e aminimum of 98 percent of cases for the year must be completed within
120 days of the ending date of the calendar year.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
154
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
activities dictate that case investigations should be timely in order to ensure
accuracy and reliability.
During review of the Benefits Accuracy Measurement (BAM) Program, the
auditor determined that the Mississippi Department of Employment Security
(MDES) was not meeting the timeliness requirement for the BAM unit’s
performance in investigating BAM paid cases. It was specifically noted that there
were ten instances in which paid case investigations were not completed within the
60 day time requirement. Further investigation of the full population resulted in
the agency not meeting the 70 percent of cases (230 out of 496, or 46%)
investigations being completed within 60 days, nor the 95 percent of cases (371
out of 496, or 75%) investigated and completed within 90 days.
Due to the increased demand during the COVID-19 Pandemic, BAM investigative
staff were reassigned to other departments for additional assistance, which caused
MDES personnel to be unable to meet the timeliness requirement for investigated
case completion.
Failure to follow federal quality control guidelines may result in a decrease and/or
loss of federal funds.
We recommended the Mississippi Department of Employment Security strengthen
controls to ensure compliance with special tests — benefit payments requirements
for unemployment insurance. These internal controls should ensure that Benefits
Accuracy Measurement (BAM) Program Case investigations are completed in a
timely manner.
No.
Yes.
Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 282
of this audit report.
SPECIAL TESTS AND PROVISIONS - OVERPAYMENTS
Material Weakness
Material Noncompliance
2021-025
ALN Number
Strengthen Controls to Ensure Compliance with Special Tests — Program Integrity-
Overpayments Requirements for Unemployment Insurance.
17.225 — Unemployment Insurance
155
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
Cause
Effect
UI-34724-20-55-A-28
N/A
$633,222
As stated in the Attachment I to Unemployment Insurance Program Letter
(UIPL) No. 16-20 Change I, Pandemic Unemployment Assistance (PUA)
payments must be reduced to recover overpayments for other states if the state has
signed the Interstate Reciprocal Overpayment Recovery Arrangement (IRORA)
agreement. However, the state may not offset more than 50 percent from the PUA
payment to recover overpayments for other programs.
As stated in the Attachment I to UIPL No. 17-20, Change I, The state may not
offset more than 50 percent from the Pandemic Emergency Unemployment
Compensation (PEUC) payment to recover an overpayment.
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate agencies should correctly program systems to comply with federal
guidelines.
During testing performed on overpayments, the auditor noted that the Mississippi
Department of Employment Security had incorrect offset percentages setup in
ReEmployMS to recover overpayments. The agency was incorrectly recovering
overpayments by offsetting PUA and PEUC with other benefit programs.
Specifically the agency used:
e PUA benefit payments to offset 100% of overpayments that occurred from
Mixed Earners Unemployment Compensation program (MEUC) and
Federal Pandemic Unemployment Compensation (FPUC) benefits; and
e PEUC benefit payments to offset 100% of overpayments that occurred
from PUA, MEUC, FPUC, Regular Unemployment Insurance, and
Extended Benefit overpayments.
This resulted in questioned costs of $633,222.
The agency programmed the ReEmployMS system using incorrect offset
percentages and did not take into consideration that they could not take more than
50 percent of the benefit payments from claimants when recovering overpayments.
The claimant may not receive the appropriate amount of PUA and PEUC benefits
if the agency uses incorrect offset percentages to recover overpayments from the
previously mentioned unemployment programs.
156
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
We recommended the Mississippi Department of Employment Security strengthen
controls to ensure compliance with special tests — program integrity-overpayments
requirements for unemployment insurance.
No.
Yes.
Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 282
of this audit report
SPECIAL TESTS — EMPLOYER EXPERIENCE RATING
Material Weakness
Immaterial Noncompliance
2021-027
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Special Tests — Employer
Experience Rating Requirements for Unemployment Insurance.
17.225 — Unemployment Insurance
UI-34724-20-55-A-28
N/A
N/A
The Families First Coronavirus Response Act (enacted March 18, 2020), provides
that, in the context of COVID-19, states have the flexibility of determining whether
Unemployment Insurance benefits that are not federally funded will be charged to
employer accounts for experience rating purposes and should consider how to
fairly distribute these costs to employers.
In response to the Families First Coronavirus Response Act, on July 7, 2020, the
Mississippi State Legislature enacted SB 3051 which created special provisions
for both the general and individual experience rates for calendar year 2021 to
address the effects of the COVID-19 pandemic. This legislation allowed for the
following:
e Mississippi to set the general experience rate for 2021 to 0%;
e Excluding the charges attributed to each employer's individual experience
rate for the period March 8, 2020, through June 30, 2020, from the
employer's individual experience rate calculations for purposes of
calculating the total unemployment insurance rate for 2021 as well as
excluding these charges for calendar years 2022 and 2023; and,
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Labor (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
e Excluding the charges attributed to each employer's individual experience
rate for the period July 1, 2020, through December 31, 2020, from the
employer's individual experience rate calculations for purposes of
calculating the total unemployment insurance rate for 2022 as well as
excluding these charges for calendar years 2023 and 2024.
The Internal Control — Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that satisfactory control activities should exist
to ensure an effective internal control system exists. Effective internal controls
should be in place to ensure accurate calculations occur for employer experience
rating.
While testing the employer experience benefit rating, there were four instances in
which benefits charged to employer accounts were inadvertently excluded when
calculating the 2021 employer experience rate. Specifically, the agency included
these weeks as part of the noncharging weeks that should have begun after March
8, 2020. Noncharging weeks began after March 8, 2020, however the agency
inadvertently included certain charges during the second quarter of 2020 as
noncharging as well.
Certain claims with effective dates between the PUA program effective date of
February 2, 2020, and Executive Order 1462 waiting period waiver date of March
8, 2020, were waived. These waived weeks were therefore incorrectly non-charged
to the employer.
Including benefits paid for compensable weeks ending before March 8, 2020 in
non-charging benefit will cause the employer’s individual experience rating for
2021 to be incorrectly lower than it should be and therefore reduce some employers
contributions to the unemployment insurance Trust Fund and decreases the
unemployment insurance trust fund balances.
We recommended the Mississippi Department of Employment Security strengthen
controls to ensure compliance with special tests — employer experience rating
requirements for unemployment insurance.
No.
Yes.
Management at the Mississippi Department of Employment Security concurs with
this finding. See additional comments in the Corrective Action Plan on page 284
of this audit report.
158
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Employment
Security (MDES) Management
Department of Employment Security — Activities Allowed/Allowable Costs - Material
Weakness/Material Noncompliance
2021-043 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities
Allowed for Coronavirus Relief Funds
Much of MDES’ argument that the questioned costs should be removed relies on Mississippi State Law
and disregards the requirements of the federal CRF grant. MDES asserts in their response that, because the
MS Legislature appropriated money to specific types of workforce development, that those expenditure
automatically became eligible for CRF funding. While the MS Legislature has the authority to appropriate
CRF money to certain types of workforce development, those items still must have met the three allowable
cost requirements of the CRF funds. State law authorizing equipment purchases cannot overrule the federal
program guidelines. MDES failed to document or perform adequate due diligence to ensure that the fixed
asset purchases made by their subrecipients met the grant requirements. These expenditures were not
properly justified with any cost comparison to ensure that the purchase was the most cost-effective solution.
Additionally, MDES could not provide any compelling evidence that these expenditures were necessary
due to the pandemic.
As stated in the finding, MDES could not provide documentation that the “student vouchers” paid for with
CRF monies were necessary due to the pandemic. MDES could not provide compelling evidence that these
students were new students, that they completed the courses, that the courses were able to benefit the
students in the workforce, or that they were even necessary due to the pandemic.
MDES’ assertion that extensive documentation has been provided to OSA to validate these purchases is
erroneous. MDES provided documentation to OSA, but that documentation did not support that the charges
were necessary or justified. The justifications for necessity in some instances was nonsensical, and did not
support that the purchases were necessary due to the pandemic. In the example noted by MDES in their
response, two lathes costing a total of $313,800 were purchased to assist with displaced internships. Those
two lathes served 22 students, for a per student price of $14,263. By fall of 2021, the internships had
resumed — meaning that the lathes were used for one semester. The college in question provided no
evidence that any other method of fulfilling the internships was considered, and no other options for a more
cost-effective solution rather than buying over $300,000 in fixed assets was contemplated. In a second
example given by MDES, the college purchased drones to assist in training drone pilots. MDES response
notes that drones are an emerging technology and that additional drone pilots will be needed by 2025;
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159
however, MDES does not provide any compelling justification as to why these drones and trained drone
pilots were necessary due to the pandemic.
Department of Employment Security - Eligibility - Material Weakness/Material
Noncompliance
2021-015 Strengthen Controls to Ensure Compliance with Eligibility Requirements for
Unemployment Insurance
The Office of the State Auditor (OSA) acknowledges that the Mississippi Department of Employment
Security (MDES) was faced with an unexpected and staggering task to ensure unemployment benefits were
paid to individuals during the pandemic. OSA also acknowledges that certain federal guidelines were
provided that MDES had to comply with in order to receive additional federal unemployment funds. While
MDES’ response to the finding focuses on the federal requirements and state guidance to waive or ignore
existing controls, MDES fails to identify any way that the agency mitigated any of the fraud risks or
potential for overpayments created by waiving or overriding these controls. This failure on the part of
MDES resulted in a 301% increase in known overpayments from fiscal year 2020 to 2021. This failure to
safeguard the state’s assets is the basis for the material weakness finding. Additionally, MDES fails to
acknowledge that the agency was required by the same type federal guidance referenced in their response
to the finding (UIPL Letters and Change Notices) to ensure adequate and proper fraud detection and
prevention techniques were being utilized by the agency.
Moreover, while MDES did receive federal guidance on making unemployment payments more accessible
to those directly impacted by the pandemic, the options provided by the federal government were to either
modify or suspend the work search requirements for individuals or employers directly impacted by COVID-
19 due to an illness in the workplace or direction from a public health official to isolate or quarantine
workers. States were also given the flexibility to respond to the COVID-19 emergency in a broader way,
if they chose to do so (emphasis added by auditor). (Unemployment Insurance Program Letter Number
13-20, Change 1, Attachment I, Question 2). MDES chose to suspend the requirement for all
unemployment claims, and not only those that arose from an illness in the workplace or from an order to
isolate or quarantine workers. The decision to implement broader flexibility and completely waive work
search requirements were made by MDES. By MDES’ own admission in other auditee responses to OSA,
MDES stated that they requested the Governor’s Office waive the specific requirements. Additionally, in
each Executive Order (1462, 1481, 1502, and 1510), MDES was given flexibility to reassess and modify
these measures prior to their expiration date in the orders.
Additionally, The Department of Labor (DOL) included program integrity language in all of the major
pieces of guidance associated with the state implementation of the CARES Act programs and provisions
(Unemployment Insurance Program Letter Number 28-20). Program Integrity requirements for the regular
unemployment program and unemployment programs authorized by the CARES Act were to operate in
tandem, and CARES Act program requires that states must ensure that only eligible individuals receive
benefits (Unemployment Insurance Program Letter Number 23-20). Both UIPL letters 23-20 and 28-20
specify that the states must make efforts to rapidly and proactively prevent, detect, and investigate
fraudulent activity; establish and recover fraud overpayments; and pursue criminal and civil prosecution to
deter fraud. Specifically, states were strongly encouraged to implement the following measures to minimize
fraud in the unemployment system:
1) Social Security Administration Cross Match
2) Systematic Alien Verification for Entitlement
3) Incarceration cross matches
4) Internet Protocol Address checks
5) Data Analytics to cross reference claims for indicators of fraud.
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160
Furthermore, many of the most effective tools to deter and detect fraud were available to MDES in the
Integrity Data Hub (IDH), and were available to states for well over a year. These included:
1) Interstate Suspicious Actor Repository to match claims across states
2) Foreign IP Address verification to receive flags on claims filed from IP addresses outside of
the United States
3) Data Analytic tools
4) Fraud Alert Systems
5) Identify Verification for fraud scoring information, including flagging synthetic identities.
MDES has stated that they utilize the IDH; however, auditors cannot determine how effectively these
programs were utilized considering the high amount of overpayments that were made during fiscal year
2021. Additionally, one of the specific fraud risks the UIPL, incarceration cross matches, were not
performed by MDES, and resulted in overpayments to incarcerated individuals. These incarcerated
individuals were able to apply for benefits when MDES overrode or turned off the automated controls and
did not implement any compensating controls to ensure payments were proper.
In summary, regardless of the federal requirements or Executive Orders issued, MDES is still responsible
for ensuring the accuracy of unemployment claims. In order to assure the accuracy of those claims, MDES
should have implemented compensating controls to safeguard the unemployment trust fund when other
controls were waived or overrode. The ultimate responsibility to ensure that unemployment payments were
accurately paid out and that overpayments were kept to a minimum is the responsibility of MDES personnel.
Department of Employment Security - Subrecipient Monitoring - Material
Weakness/Material Noncompliance
2021-045 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements
When documentation of pre-award risk assessments was requested during the audit process, MDES did not
provide any auditable documentation to the auditors. While MDES stated that they relied upon the same
pre-award risk assessment for the CRF grants as the Workforce Innovation and Opportunity Act (WIOA)
grants, none of the WIOA pre-award risk assessments were provided. Personnel at MDES stated, when
this documentation was requested, that “there was no risk assessment of the four local areas performed prior
to the awarding of the CRF funds...We work closely with the local areas on a daily basis, perform yearly
subrecipient monitoring, and regularly conduct technical assistance all of which are closely monitored by
MDES management for any indication that we should reassess the locals as anything but low risk. We
understand that this is not documented and therefore does not meet the risk assessment requirement but
wanted to give the context of our actions.”
MDES appears to concur that they did not provide documented evidence to auditors that all required grant
elements were presented to grantees. It should be noted that this evidence has still not been provided to
auditors as of the date of this report.
Lastly, the questioned costs as outlined in finding 2021-043 verify that MDES did not have proper
monitoring procedures in place to monitor subrecipients of the CRF grant program. MDES disagrees that
these costs should be questioned (as noted in their response to finding 2021-043); therefore, they do not
concur that their monitoring procedures and controls failed. OSA has explained, in detail, both in finding
2021-043 and in the rebuttal to MDES’ response above why the auditor questioned these expenses. Please
refer to finding 2021-043 for further information.
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Finding Number
U.S. DEPARTMENT OF TRANSPORTATION
Finding and Recommendation
DEPARTMENT OF TRANSPORTATION
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-019
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements.
20.205 — Highway Planning and Construction
All Current Active Grants
N/A
N/A
Code of Federal Regulations (2 CFR §200.331(f)) states all pass-through entities
(PTE’s) must verify that every subrecipient is audited as required by Subpart F -
Audit Requirements when it is expected that the subrecipient's Federal awards
expended during the fiscal year equaled or exceeded the threshold—a non-Federal
entity that expends $750,000 or more during the non-Federal entity’s fiscal year in
Federal awards must have a single audit conducted—set forth in § 200.501 Audit
requirements.
Code of Federal Regulations (2 CFR § 200.512(a)(1)) states the audit must be
completed and the data collection form and reporting package must be submitted
within the earlier of 30 calendar days after receipt of the auditor's report(s), or
nine months after the end of the audit period. If the due date falls on a Saturday,
Sunday, or Federal holiday, the reporting package is due the next business day.
Code of Federal Regulations (2 CFR § 200.512(a)(2)(b)) states the Federal Audit
Clearinghouse (FAC) is the repository of record for Subpart F — Audit
Requirements reporting packages and the data collection form. All Federal
agencies, pass-through entities and others interested in a reporting package and
data collection form must obtain it by accessing the FAC.
Code of Federal Regulations (2 CFR § 200.332(d)(2)) states the PTE must follow
up ensuring that the Subrecipient takes timely and appropriate action on all
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Transportation (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
deficiencies pertaining to the Federal award provided to the subrecipient from the
PTE detected through audits, on-site reviews, and written confirmation from the
subrecipient, highlighting the status of actions planned or taken to address Single
Audit findings related to the particular subaward.
Code of Federal Regulations (2 CFR § 200.332(d)(3)) states the PTE must issue a
management decision for applicable audit findings pertaining only to the Federal
award provided to the Subrecipient from the PTE as required by § 200.521.
Based on conversations with management, MDOT is not reviewing Single Audits
submitted by subrecipients within six months of acceptance to the FAC. MDOT
only reviews Single Audit reports available at the time of application and awarding
federal funds to LPAs.
During review of one 2019 Federal Year End submitted Single Audit Report of a
subrecipient with MDOT as the PTE, we noted the Single Audit report identified
a material weakness for Assistance Listing Number 20.205 due to the subrecipient
requesting reimbursements prior to actual payment of project costs. MDOT did not
issue a management decision regarding a material weakness noted.
MDOT?’s current policy is to only review submitted Single Audit reports submitted
by subrecipients during the request of future funding by LPAs. Due to timing of
the request of future funding, MDOT may not review submitted Single Audit
reports during the required six month period after subrecipient files single audit to
the FAC.
Without proper monitoring of subrecipients’ submitted federal reports,
subrecipients may participate in unallowable activities that go undetected by
MDOT, the grantor.
We recommend that the Mississippi Department of Transportation strengthen
controls to ensure compliance with the Subrecipient Monitoring requirements.
No.
No.
Management at the Mississippi Department of Transportation concurs with
this finding. See additional comments in the Corrective Action Plan on page
313 of this audit report.
SPECIAL TEST AND PROVISIONS — WAGE RATE
Material Weakness
Material Noncompliance
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Transportation (continued)
2021-020
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Condition
Cause
Strengthen Controls to Ensure Compliance with Wage Rate Requirements.
20.205 — Highway Planning and Construction
All Current Active Grants
N/A
N/A
Code of Federal Regulations (29 CFR § 3.3(b) Labor) requires each contractor or
subcontractor engaged in the construction, prosecution, completion, or repair of
any public building or public work, or building or work financed in whole or in
part by loans or grants from the United States, shall furnish each week a statement
with respect to the wages paid each of its employees engaged on work covered by
part 3 and part 5 of this title during the preceding weekly payroll period. This
statement shall be executed by the contractor or subcontractor or by an authorized
officer or employee of the contractor or subcontractor who supervises the payment
of wages, and shall be on the back of Form WH 347, “Payroll (For Contractors
Optional Use)” or on any form with identical wording.
Code of Federal Regulations (29 CFR § 3.4(a) Labor) requires each weekly
statement required under §3.3 shall be delivered by the contractor or subcontractor,
within seven days after the regular payment date of the payroll period, to a
representative of a Federal or State agency in charge at the site of the building or
work, or, if there is no representative of a Federal or State agency at the site of the
building or work, the statement shall be mailed by the contractor or subcontractor,
within such time, to a Federal or State agency contracting for or financing the
building or work.
MDOT is not requiring contractors or subcontractors to submit within seven days
after the regular payment date of the payroll period a statement with respect to the
wages paid to each of its employees engaged in federal projects.
MDOT was unable to correct prior year finding 2020-034 due to timing of
MDOT?’s submitted corrective action plan dated June 29, 2021. MDOT denoted
in submitted corrective action plan that estimated completion of corrective action
would occur by August 1, 2021. MDOT also stated in submitted summary
schedule of prior federal audit findings dated June 21, 2022, that the prior year
finding was fully corrected. However, due to the corrective action occurring after
fiscal year 2021 year-end, Auditor was unable to determine if MDOT’s corrective
action was properly implemented for fiscal year 2021.
Before submission of MDOT’s corrective action plan dated June 29, 2021,
MDOT?’s current standard practice of requiring payroll submissions to be current
by the first week of monthly estimates allows contractor submissions to be later
than the seven-day submission requirement.
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Transportation (continued)
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Failure to review contractor or subcontractor submitted payroll forms timely may
result in improper payment of wage rates, work performed, and/or abuse of federal
funds.
We recommend MDOT strengthen controls to ensure compliance with federal
wage rate requirements.
Yes, 2020-034.
No.
Management at the Mississippi Department of Transportation does not concur
with this finding. See additional comments in the Corrective Action Plan on page
314 of this audit report; and the Auditor’s Response to the Corrective
Action Plan at page 169 and 319.
SPECIAL TEST AND PROVISIONS — QUALITY ASSURANCE PROGRAM
Significant Deficiency
Immaterial Noncompliance
2021-021
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance With Special Test Requirements
Related to the Quality Assurance Program.
20.205 — Highway Planning and Construction
All Current Active Grants
N/A
N/A
The Code of Federal Regulations (23 CFR § 637.205(a) Quality assurance
program) requires each State Transportation Department shall develop a quality
assurance program which will assure that the materials and workmanship
incorporated into each Federal-aid highway construction project on the National
Highway System are in conformity with the requirements of the approved plans
and specifications, including approved changes. The program must meet the
criteria in § 637.207 and be approved by the Federal Highway Administration.
MDOT’s Independence Assurance Sampling (IAS) personnel are to follow the
schedule set for sample size, frequency of sampling and the designation of
responsibility for sampling and testing set by MDOT’s S.O.P. No.: TMD-06-02-
00-000.
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Transportation (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify control activities- “As part of delegating
authority, management evaluates the delegation for proper segregation of duties
within the unit and in the organizational structure. Segregation of duties helps
prevent fraud, waste, and abuse.”
During review of MDOT’s Quality Assurance Program, we identified the
following:
e Twenty (20) instances, out of 100 sampling records selected for
testing, in which the selected sample was completed, reviewed, and
authorized by the same employee.
e Four (4) instances, out of fifty (50) sampling records selected for
testing, in which the sample did not appear on the TMD-891 report.
The TMD-891 report denotes all IAS samples taken for a project and
states whether the sample was favorable or non-favorable when
compared to the appropriate Job Control Acceptance sample.
e Four (4) instances, out of fifty (50) IAS sample records selected for
testing, in which IAS personnel did not meet the minimum sampling
guidelines.
MDOT staff failed to follow the policies and procedures related to the sampling
rates of materials used in federal projects. Also, MDOT staff failed to adhere to
proper segregation of duties, relating to review and authorization of lab reports.
If the minimum sampling rate is not met as required by MDOT policies that are
approved by FHWA, materials used in federal projects may fail to meet required
federal standards. Also, lab reports being completed, reviewed, and authorized by
the same employee could result in improper sampling, or incomplete tests or
inaccurate tests.
We recommend MDOT strengthen controls over their Quality Assurance Program.
Yes, OTH-20-06.
No.
Management at the Mississippi Department of Transportation does not concur
with this finding. See additional comments in the Corrective Action Plan on page
316 of this audit report; and the Auditor’s Response to the Corrective
Action Plan at page 169 and 319.
167
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Transportation
(MDOT) Management
Department of Transportation — Special Test & Provisions — Wage Rate - Material
Weakness/Material Noncompliance
2021-020 Strengthen Controls to Ensure Compliance with Wage Rate Requirements
MDOT states that their Contract Administration Department (CAD) does not have control over when the
contractors or subcontractors submit their weekly statements or when the warrants are issued to contractors.
However, the Code of Federal regulations (as quoted in the finding) requires that MDOT retain control over
those very things. Even though MDOT did not concur with the finding, they provided some type of
corrective action to help mitigate the issue and OSA will verify that these actions were taken by MDOT in
a future audit.
Department of Transportation — Special Test & Provisions — Quality Assurance Program -
Significant Deficiency/Immaterial Noncompliance
2021-021 Strengthen Controls to Ensure Compliance with Special Test Requirements Related
to the Quality Assurance Program
Based on the Corrective Action Plan, MDOT provided pending corrective action for part of the finding and
appeared to concur, even though they stated they did not concur with the finding. They did not provide
pending corrective action for the portion of the finding for the 20 instances in which the sample was
completed, reviewed, and authorized by the same employee.
MDOT states that the review and authorization of the sample items are not practicable to be segregated;
however, MDOT provided no compensating controls to help ensure that sampling records are accurate,
complete, authorized, or entered into the database correctly. It should be noted that MDOT personnel
incorrectly coded sampling information four times out of 20. Some type of additional control procedure to
ensure that the sampling information is correct could prevent further errors.
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. DEPARTMENT OF THE TREASURY
Finding Number Finding and Recommendation
DEPARTMENT OF FINANCE AND ADMINISTRATION/DEPARTMENT OF AGRICULTURE
AND COMMERCE
ACTIVITIES ALLOWED AND ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021-050 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities
Allowed Requirements for Coronavirus Relief Funds.
ALN Number 21.019 Coronavirus Relief Fund (CRF)
Federal Award No. N/A
Pass-through Entity Department of Finance and Administration (Prime Recipient) to Department of
Agriculture and Commerce (part of the Prime Recipient)
Questioned Costs $244,457
Background The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
Criteria The Mississippi State Legislature established the Mississippi Agriculture
Stabilization Act (MASA) to be administered by the Mississippi Department of
Agriculture and Commerce (MDAC) to assist Mississippi:
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Condition
Cause
Effect
e Poultry farmers who have experienced a loss of at least one full flock of
production due to the COVID-19 pandemic,
e Commodity producers who qualified for the USA Coronavirus Food
Assistance Program (CFAP), and
e Sweet potato farmers for expenses due to the COVID-19 pandemic.
The CARES Act provides that payments from the Fund may only be used to cover
costs that are: 1) necessary expenditures incurred due to the public health
emergency with respect to COVID-19; 2) were not accounted for in the budget
most recently approved as of March 27, 2020 (the date of enactment of the CARES
Act) for the State or government; and 3) were incurred during the period that begins
on March 1, 2020, and ends on December 30, 2020 (later amended to 12/31/2021).
Grant applications require the grantee to confirm understanding that claims must
be substantiated by independent evidence of costs associated with losses directly
attributable to the COVID-19 pandemic.
During allowable costs testing for the Mississippi Department of Agriculture and
Commerce, the auditor noted the following:
e 39 Coronavirus Food Assistance Program (CFAP) grant amounts totaling
$803,935 were selected for audit. Eighteen of the grants were either not
substantiated by adequate support, support was not related to COVID-19,
or were incurred outside of the grant period resulting in actual known
questioned costs of $188,351. When extrapolated against the entire
population of CFAP grant payments, projected questioned costs of
$982,100 were noted.
e Four of the eight sweet potato grant payments audited were not properly
supported. The grantee provided utility/storage fees for the period, but no
documentation as to how much additional fees were incurred due to the
pandemic. This resulted in actual known questioned costs of $56,106. The
auditor extrapolated the costs across the entire population of 19 sweet
potato grants resulting in $262,795 of projected questioned costs.
e The auditor selected 15 poultry grants totaling $503,837 for testing.
Wording in the Mississippi Agriculture Stabilization Act (MASA) were
ambiguous and did not clearly define “full flock loss”. As a result, the
auditor was unable to calculate the appropriate grant amount. As the “full
flock loss” was a state requirement only, the auditor is not questioning the
costs related to the poultry farmers.
The contractor responsible for reviewing documentation and _ supporting
documentation for the grants relied primarily of “self-attestation” of the grantee.
Failure to maintain supporting documentation for eligibility determination could
result in questioned costs and recoupment of costs by the federal granting agency.
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Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
We recommend the Mississippi Department of Agriculture and Commerce
strengthen controls to ensure compliance with allowable costs and activities
allowed requirements for Coronavirus Relief Funds.
No.
Yes.
Management at the Mississippi Department of Agriculture concurs with
this finding. See additional comments in the Corrective Action Plan on page
241 of this audit report.
DEPARTMENT OF FINANCE AND ADMINISTRATION/DEPARTMENT OF EDUCATION
ACTIVITIES ALLOWED AND ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021-044
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Background
Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Coronavirus (COVID) Relief Funds (CRF) and Elementary and Secondary
School Emergency Relief Fund (ESSER).
21.019 Coronavirus Relief Fund (CRF)
84.425D Elementary and Secondary School Emergency Relief Fund (ESSER)
All Current Active Grants
Department of Finance and Administration (Prime Recipient) to Department of
Education (part of the Prime Recipient)
N/A
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
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Criteria
Condition
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
Per Section 31-7-9, Mississippi Code of 1972, Annotated, “Procurement
regulations shall be promulgated by the Office of Purchasing, Travel, and Fleet
Management, with approval of the Public Procurement Review Board.”
Per the Mississippi Procurement Manual, Section 1.103, “All procurement
regulations require all parties involved in the negotiation, performance or
administration of Mississippi contracts to act in good faith.”
Per the Mississippi Procurement Manual, Section 1.104 (2), “The procurement
regulations shall apply to every expenditure of public funds irrespective of their
source, when such expenditures are made in compliance with or are designated by
Section 31-7-1, et seq. Mississippi Code of 1972, Annotated. However, in the event
of a conflict, the guidelines of the grant, gift, or self-generated funds shall prevail;
and in any case, violation of these regulations shall carry such penalties as may be
applicable under state laws.”
Per the Mississippi Procurement Manual, Section 3.110, “Notwithstanding any
other provisions of this regulation, the Chief Procurement Officer, the head of a
purchasing agency, or a designee of either officer may make or authorize others to
make emergency procurements under emergency conditions ... provided, that such
emergency procurements shall be made with such competition as is practicable
under the circumstances.”
Mississippi Senate Bill 3044, adopted during the 2020 legislative session,
otherwise known as the “Equity in Distance Learning Act (the Act)”, provided
funding for devices and other technology for the students, teachers, and
administrators in the schools of Mississippi. The Act authorized MDE to prepare
an Express Product Listing (EPL) for computer equipment. The Act further
authorized MDE to utilize emergency procurement procedures to solicit bids for
the EPL. MDE signed contracts with Apple, Inc. to provide Apple devices to
schools without any competitive bidding process. However, MDE opted to use a
competitive bidding process with bid solicitations for other computer and
technology needs.
During our audit, auditors noted that MDE staff conducted regular meetings with
individuals from the winning bidder of the authorized Express Product Listing
prior to publishing the official Request For Quote (RFQ) to vendors. Additionally,
MDE’s Chief Information Officer forwarded a draft of the “Prime Contractor
Requirements” or specifications to a member of the winning bidder 20 days before
the RFQ was officially released. The winning bidder made modifications to the
specifications before they were submitted in the RFQ.
MDE stated that all vendors that were solicited for bids were provided the
specifications in advance; however, only the winning bidder was given the
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opportunity to make suggestions to edits to the specifications. According to
documentation provided to auditors, the following serves as a timeline of
communication:
July 2, 2020 — Email to future winning bidder with listed specifications as “draft”.
July 9, 2020 — Email from future winning bidder to MDE with changes in
specifications marked in red.
July 21, 2020 — Microsoft “Teams” chat with second bidder where specifications
(with some of future winning bidder edits) are provided.
July 22, 2020 — Email to third bidder where specifications (with some of future
winning bidder edits) are provided.
July 29, 2020 — Official RFQ was provided to vendors.
July 31, 2020 — Deadline for vendor questions.
August 1, 2020 — Deadline for questions answered.
August 3, 2020 — Deadline for submissions of responses to RFQ.
August 3, 2020 — Evaluation of Responses.
August 4, 2020 — Vendor interviews.
August 4, 2020 — Review of submissions by MDE panel.
August 5, 2020 — Contract negotiations.
August 6, 2020 — Board Approval.
August 18, 2020 — Contract Awarded (no later than date).
It should be noted that four vendors submitted proposals and were evaluated.
However, MDE did not present documentation that showed the fourth vendor was
provided specifications in advance. The memorandum on August 4, 2020 that
describes the selection process in broad terms only references three vendors, but
does show a scored rubric for four vendors, illustrating inconsistencies in the
procurement process.
The winning bidder was provided the ability to edit specifications and was
provided the specifications approximately 30 days in advance while the other
vendors were only given approximately two weeks to prepare bids. The winning
bidder suggested extensive “prime contractor requirements” for the specifications,
including information suggesting how many square feet distribution centers
needed to be sized, financing options, experience with specific programs, etc.
Auditors could not see evidence that these specific requirements were added to the
specifications provided to other vendors; however, the winning bidder was
provided an unfair advantage in suggesting that these requirements would aid in
the deployment process. Additionally, similar requirements and experience factors
were noted by MDE and the procurement reviewers during the proposal analysis
phase.
When comparing prices on the RFQ, the winning bidder received 35 points for the
category of “Devices, including price considerations.” However, when price was
compared, the winning bidder was not the lowest bidder, nor the second lowest
bidder. The next highest score in the category was “25” but the prices of the
competitor were significantly lower. MDE failed to provide any information on
why the points were assigned and calculated other than an overall memorandum
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of the scores and process. Based on information provided, it does not appear that
the procurement process was designed to promote fair and open competition; nor
does it appear that all parties negotiated the agreements in good faith.
Cause MDE failed to act in good faith in obtaining requisitions of equipment related to
CRF and ESSER funds.
Effect Failure to act in good faith during procurement negotiations can open MDE to civil
litigation claims. Additionally, implied preference to vendors could result in
public distrust in the procurement process. Lastly, implied preference could result
in fraud, waste, or abuse during the procurement process.
Recommendation We recommend the Mississippi Department of Education strengthen controls to
ensure compliance with allowable costs requirements of the Coronavirus (COVID)
Relief Funds (CRF) and Elementary and Secondary School Emergency Relief
Fund (ESSER).
Repeat Finding No.
Statistically Valid No.
View of Responsible
Officials Management at the Mississippi Department of Education does not concur with
this finding. See additional comments in the Corrective Action Plan on page 249
of this audit report; and the Auditor's Response to the Corrective Action Plan on
page 199 and 261.
DEPARTMENT OF FINANCE AND ADMINISTRATION/DEPARTMENT OF EMPLOYMENT
SECURITY
ACTIVITIES ALLOWED AND ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021- 043 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities
Allowed Requirements for Coronavirus Relief Funds.
ALN Number 21.019 Coronavirus Relief Fund (CRF)
Federal Award No. N/A
Federal Agency Department of Treasury
Pass-through Entity Department of Finance and Administration (Prime Recipient) to Department of
Employment Security (part of the Prime Recipient)
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Questioned Costs
Background
Criteria
Condition
$2,787,558
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
Office of the Inspector General Memorandum OIG-CA-20-021 “Coronavirus
Relief Fund Reporting and Record Retention Requirements” states that Recipients
of Coronavirus Relief Fund payments shall maintain ... all documents and
financial records sufficient to establish compliance with subsection 601(d) of the
Social Security Act, as amended, (42 U.S.C. 801(d)), which provides:
(d) USE OF FUNDS.—A State, Tribal government, and unit of local
government shall use the funds provided under a payment made under this
section to cover only those costs of the State, Tribal government, or unit
of local government that—
1. Are necessary expenditures incurred due to the public health
emergency with respect to COVID-19;
2. Were not accounted for in the budget most recently approved as of
the date of enactment of this section for the State or government;
and
3. Were incurred during the period that begins on March 1, 2020, and
ends on December 30, 2021.
Per the Federal Register / Vol. 86, No. 10, “As with all uses of payments from the
Fund, the use of payments to acquire or improve property is limited to that which
is necessary due to the COVID-19 public health emergency. In the context of
acquisitions of real estate and acquisitions of equipment, this means that the
acquisition itself must be necessary. In particular, a government must (1) determine
that it is not able to meet the need arising from the public health emergency in a
cost-effective manner by leasing property or equipment or by improving property
already owned and (ii) maintain documentation to support this determination.”
During review of Coronavirus Relief Fund payments at the Mississippi
Department of Employment Security, the auditor noted the following instances
where it could not be determined from the documentation provided that these
expenses were necessary due to the public health emergency:
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11 instances of “student vouchers” to pay for tuition of courses taught at
varying Community Colleges. Auditors were unable to determine from
the documentation provided that these expenses were considered
necessary due to the public health emergency. Vouchers were for a wide-
range of programs including welding, construction, general business,
heavy equipment, student fees, etc. Subgrantees (community colleges) did
not provide adequate documentation to address how these classes were
related to the public health emergency; nor did they establish any type of
program guidelines that would dictate that the fees covered only classes
performed during the grant’s period of performance. Documentation
could not substantiate that these classes were new classes added due to the
pandemic, or that the voucher support aided those in need due to the
pandemic.
Total actual questioned costs - $13,263
Total projected questioned costs - $1,825,345
18 instances, totaling $2,735,144 of equipment purchases for various
equipment used for instruction of classes during the period of
performance. Two of the 19 instances also fell outside of the period of
performance.
Equipment purchases include:
Professional drones ($6,299)
Cutting tables ($44,518)
Tractors ($42,201)
Welding kits ($15,309)
Hydraulic learning systems ($133,870)
HVAC trainers ($104,720)
PLC modules for trainers ($130,000)
Virtual Reality simulator ($61,800)
Welding simulators ($245,500)
Front End Loader ($161,231)
SmartLabs ($182,414)
HVAC System for teaching ($24,950)
Opthamalic Technology — Edger ($24,495)
Twin spindle lathes ($313,800)
Heavy equipment simulators ($172,247)
Robot intelligent manufacturing system ($1,071,790)
OO0O0 00000 00000 0 0
Auditors were unable to determine from the documentation provided that
these expenses were considered necessary due to the public health
emergency. Subgrantees (community colleges) did not provide adequate
documentation to address how these purchases were directly related to the
public health emergency; nor did they establish any type of program
guidelines that would dictate that the equipment would be used during the
grant’s period of performance. Documentation could not substantiate that
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these equipment purchases were due to new classes added due to the
pandemic; nor could the documentation substantiate that these purchases
were not accounted for in the most recently approved budget as per the
date of enactment of the grant.
While the guidelines of the grant allowed governments to determine what
items were necessary for the pandemic, the government is still responsible
for demonstrating how items purchased addressed that need, and how the
need was directly related to the COVID-19 pandemic. Additionally,
governments were responsible for ensuring that any equipment purchased
was the most cost effective method of addressing any needs that arose.
For example, rather than purchasing new equipment, a government could
rent equipment until the COVID-19 necessity passed. Auditors could find
no documentation to support how MDES assessed that these equipment
purchases were necessary directly due to the pandemic, and if any more
cost effective methods of addressing those needs were considered.
State legislation granting MDES these CRF monies did dictate that the
purpose of the funds were for “short-term training programs and the
equipment and supplies necessary to support such short-term training
programs and to increase the capacity of training programs that are already
in place so that employees and others who have been displaced due to the
Covid-19 public health emergency can be more competitive and trained
for the job market that emerges after the Covid-19 public health
emergency, for on-the-job training and for certain administrative fees.”
However, preparing individuals for a “post Covid-19 job market” does not
meet the requirements that grant monies be utilized to meet expenditures
necessary for the “current Covid-19 emergency”. Additionally, MDES is
required to ensure that expenditures paid for by grant monies met the
federal guidelines before determining if the expenditures met the
requirements of any additional state imposed restrictions on how to spend
grant monies.
One instance, totaling $37,099, in which equipment purchased was put
into service outside of the period of performance (December 31, 2021).
Auditors were also unable to determine from the documentation provided
that these expenses were considered necessary due to the public health
emergency. Subgrantee (community colleges) did not provide adequate
documentation to address how this purchase was directly related to the
public health emergency; nor did they establish any type of program
guidelines that would dictate that the equipment would be used during the
grant’s period of performance. Documentation could not substantiate that
these equipment purchases were due to new classes added due to the
pandemic; nor could the documentation substantiate that these purchases
were not accounted for in the most recently approved budget as per the
date of enactment of the grant.
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Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
According to the subgrantee, the equipment was purchased, but no
instructor was available to teach the class; therefore, the equipment was
not used during the period of performance.
Total actual questioned costs - $2,774,295
Total projected questioned costs - $17,999,485
MDES did not appropriately monitor or review expenditures at the subrecipient
level to ensure adherence to allowable costs and activities allowed guidelines.
Failure to monitor or review expenditures at the subrecipient level could result in
MDES purchasing items that are unallowable, and the grantor requesting
recoupment of those costs disallowed.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with allowable costs and activities allowed
requirements for Coronavirus Relief Funds.
No.
Yes.
Management at the Mississippi Department of Employment Security does not
concur with this finding. See additional comments in the Corrective Action Plan
on page 273 of this audit report; and the Auditor's Response to the Corrective
Action Plan on page 201 and 287.
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-045
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Background
Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements.
21.019 Coronavirus Relief Fund (CRF)
N/A
Department of Finance and Administration (Prime Recipient) to Department of
Employment Security (part of the Prime Recipient)
N/A
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
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Criteria
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
The Code of Federal Regulations 2 CFR 200.332(a) requires that a pass-through
entity must ensure that every subaward is clearly identified to the subrecipient as
a subaward and includes the following information at the time of the subaward and
if any of these data elements change, include the changes in subsequent subaward
modification. When some of this information is not available, the pass-through
entity must provide the best information available to describe the Federal award
and subaward. This required information includes:
e Subrecipient name (which must match the name associated with its unique
entity identifier);
Subrecipient's unique entity identifier;
Federal Award Identification Number (FAIN);
Federal Award Date of award to the recipient by the Federal agency;
Subaward Period of Performance Start and End Date;
Subaward Budget Period Start and End Date;
Amount of Federal Funds Obligated by this action by the pass-through
entity to the subrecipient;
e Total Amount of Federal Funds Obligated to the subrecipient by the pass-
through entity including the current financial obligation;
e Total Amount of the Federal Award committed to the subrecipient by the
pass-through entity;
e Federal award project description, as required to be responsive to the
Federal Funding Accountability and Transparency Act (FFATA);
e Name of Federal awarding agency, pass-through entity, and contact
information for awarding official of the Pass-through entity;
e Assistance Listings number and Title; the pass-through entity must
identify the dollar amount made available under each Federal award and
the Assistance Listings Number at time of disbursement;
e Identification of whether the award is R&D; and
e Indirect cost rate for the Federal award.
Additionally, The Code of Federal Regulations 2 CFR 200.332(b) requires that the
pass-through entity evaluate each subrecipient’s risk of noncompliance with
Federal statutes, regulations, and the terms and conditions of the subaward for
purposes of determining the appropriate subrecipient monitoring requirements.
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These “pre-award risk assessments” should be performed prior to grant
performance, and can include considerations such as the grantee’s prior experience
with federal awards, the results of prior audits, new grantee personnel or systems,
and the extent and results of federal awarding agency monitoring.
The Code of Federal Regulations 2 CFR 200.332(d) states that the pass-through
entity should monitor the activities of the subrecipient as necessary to ensure that
the grantee uses the award for the authorized purposes and in compliance with
federal statutes, regulations, and the terms and conditions of the award.
Condition During review of the subrecipient monitoring requirements at the Mississippi
Department of Employment Security, the auditor noted the following:
MDES did not document pre-award risk assessments for the subrecipients
of the CRF grant funds. According to MDES personnel, the agency
regularly interacts with the subrecipients (Planning and Development
Districts (PDDs), the Local Workforce Development Areas (LWDA) and
community colleges), and that these same PDD’s are utilized for the
Workforce Innovation and Opportunity Act (WIOA) grants, and are
monitored as part of that grant process. Further, MDES states that state
law governs the creation of the LWDA’s, and the roles and responsibilities
of each. Due to this relationship, MDES states that the entities are low
risk, but does not have any documented support of these assessments —
including why or how these low-risk assessments were determined.
MDES did not include all the required grant elements to the PDDs upon
the initial grant award notices. The PDDs then awarded the state’s
community colleges grant awards based on state legislation, but also did
not include all the required elements.
o Of the four PDD subawards, three (or 75%) did not include the
federal award identification number, the unique identity identifier,
the federal award date, or the assistance listing number.
MDES did not properly monitor allowable cost spending at the
subrecipient level. Due to this failure to properly monitor, auditors noted
the following questioned costs:
o $13,263 in student voucher payments that are not supported by
documentation;
o $2,735,144 in equipment purchases that are not supported by
documentation;
o $37,099 in equipment purchases for equipment that were not put
into service during the period of performance.
More detail about these questioned costs, including the projections, are
described in finding 2021-043 of this report.
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Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
The Mississippi Department of Employment security did not feel it was necessary
to document the pre-award risk assessment due to their familiarity with the
subrecipients. Additionally, detailed subrecipient monitoring was not performed
by MDES when reviewing subrecipient purchases for reimbursement to determine
if the costs met the allowable costs requirements.
The failure to properly perform a documented risk assessment and to monitor
subrecipient’s adherence to allowable cost guidelines could result in misspending
of the grant funds.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with subrecipient monitoring requirements.
No.
N/A
Management at the Mississippi Department of Employment Security does not
concur with this finding. See additional comments in the Corrective Action Plan
on page 281 of this audit report; and the Auditor's Response to the Corrective
Action Plan at page 203 and 289.
DEPARTMENT OF FINANCE AND ADMINISTRATION/MISSISSIPPL EMERGENCY
MANAGEMENT AGENCY
ACTIVITIES ALLOWED AND ALLOWABLE COSTS
Material Weakness
Material Noncompliance
2021-046
ALN Number
Federal Award No.
Federal Agency
Pass-through Entity
Questioned Costs
Strengthen Controls to Ensure Compliance with Allowable Costs and Activities
Allowed Requirements for Coronavirus Relief Funds.
21.019 Coronavirus Relief Fund (CRF)
N/A
Department of Treasury
Department of Finance and Administration (Prime Recipient) to Mississippi
Emergency Management Agency (part of the Prime Recipient)
$2,878,402
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PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Background
Criteria
Condition
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
Per the Federal Register / Vol. 86, No. 10, “As with all uses of payments from the
Fund, the use of payments to acquire or improve property is limited to that which
is necessary due to the COVID-19 public health emergency. In the context of
acquisitions of real estate and acquisitions of equipment, this means that the
acquisition itself must be necessary. In particular, a government must (i) determine
that it is not able to meet the need arising from the public health emergency in a
cost-effective manner by leasing property or equipment or by improving property
already owned and (ii) maintain documentation to support this determination.”
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provides
that payments from Coronavirus Relief Funds (CRF) may only be used to cover
costs that are: 1) necessary expenditures incurred due to the public health
emergency with respect to COVID-19; 2) were not accounted for in the budget
most recently approved as of March 27, 2020 (the date of enactment of the CARES
Act) for the State or government; and 3) were incurred during the period that begins
on March 1, 2020, and ends on December 30, 2020 (later amended to 12/31/2021).
Mississippi Emergency Management Agency (MEMA) incurred costs to purchase
and refurbish a building using CRF monies. The stated purpose of the building
was store personal protective equipment (PPE) to allow for better distribution
throughout the State of Mississippi. However, during testing, auditors noted that
PPE storage only utilized a small portion of the 8,800 square feet of the building,
which sits on 16 acres of land. A press release issued by MEMA on September
23, 2020 states that while the building, known as the State Emergency Logistical
Operations Center (SELOC), “... will be an immense asset to the state’s COVID-
19 response, MEMA’s vision for the logistical operations center extends past the
pandemic. In the future, the facility will serve as a permanent space to hold disaster
response and relief supplies in addition to emergency management equipment. It
will also be the permanent location for MEMA’s procurement and allocation
branches. Overall, this new facility will help support MEMA’s future growth in
all aspects of the agency’s operations.” These statements, along with the lack of
documentation of consideration of alternate, more cost efficient methods of PPE
storage (such as short term rentals, existing usable space, etc. resulted in a
potentially unnecessary expenditure of CRF monies, thereby violating grant
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
allowable costs. While the costs indirectly help MEMA respond to COVID-19,
we have determined them to not be necessary as the costs will primarily benefit
future emergencies.
The building purchase resulted in known questioned costs of $2,360,000.
Additionally, during the testing of 60 other expenditures items, 21 items (or 35%)
were noted to be payments for the purchase of items related to the building and for
refurbishment of the building. Since the purchase of the building itself is
questioned (the underlying asset), any additional expenses related to preparing the
asset for service are also questioned. The 21 items identified as expenses related
to the SELOC during testing resulted in $518,402 of actual questioned costs.
In total, the building purchase resulted in known questioned costs of $2,878,402.
An additional $3,152,390 in likely questioned costs was also noted.
The Agency purchased a building and paid additional costs to put the building into
service that violated the grant requirements that purchases be necessary, and for
the current COVID-19 pandemic. While a portion of the building was used for
PPE storage, the majority of the asset will benefit MEMA in future disaster events.
Additionally, MEMA did not properly document more cost-effective means of
storing PPE equipment to establish necessity of purchase.
Failure to comply with allowable costs and activities allowed requirements could
result in the grantor requesting recoupment of costs disallowed.
We recommend the Mississippi Emergency Management Agency strengthen
controls to ensure compliance with allowable costs and activities allowed
requirements for Coronavirus Relief Funds.
No.
No.
Management at the Mississippi Emergency Management Agency does not concur
with this finding. See additional comments in the Corrective Action Plan on
page 331 of this audit report; and the Auditor's Response to the Corrective Action
Plan on page 205 and 337.
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-047
Strengthen Controls to Ensure Terms and Conditions are stated in Subrecipient
185
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Background
Criteria
Subaward Documents.
21.019 Coronavirus Relief Fund (CRF)
N/A
Department of Finance and Administration (Prime Recipient) to Mississippi
Emergency Management Agency (part of the Prime Recipient)
N/A
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
The Code of Federal Regulations 2 CFR 200.332(a) requires that a pass-through
entity must ensure that every subaward is clearly identified to the subrecipient as
a subaward and includes the following information at the time of the subaward
(and if any of these data elements change, include the changes in subsequent
subaward modification). When some of this information is not available, the pass-
through entity must provide the best information available to describe the Federal
award and subaward. This required information includes:
e Subrecipient name (which must match the name associated with its unique
entity identifier);
Subrecipient's unique entity identifier;
Federal Award Identification Number (FAIN);
Federal Award Date of award to the recipient by the Federal agency;
Subaward Period of Performance Start and End Date;
Subaward Budget Period Start and End Date;
Amount of Federal Funds Obligated by this action by the pass-through
entity to the subrecipient;
e Total Amount of Federal Funds Obligated to the subrecipient by the pass-
through entity including the current financial obligation;
e Total Amount of the Federal Award committed to the subrecipient by the
pass-through entity;
e Federal award project description, as required to be responsive to the
Federal Funding Accountability and Transparency Act (FFATA);
186
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
Material Weakness
e Name of Federal awarding agency, pass-through entity, and contact
information for awarding official of the Pass-through entity;
e Assistance Listings number and Title; the pass-through entity must
identify the dollar amount made available under each Federal award and
the Assistance Listings Number at time of disbursement;
e Identification of whether the award is R&D; and
e Indirect cost rate for the Federal award.
During testwork performed for subrecipient monitoring for year ended June 30,
2021, the auditor noted that 100% of the 60 sampled subawards issued to
subrecipients of CRF grants did not include all of the required data elements such
as the Assistance Listing Number (ALN), award name and number, whether the
award is research and development, and the name of the federal awarding agency.
An abbreviated application agreement was the only form of subrecipient
agreement entered into between MEMA and the subrecipients of the CRF grants.
Failure to include required information about the grant to subrecipients could
increase the likelihood that subrecipients will not comply with single audit
requirements; and that MEMA could be required to pay back grant funds.
We recommend the Mississippi Emergency Management Agency strengthen
controls to ensure terms and conditions are stated in subrecipient subaward
documents as required by Uniform Grant Guidance.
No.
Yes.
Management at the Mississippi Emergency Management Agency does not concur
with this finding. See additional comments in the Corrective Action Plan on
page 333 of this audit report; and the Auditor's Response to the Corrective Action
Plan on page 206 and 338.
Material Noncompliance
2021-048
ALN Number
Federal Award No.
Pass-through Entity
Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements.
21.019 Coronavirus Relief Fund (CRF)
N/A
Department of Finance and Administration (Prime Recipient) to Mississippi
Emergency Management Agency (part of the Prime Recipient)
187
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Questioned Costs
Background
Criteria
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
N/A
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
The Code of Federal Regulations (2 CFR §200.331(f)) states all pass-through
entities (PTE’s) must verify that every subrecipient is audited as required by
Subpart F - Audit Requirements when it is expected that the subrecipient's Federal
awards expended during the fiscal year equaled or exceeded the threshold—a non-
Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal
year in Federal awards must have a single audit conducted—set forth in § 200.501
Audit requirements.
During testwork performed for Subrecipient Monitoring for CRF, the auditor noted
55 of the 60 subrecipients tested (91.7%) were noted as not monitored by MEMA.
MEMA’s policies and procedures for monitoring subrecipients’ filing of a single
audit report only required monitoring of those subrecipients that received more
than $750,000 directly from MEMA, and not subrecipients that received more than
$750,000 in the aggregate for the fiscal year among a variety of sources.
MEMA's subrecipient monitoring policy incorrectly references Uniform Guidance
§ 200.501 as the requirements that MEMA should follow to comply with its
subrecipient monitoring requirements.
Failure to consider if subrecipients were required to file an audit report for
aggregated federal expenditures of over $750,000 resulted in MEMA not properly
monitoring subrecipients for adherence to federal audit guidelines.
We recommend the Mississippi Emergency Management Agency strengthen
controls to ensure compliance with subrecipient monitoring requirements.
No.
Yes.
188
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SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
View of Responsible
Officials
Management at the Mississippi Emergency Management Agency concurs with
this finding. See additional comments in the Corrective Action Plan on page 335
of this audit report.
DEPARTMENT OF FINANCE AND ADMINISTRATION/MISSISSIPPI PUBLIC UTILITIES
STAFF
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-049
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Background
Criteria
Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements.
21.019 Coronavirus Relief Fund (CRF)
N/A
Department of Finance and Administration (Prime Recipient) to Mississippi Public
Utilities Staff (part of the Prime Recipient)
N/A
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
The Code of Federal Regulations 2 CFR 200.332(a) requires that a pass-through
entity must ensure that every subaward is clearly identified to the subrecipient as
a subaward and includes the following information at the time of the subaward and
if any of these data elements change, include the changes in subsequent subaward
modification. When some of this information is not available, the pass-through
entity must provide the best information available to describe the Federal award
189
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
and subaward. This required information includes:
e Subrecipient name (which must match the name associated with its
unique entity identifier);
Subrecipient's unique entity identifier;
Federal Award Identification Number (FAIN);
Federal Award Date of award to the recipient by the Federal agency;
Subaward Period of Performance Start and End Date;
Subaward Budget Period Start and End Date;
Amount of Federal Funds Obligated by this action by the pass-through
entity to the subrecipient;
e Total Amount of Federal Funds Obligated to the subrecipient by the
pass-through entity including the current financial obligation;
e Total Amount of the Federal Award committed to the subrecipient by the
pass-through entity;
e Federal award project description, as required to be responsive to the
Federal Funding Accountability and Transparency Act (FFATA);
e Name of Federal awarding agency, pass-through entity, and contact
information for awarding official of the Pass-through entity;
e Assistance Listings number and Title; the pass-through entity must
identify the dollar amount made available under each Federal award and
the Assistance Listings Number at time of disbursement;
e Identification of whether the award is R&D; and
e Indirect cost rate for the Federal award.
During review of the subrecipient monitoring requirements at the Mississippi
Public Utilities Staff, the auditor noted the following:
Of the six subaward agreements tested, six (or 100%) did not include the assistance
listing number, period of performance, and the federal awarding agency
The Mississippi Public Utilities Staff used subrecipient agreements that lacked the
proper information sufficient to ensure the pass-through entities to comply with
federal statutes.
The failure to properly communicate to subrecipients the required information
could result in the failure to comply with award federal statutes, regulations, and
the terms and conditions of the award.
We recommend the Mississippi Department of Employment Security strengthen
controls to ensure compliance with subrecipient monitoring requirements.
No.
N/A
190
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
View of Responsible
Officials
Management at the Mississippi Public Utilities Staff concurs with this finding.
See additional comments in the Corrective Action Plan on page 339 of this
audit report.
DEPARTMENT OF FINANCE AND ADMINISTRATION/MISSISSIPPI VETERANS AFFAIRS
REPORTING
Material Weakness
Material Noncompliance
2021-052
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Background
Criteria
Strengthen Controls Over the Preparation, Recording, and Review of the
Schedule of Expenditures of Federal Awards.
21.019 Coronavirus Relief Funds (CRF)
N/A
Department of Finance and Administration (Prime Recipient) to Mississippi
Veterans Affairs (part of the Prime Recipient)
Unable to determine due to disclaimer audit opinion
The United States Treasury, as part of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, granted the Mississippi Department of Finance and
Administration (DFA), as the State’s Fiscal Agent, $1.25 billion in Coronavirus
Relief Funds (CRF) (ALN 21.019). In order to expedite the spending of the funds
to abide by the initial period of performance end date of December 30, 2020, the
Mississippi State Legislature passed several pieces of legislation that directed the
Mississippi Department of Finance and Administration to allocate the CRF grant
funds to various other state agencies. These state agencies are considered part of
the “prime recipient” along with DFA; therefore, no subrecipient relationship
existed within the regulations of the CRF grant. In order to audit these funds,
audits of expenditures were performed at each state agency that received CRF
monies, and the management of those agencies responded to the findings and
provided corrective action plans in lieu of DFA providing them.
The Code of Federal Regulations (2 cfr §200.510(b)) states, in part “the auditee
must prepare a schedule of expenditures of federal awards for the period covered
by the auditee's financial statements which must include the total Federal awards
expended as determined in accordance with §200.502.”
Code of Federal Regulations (2 cfr §200.502(a)) states, in part, “the determination
of when a federal award is expended must be based on when the activity related to
the Federal award occurs.”
191
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Condition
Cause
Effect
Recommendation
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that a review is performed to verify the accuracy and
completeness of financial information reported. The Federal Grant Activity
Schedule captures amounts that must be accurate and complete in order to ensure
the accuracy of financial and federal information reported on such schedule to
verify the accuracy and completeness of financial information reported.
The Mississippi Agency Accounting Policies and Procedures (MAAPP) manual
Section 27.30.60 states, “The Federal Grant Activity schedule supports amounts
reported on the GAAP packet for federal grant revenues, receivables, deferred
revenues and expenditures. The schedule is also used for preparing the Single
Audit Report required by the Single Audit Act, Office of Management and Budget
Uniform Grant Guidance and the State’s audit requirements. The amounts on this
schedule should be reconciled by the agency with amounts reported on federal
financial reports.”
During the audit of Mississippi Veterans Affairs (MVA) for fiscal year ended June
30, 2021, auditors noted that MVA recorded expenditures related to the
Coronavirus Relief Funds based on an allocation of all expenditures and revenues
for the months of October, November and December. When the auditors inquired
of the rational or justification of how the expenditures were selected and allocated
no justification could be provided.
Since amounts were based on an allocation of all payments and payroll amounts
there were no specific invoices or employee payroll that were identified as
qualifying under the grant. Due to this inability to define which expenditures were
paid with grant funds, and an inability to separate allowable costs in the allocation
from unallowable costs, auditors could not determine, with any reasonable
accuracy, what the questioned costs are from the grant. Furthermore, due to the
lack of methodology justification maintained by the agency, auditors were overall
unable to audit the CRF funds.
Management at MVA is relatively new and made adjustments to internal
expenditures without communication to SFA and the need to adjust the SEFA.
Failure to properly communicate the justification for expenditures to be included
in the SEFA could result in some or all the costs to be questioned. With no
identification of specific invoices or specific employee payroll that qualified for
reimbursement all costs could be brought into question.
We recommend Mississippi Veterans Affairs strengthen controls over the
documentation maintained to justify amounts are properly charged to grants.
192
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Repeat Finding
Statistically Valid
View of Responsible
Officials
No.
N/A
Management at the Mississippi Veterans Affairs concurs with this finding. See
additional comments in the Corrective Action Plan on page 342 of this audit
report.
DEPARTMENT OF FINANCE AND ADMINISTRATION
REPORTING
Material Weakness
Material Noncompliance
2021-030
ALN Number
Federal Award No.
Pass-through Entity
Questioned Costs
Criteria
Strengthen Controls to Ensure Proper Review over the Schedule of Expenditures
of Federal Awards.
21.023 Emergency Rental Assistance
N/A
N/A
N/A
The Code of Federal Regulations (2 cfr 200.302(b)) states in part that the financial
management system of each non-Federal entity must provide for the “identification, in
its accounts, of all Federal awards received and expended and the Federal programs
under which they were received. Federal program and Federal award identification
must include, as applicable, the Assistance Listings title and number, Federal award
identification number and year, name of the Federal agency, and name of the pass-
through entity, if any.....”
The Code of Federal Regulations 2 CFR 200.508(b) states, “Prepare appropriate
financial statements, including the schedule of expenditures of Federal awards in
accordance with § 200.510.”
The Code of Federal Regulations 2 CFR 200.510(b) states, the auditee must also
prepare a schedule of expenditures of Federal awards for the period covered by the
auditee's financial statements which must include the total Federal awards
expended as determined in accordance with § 200.502”
Additionally, the /nternal Control — Integrated Framework published by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
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STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
and the U.S. Government Accountability Office Standards for Internal Control in
the Federal Government (Green Book) specifies that a satisfactory control
environment is only effective when control activities exist. Effective control
activities dictate that a review is performed to verify the accuracy and
completeness of financial information reported. The Schedule of Expenditures of
Federal Awards contains information such as Assistance Listing Numbers (ALN)
and grant identification numbers that must be properly and accurately recorded.
Condition During the review of the schedule of expenditure of federal awards (SEFA) as
obtained from the Mississippi Department of Finance and Administration (DFA),
auditor noted that DFA incorrectly reported Homeowners Assistance (ALN
21.026) to Rental Assistance (ALN 21.023).
Cause The agency did not possess or enforce proper internal control structures.
Additionally, the agency did not properly review and reconcile the schedule of
expenditures of federal awards information and did not perform review over
crucial aspects of financial reporting.
Effect Failure to properly ensure federal grant activity, including revenue and
expenditures, are properly recorded on the agencies Schedule of Expenditures of
Federal Awards could result in reporting errors in the State’s Master Schedule of
Expenditures of Federal Awards and/or exclusion of major programs to be audited
on the State’s Single Audit Report.
Recommendation We recommend the Department of Finance and Administration strengthen controls
to ensure proper review over the schedule of expenditures of federal awards.
Repeat Finding No.
Statistically Valid N/A.
View of Responsible
Officials Management at the Mississippi Department of Finance and Administration
concurs with this finding. See additional comments in the Corrective Action
Plan on page 295 of this audit report.
Material Weakness
Material Noncompliance
2021-031 Strengthen Controls to Ensure Compliance with Reporting Requirements for
Emergency Rental Assistance.
CFDA Number 21.023 Emergency Rental Assistance
Federal Award No. N/A
194
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Questioned Costs
Criteria
Condition
N/A
The Code of Federal Regulations (2 CFR 200.303(a)) States that 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. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States or the
“Internal Control Integrated Framework’’, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Additionally, the Code of Federal Regulations (2 cfr 170.200), reporting
requirements are “(a) federal awarding agencies are required to publicly report
Federal awards that equal or exceed the micro-purchase threshold and publish the
required information on a public-facing, OMB-designated, government wide
website and follow OMB guidance to support Transparency Act implementation.
(b) Federal awarding agencies that obtain post-award data on subaward obligations
outside of this policy should take the necessary steps to ensure that their recipients
are not required, due to the combination of agency-specific and Transparency Act
reporting requirements, to submit the same or similar data multiple times during a
given reporting period.”
Furthermore, the Internal Control — Integrated Framework published by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
and the U.S. Government Accountability Office Standards for Internal Control in
the Federal Government (Green Book) specifies that a satisfactory control
environment is only effective when control activities exist. This includes but is not
limited to, maintaining proper segregation of duties within the entity and
determining which laws and regulations apply to the entity and setting objectives
that incorporate these requirements.
Mississippi Home Corporation (MHC), a subrecipient of DFA, did not have
controls in place for multi-level review and approval of federal reports to ensure
the Emergency Rental Assistance program was reported correctly to the
Department of the Treasury.
Additionally, auditors could not verify that Mississippi Home Corporation
maintained segregation of duties in regards to the preparation, approval, and
submission of federal reports.
Furthermore, DFA did not file a FFATA Subaward Report with the Federal
Funding Accountability and Transparency Act Subaward Reporting System as
required by the Federal Funding Accountability and Transparency Act.
195
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
DFA relied on MHC to fulfill all the reporting requirements of the grant; therefore,
MHC’s failure to appropriately segregate controls and to submit required reports
results in DFA receiving the findings.
Lack of proper internal controls could result in erroneous reports being submitted
to the federal cognizant agency
We recommend the Department of Finance and Administration strengthen controls
in order to ensure adequate segregation of duties exist and reporting requirements
are being met.
No.
N/A
Management at the Mississippi Department of Finance and
Administration concurs with this finding. See additional comments in the
Corrective Action Plan on page 296 of this audit report.
SUBRECIPIENT MONITORING
Material Weakness
Material Noncompliance
2021-032
CFDA Number
Federal Award No.
Questioned Costs
Criteria
Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements.
21.023 Emergency Rental Assistance
N/A
N/A
The Code of Federal Regulations (2 CFR 200.328) states that:
(a) Monitoring by the non-Federal entity. The non-Federal entity is responsible for
oversight of the operations of the Federal award supported activities. The non-
Federal entity must monitor its activities under Federal awards to assure
compliance with applicable Federal requirements and performance expectations
are being achieved. Monitoring by the non-Federal entity must cover each
program, function or activity. See also § 200.331 Requirements for pass-through
entities.
(b)(2) The non-Federal entity must submit performance reports using OMB-
approved government-wide standard information collections when providing
performance information. As appropriate in accordance with above mentioned
196
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Condition
information collections, these reports will contain, for each Federal award, brief
information on the following unless other collections are approved by OMB:
(i) A comparison of actual accomplishments to the objectives of the
Federal award established for the period. Where the accomplishments of
the Federal award can be quantified, a computation of the cost (for
example, related to units of accomplishment) may be required if that
information will be useful. Where performance trend data and analysis
would be informative to the Federal awarding agency program, the Federal
awarding agency should include this as a performance reporting
requirement.
(ii) The reasons why established goals were not met, if appropriate.
(iii) Additional pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
Additionally, The Code of Federal Regulations (2 CFR 200.332 (d)) States that
the pass-through entity “Monitor the activities of the subrecipient as necessary to
ensure that the subaward is used for authorized purposes, in compliance with
Federal statutes, regulations, and the terms and conditions of the subaward; and
that subaward performance goals are achieved...”
Furthermore, the Code of Federal Regulations (45 cfr 200.62), states that “a non-
Federal entity must have internal control over compliance designed to provide
reasonable assurance that; ...
(b) Transactions are executed in compliance with:
(1) Federal statutes, regulations, and the terms and conditions of the Federal award
that could have a direct and material effect on a Federal program; and
(2) Any other Federal statutes and regulations that are identified in the Compliance
Supplement...”
The Internal Control - Integrated Framework published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) specifies that a
satisfactory control environment is only effective when timely and appropriate
monitoring is performed by management.
The Mississippi Department of Finance and Administration did not perform a pre-
award risk assessment for the subrecipient of the Emergency Rental Payments
(ERP). Additionally, no grant agreement exists between the subrecipient and
DFA; therefore, none of the required grant elements were properly communicated
to the subrecipient. Lastly, DFA did not perform any monitoring procedures of the
ERP monies, at either the subrecipient level or the beneficiary level. Based on
recommendations from those charged with governance, DFA elected to allow
Mississippi Home Corporation (MHC) the authority to administer the program for
the State of Mississippi. MHC is a quasi-governmental agency and is not part of
the State’s financial reporting structure; therefore, DFA created a subrecipient
relationship when the ERP monies were distributed to MHC for the administration
of the Rental Assistance for Mississippians Program (RAMP).
197
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 - Federal Award Findings and Questioned Costs — US Dept of Treasury (continued)
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
View of Responsible
Officials
The Mississippi Department of Finance and Administration distributed the entirety
of the ERP grant to a third party administrator, MHC, and did not consider this to
be a subrecipient relationship.
Lack of proper controls and monitoring procedures could result in the misuse
and/or improper spending of federal funds.
We recommend the Department of Finance and Administration implement
monitoring procedures over subrecipients in order to ensure federal compliance
requirements are being met. Additionally, we recommend that the agency follow
all pre-award and post-award requirements of grant programs.
No.
N/A
Management at the Mississippi Department of Finance and Administration
concurs with this finding. See additional comments in the Corrective Action
Plan on page 296 of this audit report.
198
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Education
(MDE) Management
Department of Education — Activities Allowed/Allowable Costs - Material Weakness/Material
Noncompliance
2021-044 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Coronavirus (COVID) Relief Funds (CRF) and Elementary and Secondary
School Emergency Relief Fund (ESSER).
MDE states in their response to the finding that “the crux of this finding hinges on the erroneous assertion
that only one vendor was allowed to offer input on the specifications.” The finding acknowledges that
MDE provided evidence that three of the four vendors received the specifications in advance, but the
winning bidder received them 20 days in advance, while the remaining two vendors received them 7-8 days
in advance. Additionally, the specifications sent to the winning bidder were marked “draft” and redline
comments were added to the specifications by the winning bidder when they were returned to MDE. While
MDE did not adopt all of the winning bidder’s suggested modifications to the specifications, modifications
like the size of the needed laptop screens were adopted by MDE. MDE could provide no support that the
fourth bidder was given advance notice of the specifications.
Secondly, MDE asserts that the points assigned to the winning bidder for the “Devices” category hinged on
the guarantee that the devices would be delivered by the November 20, 2022 delivery timeline; however,
two other bidders with lower price points overall on devices also committed to having devices delivered no
later than November 20, 2022. In fact, bidders were told that that delivery by November 20, 2022 was a
requirement to bid on the RFQ. MDE did not describe why the bidders received the points that they did (as
stated in the finding), and their statement that it depended on delivery dates is not supported by the RFQs.
This type of discrepancy is the reason that the evaluations of RFQ’s should contain sufficient detailed
justification of points awarded.
Department of Education — Reporting — Material Weakness - Material Noncompliance
2021-035 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and
Transparency Act (FFATA) Requirements.
MDE states that they do not concur that FFATA information was entered timely or that no documentation
was maintained that could verify the information was entered; however, their response verifies that “MDE
is unable to demonstrate when the file was initially submitted...” Additionally, MDE has provided a
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corrective action plan to address the elements of the finding. OSA will review this corrective action in later
audits to determine if MDE has complied.”
Department of Education — Special Tests and Provisions — Significant Deficiency/Immaterial
Noncompliance
2021-038 Strengthen Controls to Ensure Compliance with Equitable Participation of Private
School Children Requirements.
MDE states that they do not believe this is a systemic problem with the program, but states that they do not
require supporting documentation in the application phase, and review those documents in the monitoring
phase of the grant process. There is a significant lag time between the application phase on the grant cycle
and MDE’s subrecipient monitoring. Due to this lag, errors in the Local Educational Agency (LEA’s)
documentation would not be identified timely, resulting in improper Title-I allocation. In addition, every
LEA is not selected for on-site monitoring each year. Not reviewing the LEA’s documentation prior to
approval could result in errors in the Title-I allocation that may not be identified timely or at all. MDE
should consider strengthening these controls to ensure the proper allocation of funds timely.
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Employment
Security (MDES) Management
Department of Employment Security — Activities Allowed/Allowable Costs - Material
Weakness/Material Noncompliance
2021-043 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities
Allowed for Coronavirus Relief Funds
Much of MDES’ argument that the questioned costs should be removed relies on Mississippi State Law
and disregards the requirements of the federal CRF grant. MDES asserts in their response that, because the
MS Legislature appropriated money to specific types of workforce development, that those expenditure
automatically became eligible for CRF funding. While the MS Legislature has the authority to appropriate
CRF money to certain types of workforce development, those items still must have met the three allowable
cost requirements of the CRF funds. State law authorizing equipment purchases cannot overrule the federal
program guidelines. MDES failed to document or perform adequate due diligence to ensure that the fixed
asset purchases made by their subrecipients met the grant requirements. These expenditures were not
properly justified with any cost comparison to ensure that the purchase was the most cost-effective solution.
Additionally, MDES could not provide any compelling evidence that these expenditures were necessary
due to the pandemic.
As stated in the finding, MDES could not provide documentation that the “student vouchers” paid for with
CRF monies were necessary due to the pandemic. MDES could not provide compelling evidence that these
students were new students, that they completed the courses, that the courses were able to benefit the
students in the workforce, or that they were even necessary due to the pandemic.
MDES’ assertion that extensive documentation has been provided to OSA to validate these purchases is
erroneous. MDES provided documentation to OSA, but that documentation did not support that the charges
were necessary or justified. The justifications for necessity in some instances was nonsensical, and did not
support that the purchases were necessary due to the pandemic. In the example noted by MDES in their
response, two lathes costing a total of $313,800 were purchased to assist with displaced internships. Those
two lathes served 22 students, for a per student price of $14,263. By fall of 2021, the internships had
resumed — meaning that the lathes were used for one semester. The college in question provided no
evidence that any other method of fulfilling the internships was considered, and no other options for a more
cost-effective solution rather than buying over $300,000 in fixed assets was contemplated. In a second
example given by MDES, the college purchased drones to assist in training drone pilots. MDES response
notes that drones are an emerging technology and that additional drone pilots will be needed by 2025;
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201
however, MDES does not provide any compelling justification as to why these drones and trained drone
pilots were necessary due to the pandemic.
Department of Employment Security - Eligibility - Material Weakness/Material
Noncompliance
2021-015 Strengthen Controls to Ensure Compliance with Eligibility Requirements for
Unemployment Insurance
The Office of the State Auditor (OSA) acknowledges that the Mississippi Department of Employment
Security (MDES) was faced with an unexpected and staggering task to ensure unemployment benefits were
paid to individuals during the pandemic. OSA also acknowledges that certain federal guidelines were
provided that MDES had to comply with in order to receive additional federal unemployment funds. While
MDES’ response to the finding focuses on the federal requirements and state guidance to waive or ignore
existing controls, MDES fails to identify any way that the agency mitigated any of the fraud risks or
potential for overpayments created by waiving or overriding these controls. This failure on the part of
MDES resulted in a 301% increase in known overpayments from fiscal year 2020 to 2021. This failure to
safeguard the state’s assets is the basis for the material weakness finding. Additionally, MDES fails to
acknowledge that the agency was required by the same type federal guidance referenced in their response
to the finding (UIPL Letters and Change Notices) to ensure adequate and proper fraud detection and
prevention techniques were being utilized by the agency.
Moreover, while MDES did receive federal guidance on making unemployment payments more accessible
to those directly impacted by the pandemic, the options provided by the federal government were to either
modify or suspend the work search requirements for individuals or employers directly impacted by COVID-
19 due to an illness in the workplace or direction from a public health official to isolate or quarantine
workers. States were also given the flexibility to respond to the COVID-19 emergency in a broader way,
if they chose to do so (emphasis added by auditor). (Unemployment Insurance Program Letter Number
13-20, Change 1, Attachment I, Question 2). MDES chose to suspend the requirement for all
unemployment claims, and not only those that arose from an illness in the workplace or from an order to
isolate or quarantine workers. The decision to implement broader flexibility and completely waive work
search requirements were made by MDES. By MDES’ own admission in other auditee responses to OSA,
MDES stated that they requested the Governor’s Office waive the specific requirements. Additionally, in
each Executive Order (1462, 1481, 1502, and 1510), MDES was given flexibility to reassess and modify
these measures prior to their expiration date in the orders.
Additionally, The Department of Labor (DOL) included program integrity language in all of the major
pieces of guidance associated with the state implementation of the CARES Act programs and provisions
(Unemployment Insurance Program Letter Number 28-20). Program Integrity requirements for the regular
unemployment program and unemployment programs authorized by the CARES Act were to operate in
tandem, and CARES Act program requires that states must ensure that only eligible individuals receive
benefits (Unemployment Insurance Program Letter Number 23-20). Both UIPL letters 23-20 and 28-20
specify that the states must make efforts to rapidly and proactively prevent, detect, and investigate
fraudulent activity; establish and recover fraud overpayments; and pursue criminal and civil prosecution to
deter fraud. Specifically, states were strongly encouraged to implement the following measures to minimize
fraud in the unemployment system:
1) Social Security Administration Cross Match
2) Systematic Alien Verification for Entitlement
3) Incarceration cross matches
4) Internet Protocol Address checks
5) Data Analytics to cross reference claims for indicators of fraud.
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Furthermore, many of the most effective tools to deter and detect fraud were available to MDES in the
Integrity Data Hub (IDH), and were available to states for well over a year. These included:
1) Interstate Suspicious Actor Repository to match claims across states
2) Foreign IP Address verification to receive flags on claims filed from IP addresses outside of
the United States
3) Data Analytic tools
4) Fraud Alert Systems
5) Identify Verification for fraud scoring information, including flagging synthetic identities.
MDES has stated that they utilize the IDH; however, auditors cannot determine how effectively these
programs were utilized considering the high amount of overpayments that were made during fiscal year
2021. Additionally, one of the specific fraud risks the UIPL, incarceration cross matches, were not
performed by MDES, and resulted in overpayments to incarcerated individuals. These incarcerated
individuals were able to apply for benefits when MDES overrode or turned off the automated controls and
did not implement any compensating controls to ensure payments were proper.
In summary, regardless of the federal requirements or Executive Orders issued, MDES is still responsible
for ensuring the accuracy of unemployment claims. In order to assure the accuracy of those claims, MDES
should have implemented compensating controls to safeguard the unemployment trust fund when other
controls were waived or overrode. The ultimate responsibility to ensure that unemployment payments were
accurately paid out and that overpayments were kept to a minimum is the responsibility of MDES personnel.
Department of Employment Security - Subrecipient Monitoring - Material
Weakness/Material Noncompliance
2021-045 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements
When documentation of pre-award risk assessments was requested during the audit process, MDES did not
provide any auditable documentation to the auditors. While MDES stated that they relied upon the same
pre-award risk assessment for the CRF grants as the Workforce Innovation and Opportunity Act (WIOA)
grants, none of the WIOA pre-award risk assessments were provided. Personnel at MDES stated, when
this documentation was requested, that “there was no risk assessment of the four local areas performed prior
to the awarding of the CRF funds...We work closely with the local areas on a daily basis, perform yearly
subrecipient monitoring, and regularly conduct technical assistance all of which are closely monitored by
MDES management for any indication that we should reassess the locals as anything but low risk. We
understand that this is not documented and therefore does not meet the risk assessment requirement but
wanted to give the context of our actions.”
MDES appears to concur that they did not provide documented evidence to auditors that all required grant
elements were presented to grantees. It should be noted that this evidence has still not been provided to
auditors as of the date of this report.
Lastly, the questioned costs as outlined in finding 2021-043 verify that MDES did not have proper
monitoring procedures in place to monitor subrecipients of the CRF grant program. MDES disagrees that
these costs should be questioned (as noted in their response to finding 2021-043); therefore, they do not
concur that their monitoring procedures and controls failed. OSA has explained, in detail, both in finding
2021-043 and in the rebuttal to MDES’ response above why the auditor questioned these expenses. Please
refer to finding 2021-043 for further information.
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203
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Emergency Management
Agency (MEMA)
MEMA - Activities Allowed/Allowable Costs - Material Weakness/Material Noncompliance
2021-046 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities Allowed
Requirements for Coronavirus Relief Funds.
MEMA’s provided analysis of the rent vs. purchase option was only provided after the initial finding was
presented to Management. When the analysis was examined, auditors determined that it relied on
inaccurate underlying data. The analysis provided that it would cost $2,059,200 to lease storage facilities
in one year. However, this number was calculated by taking the current price of one warehouse that housed
25% of the materials and extrapolating it to encompass a price for 100% of the materials. The storage cost
of this facility was $42,900. MEMA also presented emails illustrating that there was a warehouse available
to rent that supplied half of the needed space for $30,000 a month for rent, and another facility for a fourth
of the needed space for $5,000 a month. If extrapolations were made with this data, even if using the more
expensive building as the base data, the cost of leasing the building for two years would come to $1,440,000,
which is almost a million less than the initial cost of the building.
Moreover, the analysis provided by MEMA does not consider the additional costs that were associated with
the State Emergency Logistical Operations Center (SELOC) building to prepare the building for initial use.
These costs amounted to at least $518,042 in additional costs. Lastly, the analysis does not factor in that
the building MEMA used for extrapolation is not a storage facility, but a nationwide distribution center that
also charged for pallet rental, the cost of moving pallets in and out, etc. Additionally, the rental cost of the
Gulf Relay facility varied from month to month based on these expenditures and the amount of storage
utilized. The prices varied from approximately $27,000 monthly to $50,000 monthly.
It appears to the auditor that MEMA used data in their analysis that would lead to the conclusion to purchase
the building, rather than to let the analysis dictate the most cost effective option. While MEMA may argue
that the building purchase was a better long term business decision for the agency, the purpose of the
Coronavirus Relief Funds (CRF) was to provide immediate relief for the pandemic and not provide long
term business solutions.
MEMA’s supporting documentation mainly relied on Mississippi State Law to validate the purchase of the
building, stating that the Legislature allowed them to purchase the building via legislation that was passed
during the fiscal year 2020 legislative session; however, state law cannot supplant federal law in regards to
a federal grant.
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It should be reiterated that MEMA publicly stated that this facility was for future pandemics, and a
permanent office space for the procurement staff of MEMA, thereby verifying its intended use and purpose
extended past the period of performance.
MEMA - Subrecipient Monitoring - Material Weakness/Material Noncompliance
2021-047 Strengthen Controls to Ensure Terms and Conditions are stated in Subrecipient Subaward
Documents.
MEMA’s argument in their response relies on the fact that the MS Legislature appropriated CRF funds for
state program called “MERP”. The program was designed to provide CRF monies to the counties and
municipalities in Mississippi. Regardless of the appropriation of the Legislature, MEMA is still required
to follow subrecipient monitoring regulations as outlined in Uniform Grant Guidance, as required by the
Department of the Treasury.
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206
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
PART 3 —- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
U.S. DEPARTMENT OF VETERAN AFFAIRS
Finding Number Finding and Recommendation
MISSISSIPPI VETERANS AFFAIRS
Reporting
Material Weakness
Material Noncompliance
2021-051 Strengthen Controls Over the Preparation, Recording, and Review of the
Schedule of Expenditures of Federal Awards.
ALN Number 64.015 Veterans State Nursing Home Care
Federal Award No. N/A
Pass-through Entity N/A
Questioned Costs Unable to determine due to disclaimer audit opinion.
Criteria The Code of Federal Regulations (2 cfr §200.510(b)) states, in part “the auditee
must prepare a schedule of expenditures of federal awards for the period covered
by the auditee's financial statements which must include the total Federal awards
expended as determined in accordance with §200.502.”
Code of Federal Regulations (2 cfr §200.502(a)) states, in part, “the determination
of when a federal award is expended must be based on when the activity related to
the Federal award occurs.”
The Internal Control — Integrated Framework, published by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and the U.S.
Government Accountability Office Standards for Internal Control in the Federal
Government (Green Book) specify that a satisfactory control environment is only
effective when there are adequate control activities in place. Effective control
activities dictate that a review is performed to verify the accuracy and
completeness of financial information reported. The Federal Grant Activity
Schedule captures amounts that must be accurate and complete in order to ensure
the accuracy of financial and federal information reported on such schedule to
verify the accuracy and completeness of financial information reported.
The Mississippi Agency Accounting Policies and Procedures (MAAPP) manual
Section 27.30.60 states, “The Federal Grant Activity schedule supports amounts
207
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of VA (continued)
Condition
Cause
Effect
Recommendation
Repeat Finding
Statistically Valid
reported on the GAAP packet for federal grant revenues, receivables, deferred
revenues and expenditures. The schedule is also used for preparing the Single
Audit Report required by the Single Audit Act, Office of Management and Budget
Uniform Grant Guidance and the State’s audit requirements. The amounts on this
schedule should be reconciled by the agency with amounts reported on federal
financial reports.”
During the audit of Mississippi Veterans Affairs (MVA) for fiscal year ended June
30, 2021, auditors noted that MVA recorded expenditures provided did not agree
to the amounts in the statewide accounting system, the Mississippi Accountability
System for Government Information and Collaboration (MAGIC).
The statewide SEFA is prepared using agency prepared grant schedule activity
reports, and a system of internal controls exists to ensure all federal monies are
included in the SEFA and that all agencies that have federal monies prepare grant
schedules. By making adjustments to the MVA accounting records without making
adjustments to MAGIC or notifying the DFA, MVA inadvertently circumvented
the control system and DFA was not alerted to the need for adjustment to the
amount of the funds in the SEFA.
Due to the designation as a Major Program under Uniform Grant Guidance Subpart
F, MVA required an audit for fiscal year 2021. MVA prepared and submitted grant
information to the auditors that did not agree to the DFA SEFA.
MVA could not reasonably justify the expenditures reported on the grant schedule,
nor could they produce supporting documentation of such expenditures. Due to
this inability to support which expenditures were paid with grant funds, and an
inability to separate allowable costs in the from unallowable costs, auditors could
not determine, with any reasonable accuracy, what the questioned costs are from
the grant; therefore, auditors were overall unable to audit the 64.015 grant funds.
Management at MVA is relatively new and made adjustments to internal
expenditures without communication to SFA and the need to adjust the SEFA.
Failure to properly communicate corrections to expenditures be included correctly
in MAGIC and that the SEFA so that it with the underlying financial records could
result inaccurate reporting to both the state and federal oversight organizations.
We recommend Mississippi Veterans Affairs strengthen controls over the
preparation and review of the Schedule of Expenditures of Federal Awards to
ensure all grant award information and amounts reported are accurate and
correct, and that the information agrees with the underlying financial records.
Yes.
N/A
208
STATE OF MISSISSIPPI
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
PART 3 — Federal Award Findings and Questioned Costs — US Dept of VA (continued)
View of Responsible
Officials Management at the Mississippi Veterans Affairs concurs with this finding.
See additional comments in the Corrective Action Plan on page 341 of this
audit report.
209
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I. SUMMARY SCHEDULE OF PRIOR
FEDERAL AUDIT FINDINGS
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STATE OF MISSISSIPPI
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2021
Instructions to Management
Each state grantee agency included in the prior year Single Audit Report for the State of Mississippi prepared a
summary schedule of prior federal audit findings as required by OMB Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200, Section 5.11. In order to provide a
systematic approach for reporting, agencies were asked to follow the format listed below.
For each prior year federal audit finding, the agency should include the following: (1) finding identification
including finding number, finding heading, Assistance Listing Number (ALN) and program name, (2) current
status, and (3) planned corrective action, if required. These items are discussed below:
(1)
(2)
(3)
Each finding number, finding heading, ALN and program name should be listed in the same
sequence as presented in the prior year Single Audit Report.
The current status should be identified with one of the following terms:
a. “Fully Corrected” - All corrective action has been taken.
b. “Partially Corrected” - Some, but not all, corrective action has been taken.
c. “Not Corrected” - Corrective action has not been taken.
d. “Not Valid” - Finding is no longer valid and does not warrant further action.
Corrective action should be noted for findings that are not identified as “Fully Corrected.”
a. When audit findings are “Partially Corrected” or “Not Corrected,” describe the planned
corrective action as well as any partial corrective action taken.
b. When audit findings are “Not Valid,” describe the reasons the findings are no longer
considered valid or do not warrant further action.
211
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STATE OF MISSISSIPPI
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2021
INDEX LISTED BY FINDING NUMBER
FINDING PAGE
NUMBER STATE GRANTEE AGENCY NAME NUMBER
2020-012 Department of Education 215
2020-032 Department of Education 215
2020-033" Department of Education 215
2020-005 Department of Employment Security 217
2020-006 Department of Employment Security 217
2020-007 Department of Employment Security 217
2020-036°° Department of Employment Security 217
2020-037 Department of Health 219
2020-038 Department of Health 219
2020-039 Department of Health 219
2020-024 Department of Human Services 221
2020-025 Department of Human Services 222
2020-026 Department of Human Services 223
2020-027 Department of Human Services 223
*a The agency indicates the finding is partially corrected; finding 2021-036 was written to report current year
problems noted.
*b The agency indicates the finding is partially corrected; finding 2021-037 was written to report current year
problems noted.
*c The agency indicates the finding is fully corrected; finding 2021-015 was written to report current year
problems noted.
213
Summary of Prior Year Status
Continued
2020-028 Department of Human Services 223
2020-029 Department of Human Services 224
2020-0304 Department of Human Services 224
2020-031°° | Department of Human Services 225
2020-034" Department of Transportation 227
2020-035 Department of Transportation 227
2020-011 Division of Medicaid 229
2020-041" — Division of Medicaid 229
2020-042" _ Division of Medicaid 229
2020-043" — Division of Medicaid 230
2020-044 Division of Medicaid 231
2020-045 Division of Medicaid 231
2020-046 Division of Medicaid 231
2020-023 MS Emergency Management Agency 233
2020-0407 MS Veterans Affairs 237
*d The agency indicates the finding is fully corrected; finding 2021-013 was written to report current year
problems noted.
*e The agency indicates the finding is fully corrected; finding 2021-014 was written to report current year
problems noted.
*f The agency indicates the finding is fully corrected; finding 2021-020 was written to report current year
problems noted.
*g The agency indicates the finding is partially corrected; finding 2021-039 was written to report current year
problems noted.
*h The agency indicates the finding is partially corrected; finding 2021-041 was written to report current year
problems noted.
*; The agency indicates the finding is partially corrected; finding 2021-042 was written to report current year -
problems noted.
*; The agency indicates the finding is fully corrected; finding 2021-051 was written to report current year
problems noted.
214
2020-012
2020-032
2020-033
MISSISSIPPI DEPARTMENT OF EDUCATION
Carey M. Wright, Ed.D.
State Superintendent of Education
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the Year Ended June 30, 2020
Strengthen Controls Over the Preparation of the Federal Grant Activity Schedule
PARTIALLY CORRECTED
Processes have been put in place to strengthen the controls over the preparation and review of
the Schedule of Federal Awards and Subgrant Schedule.
Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements.
CFDA #84.010 Title I-Grants to Local Education Agencies
CFDA #84.367 Title Il-Supporting Effective Instruction State Grants
PARTIALLY CORRECTED
The MDE has revised its Consolidated Federal Programs Monitoring Process and Protocol that
will be implemented for FY2022 Monitoring (SY2020-2021). As noted in the Corrective Action
Plan, the full corrective action will be completed by June 30, 2022. Because the FY20 Single
Audit finding is related to the FY2019 Monitoring (SY2017-2018), evidence of implementation of
the corrective action will be a part of the FY23 Single Audit.
Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements
for Special Education Cluster Programs
CFDA #84.027 Special Education-Grants to States (IDEA, Part B)
CFDA #84.173 Special Education-Preschool Grants (IDEA, Preschool)
PARTIALLY CORRECTED
The MDE has strengthened and revised the IDEA Monitoring Process and Protocol that will be
piloted for FY2022 Monitoring (SY2020-2021). As noted in the Corrective Action Plan, the full
corrective action will be completed by June 30, 2022. Because the FY20 Single Audit finding is
related to the FY2019 Monitoring (SY2017-2018), evidence of implementation of the corrective
action will be a part of the FY23 Single Audit.
POST OFFICE BOX 771 ¢ JACKSON, MISSISSIPPI 39205 ¢ (601) 359-3512 ¢ FAX (601) 359-3242
215
Carey M. Wright, Ed.D.
State Superintendent of Education
Signed:
Date: 12/21/2021
216
DocuSign Envelope ID: 6C985FA7-C5B6-4BB5-B8E2-0E4C7BFC7DD3
2020-005
2020-006
2020-007
2020-036
Date: L0/16/2022
Mississippi Department of Employment Security
Tate Reeves
Governor
Robin Stewart
Interim Executive Director
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the Year Ended June 30, 2021
Controls Should Be Strengthened over MAGIC segregation of Duties and
Quarterly Access Review
CFDA # 17.225Unemployment Insurance
Fully Corrected
Controls Should Be Strengthened over the Reconciliation of MAGIC to
ReEmployMS
CFDA # 17.225 Unemployment Insurance
Fully Corrected
Controls Should Be Strengthened over Unemployment Insurance Benefits
Paid
CFDA # 17.225 Unemployment Insurance
Fully Corrected
Controls to Ensure Compliance with Eligibility Requirements
CFDA # 17.225 Unemployment Insurance
Fully Corrected
DocuSigned by:
Title: Int E
‘ Stewert, Seputy Eyecutine Qrector (Agency Head)
Helping Mississippians Get Jobs
Henry J. Kirksey Building ¢ 1235 Echelon Parkway e Jackson, Mississippi 39213
Post Office Box 1699 ¢ Jackson, Mississippi 39215-1699 © (601) 321-6000
MDES is an Equal Employment Opportunity Employer
217
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MISSISSIPPI STATE DEPARTMENT OF HEALTH
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the Year Ended June 30, 2021
2020-037 Strengthen Controls to Ensure Compliance with Procurement, Suspension, and Debarment
Requirements.
10.557 Special Nutritional Assistance program for Women, Infants, and Children
(WIC)
FULLY CORRECTED
2020-038 Strengthen Controls to Ensure the Schedule of Federal Expenditures is Prepared with Proper
and Accurate Information and that Federal Reporting Agrees with the Underlying Financial
Records of the Agency.
10.557 Special Nutritional Assistance program for Women, Infants, and Children
(WIC)
93.268 Immunization Cooperative Agreements
FULLY CORRECTED
2020-039 Strengthen Controls Over Documentation to Ensure Compliance with Eligibility Requirements.
10.557 Special Nutritional Assistance program for Women, Infants, and Children
(WIC)
FULLY CORRECTED
DocuSigned by:
Shave Dowdy Date: 1/9/2022 | 7:11 AM cst
Snaron Doway, UrA, CFE, CPM
Chief Administrative Officer / Chief Financial Officer
DocuSigned by:
Dawricl Ehury, Mf) Date: 22/9/2022 | 9:07 AM cst
C1E0259F EESA424...
State Health Officer
Signed
Signe
570 East Woodrow Wilson Post Office Box 1700 Jackson, MS 39215-1700
1-866-HLTHY4U www.HealthyMS.com
Equal Opportunity in Employment/Services
219
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DocuSign Envelope ID: A67917FF-D4F5-40C7-91DE-B177935BB91C
Robert G. Anderson
Executive Director
|
MISSISSIPP! DEPARTMENT OF HUMAN SERVICES
Shad White, State Auditor October 4, 2021
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
Dear Auditor White:
Enclosed for your review is the agency's Summary Schedule of Prior Federal Audit Findings for State
Fiscal Year ending on June 30, 2020.
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the Year Ended on June 30, 2020
2020-024 Strengthen Controls to Ensure Compliance with Subrecipient Allowable Cost
Activities of the Supplemental Nutrition Assistance Program (SNAP), Child
Care and Development Block Grant (CCDF), and Temporary Assistance for
Needy Families (TANF) Programs.
CFDA Number: 10.551 Supplemental Nutrition Assistance Program (SNAP)
10.561 State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program (SNAP)
93.558 Temporary Assistance for Needy Families (TANF)
93.575 Child Care and Development Block Grant (CCDF)
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund (CCDF)
93.667 Social Services Block Grant (SSBG)
MDHS Response: FULLY CORRECTED.
1) Strengthen existing controls to ensure non-compliance with federal
regulations does not continue.
a. MDHS provided the following trainings to MDHS employees with
most occurring after former Executive Director JD was no longer
associated with MDHS: initial purchasing process training, follow-up
purchasing process training, subgrantee training for TANF
subgrantees, procurement training for division directors, budgets
training, fact sheet training, internal Budgets and Accounting training
that included DFA training with contract, payroll, accounts payable
and account receivable units, internal audit training on identifying and
conducting risk assessments for the division directors and other
trainings. Additionally, MDHS has strengthen procedures concerning
tracking procurement requests, invoices, travel costs, and bank
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DocuSign Envelope ID: A67917FF-D4F5-40C7-91DE-B177935BB91C
Robert G. Anderson
Executive Director
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MISSISSIPP! DEPARTMENT OF HUMAN SERVICES
reconciliations. MDHS also published an Internal Audit Plan for 2021
to regularly audit higher risks in the agency. An audit plan will be
conducted on annual basis.
2) Procure adequate and appropriate training for all staff who are involved in any
federal allowable costs and activities allowed monitoring:
a. Effective May 1, 2020, MDHS established an Office of Compliance,
which have both an internal compliance function and an external
compliance function. Part of the role of the new Office of Compliance
is to educate subrecipients regarding the monitoring review process
including allowable cost and activities allowed by them under their
subgrant agreement and existing state and federal regulations. The
Office of Compliance has updated standard operating procedures and
implemented a team approach to the review of subgrantee findings.
The Office of Compliance has also assumed responsibility for the
quality control functions involving subrecipients in those programs
while OIG focuses on internal audits, investigations, benefit recovery
and administrative hearings.
3) Increase awareness and training to subrecipients of allowable costs and
activities.
a. Complete revision of the Subgrant Manual that includes MDHS
approval of lower-tiered subrecipients, allow sixty-day cash advance
with cost reimbursement thereafter only after submission of monthly
general ledgers and supporting documentation. Internal risk
assessment will be performed on all subgrantees to identify high,
medium, or low risk. If a subgrantee is considered a high risk, then
Monitoring performs a technical assistant visit. Furthermore,
competitive procurement procedures will be used for TANF
subgrants. Lastly, an MDHS subgrantee is required to attend an annual
training performed by MDHS or partners.
2020-025 Strengthen Controls to Ensure Compliance with Allowable Cost Requirement
of the TANF Program.
CFDA Number: 93.558 Temporary Assistance for Needy Families (TANF)
MDHS Response: FULLY CORRECTED.
1) Corrective Action Plan: Subrecipient 1, Subrecipient 2, and Subrecipient 3.
a. MDHS provided the following trainings to MDHS employees with
most occurring after former Executive Director JD was no longer
associated with MDHS: initial purchasing process training, follow-up
purchasing process training, subgrantee training for TANF
subgrantees, procurement training for division directors, budgets
training, fact sheet training, internal Budgets and Accounting training
that included DFA training with contract, payroll, accounts payable
and account receivable units, internal audit training on identifying and
conducting risk assessments for the division directors and other
trainings. Additionally, MDHS has strengthen procedures concerning
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DocuSign Envelope ID: A67917FF-D4F5-40C7-91DE-B177935BB91C
MDHS
MISSISSIPP! DEPARTMENT OF HUMAN SERVICES
2020-026
CFDA Number:
MDHS Response:
2020-027
CFDA Number:
MDHS Response:
2020-028
CFDA Number:
MDHS Response:
Robert G. Anderson
Executive Director
tracking procurement requests, invoices, travel costs, and bank
reconciliations. MDHS also published an Internal Audit Plan for 2021
to regularly audit higher risks in the agency. An audit plan will be
conducted on annual basis.
Strengthen Controls to Ensure Compliance with Cash Management
Requirements of the TANF program.
93.558 Temporary Assistance for Needy Families (TANF)
FULLY CORRECTED.
MDHS is not currently paying any subgrantees using Matching Funds, and all
subgrantees are paid using a cost reimbursement model, not cash advance.
Furthermore, all subgrantees are also required to complete a program report and
submit with each claim reimbursement.
Strengthen Controls to Ensure Compliance with Matching Requirements of
the CCDF Cluster.
93.575 Child Care and Development Block Grant (CCDF)
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund (CCDF)
FULLY CORRECTED.
The CCDF Cluster enters into subgrant agreements, also called slot agreements
under an RFP issued in 2015. The agreements require a 25% match, which may
be met by an in-kind match. DECCD will request supporting documentation
from the current slot providers. The slot agreements expired on August 31, 2020,
and the program did not issue new slot programs. All subgrantees are paid using
a cost reimbursement model, not cash advance. Furthermore, all subgrantees are
also required to complete a program report and submit with each claim
reimbursement.
Strengthen Controls to Ensure Compliance with the Period of Performance
for the CCDF Program.
93.575 Child Care and Development Block Grant (CCDF)
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund (CCDF)
FULLY CORRECTED.
Correspondence is sent to all subgrants that fit this category that new procedures
will be implemented concerning subgrantee closeouts to be submitted in a shorter
timeframe for the agency to adequately meet liquidation period. Also, please also
refer to MDHS response in 2020-024 on all measures already taken by MDHS and
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Robert G. Anderson
Executive Director
MISSISSIPP! DEPARTMENT OF HUMAN SERVICES
all future corrective actions.
2020-029 Controls Should Be Strengthened Over Procurement Policies for the
Awarding of Subgrants and Contracts for the TANF Program.
CFDA Number: 93.558 Temporary Assistance for Needy Families (TANF)
MDHS Response: FULLY CORRECTED.
MDHS provides individual scoresheets for each subrecipient that submitted a
proposal in response to the TANF. Each subrecipient scoresheet reflects consensus
scoring and comments by the committee members. Consensus scoring operated
within the committee meeting whereby each committee member offered their
proposed response to each requirement to collectively arrive at a consensus score
for that requirement which also included the committee’s comment for that
requirement.
Since the 2019 TANF RFP, MDHS refined the TANF RFP process to reflect
individual evaluator scores that factor into the consensus scoring for the TANF
RFP specifications and requirements therein. The evaluation committee completes
scoring and provides a recommendation for award to MDHS Executive Director.
Further, since the 2019 TANF RFP, the MDHS Executive Director is not involved
in the evaluation, scoring, or award recommendation process for potential TANF
subgrant agreements.
MDHS implemented and reinforced use of the Administrative Review
Memorandum (ARM) process for appropriate reviews of MDHS agreements
before executing and entering into agreements or modifications/amendments.
Prior to processing an agreement through the ARM process, MDHS requires and
utilizes an Initiation Process (IP) for review and approval of a proposed/anticipated
agreement. The Initiation Process requires internal review of the project
(proposed/anticipated agreement) from a procurement, finance, and executive
level perspective. Through the ARM process, an agreement is reviewed at the
MDHS Division level, Procurement level, Finance level, Compliance level, Legal
(Attorney General), and Executive Level. Signature approval at each level is
required for MDHS to enter into an agreement. This multiple level review is
designed to allow respective Agency stakeholders to assess a proposed agreement
as a system of checks and balances to ensure the agreement aligns with Agency
policy as well as governing laws, rules, and regulations.
2020-030 Strengthen Controls over On-Site Monitoring for the Supplemental Nutrition
Assistance Program (SNAP), Temporary Assistance for Needy Families
(TANF), Child Care and Development Block Grant (CCDF), Low Income
Home Energy Assistance Program (LIHEAP), and Social Services Block
Grant (SSBG) Programs.
CFDA Number: 10.551 Supplemental Nutrition Assistance Program (SNAP)
93.558 Temporary Assistance for Needy Families (TANF)
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Robert G. Anderson
Executive Director
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MISSISSIPP! DEPARTMENT OF HUMAN SERVICES
93.667 Social Services Block Grant (SSBG)
93.575 Child Care and Development Block Grant (CCDF)
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund (CCDF)
93.568 Low Income Home Energy Assistance Program (LIHEAP)
MDHS Response: FULLY CORRECTED.
Effective May 1, 2020, MDHS established an Office of Compliance, which have
both an internal compliance function and an external compliance function. Part of
the role of the new Office of Compliance is to educate subrecipients regarding the
monitoring review process including allowable cost and activities allowed by them
under their subgrant agreement and existing state and federal regulations. The
Office of Compliance has updated standard operating procedures and implemented
a team approach to the review of subgrantee findings. The Office of Compliance
has also assumed responsibility for the quality control functions involving
subrecipients in those programs while OIG focuses on internal audits,
investigations, benefit recovery and administrative hearings.
2020-031 Strengthen Controls Over Subrecipient Monitoring to Ensure Compliance
with OMB Uniform Guidance Auditing Requirements.
CFDA Number: 10.551 Supplemental Nutrition Assistance Program (SNAP)
93.558 Temporary Assistance for Needy Families (TANF)
93.667 Social Services Block Grant (SSBG)
93.575 Child Care and Development Block Grant (CCDF)
93.596 Child Care Mandatory and Matching Funds of the Child Care and
Development Fund (CCDF)
93.568 Low Income Home Energy Assistance Program (LIHEAP)
MDHS Response: FULLY CORRECTED.
Effective May 1, 2020, MDHS established an Office of Compliance, which have
both an internal compliance function and an external compliance function. Part of
the role of the new Office of Compliance is to educate subrecipients regarding the
monitoring review process including allowable cost and activities allowed by them
under their subgrant agreement and existing state and federal regulations. The
Office of Compliance has updated standard operating procedures and implemented
a team approach to the review of subgrantee findings. The Office of Compliance
has also assumed responsibility for the quality control functions involving
subrecipients in those programs while OIG focuses on internal audits,
investigations, benefit recovery and administrative hearings.
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Robert G. Anderson
Executive Director
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MISSISSIPPI DEPARTMENT OF HUMAN SERVICES
We appreciate the courtesy and professionalism demonstrated by Emily Mathis and her field staff
throughout the audit. Should you have any questions regarding our responses or corrective action plan,
please do not hesitate to contact Hadley Eisenberger, Inspector General, at 601-359-4939.
Respectfully,
DocuSigned by:
Robert G. Anderson
Executive Director
226
Brian D. Ratliff
Deputy Executive Director/Chief Engineer
Lisa M. Hancock
Deputy Executive Director/Administration
Charles R. Carr
Director, Office of Intermodal Planning
Brad White
Executive Director
PO. Box 1850
Jackson, MS 39215-1850
Telephone (601) 359-7249
FAX (601) 359-7050
GoMDOT.com
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the year ended June 30, 2021
2020-034 Strengthen Controls to Ensure Compliance with Wage Rate Requirements
CFDA # 20.205 Highway Planning and Construction
FULLY CORRECTED
2020-035 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements
CFDA # 20.205 Highway Planning and Construction
FULLY CORRECTED
Signed: SLE
Brad White
Executive Director
Transportation: The Driving Force of a Strong Economy
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OFFICE OF THE GOVERNOR
Walter Sillers Building | 550 High Street, Suite 1000 | Jackson, Mississippi 39201
MISSISSIPPI! DIVISION OF
MEDICAID
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the Year Ended June 30, 2021
2020-011 Strengthen Controls Over the Preparation and Review of the Schedule of
Expenditures of Federal Awards and Estimated Claims Payable
FULLY CORRECTED
2020-041 Strengthen Controls to Ensure Compliance with the Allowable Cost Requirements
of the Children’s Health Insurance Program (CHIP)
93.767 Children’s Health Insurance Program (CHIP)
PARTIALLY CORRECTED
DOM provided its fiscal agent with the updated household size and FPL limits
used for the CHIP co-payment determinations in July 2021. The fiscal agent
completed the required updates and notified DOM that the updates were
completed. DOM Information Technology (iTech) staff assigned to the Eligibility
Program Area verified the update for completeness and accuracy. DOM has
opened a change of service request (CSR) to ensure the wholesale change process
(WCP) contains all the required updates, including automation of the calculation
of the table/values needed for CHIP co-payment determinations. CHIP co-pay
testing will be part of the annual testing done by the iTech Program Area each
March prior to the production run sent to the fiscal agent.
The next Wholesale Change involving the CHIP co-pay tables will be March
2022. The CHIP FPL information was emailed to the vendor on January 28, 2022.
2020-042 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the
Medical Assistance Program and the Children’s Health Insurance Program
(CHIP)
93.767 Children’s Health Insurance Program (CHIP)
93.778 Medical Assistance Program (Medicaid, Title XIX)
PARTIALLY CORRECTED
Toll-free 800-421-2408 | Phone 601-359-6050 | Fax 601-359-6294 | medicaid.ms.gov
Responsibly providing access to quality health coverage for vulnerable Mississippians
229
2020-043
Currently, DOM is following approved guidelines and has sufficient controls in
place, which include ongoing and periodic training, as necessary. However, DOM
continues to pursue statutory authority to access Mississippi Department of
Revenue tax information and is still awaiting IRS approval for access to federal
tax data.
Beginning in July 2021, DOM’s third-party vendor changed the criteria used to
pull individuals into the outgoing request file sent to MDES for income
verification and began working on an automated verification to DOM when the
outgoing request file was sent to MDES and another when the MDES response
file was received by the vendor. Currently, DOM’s vendor and MDES are using
Move It to send these notifications to DOM.
In July 2021, Eligibility staff received additional training regarding eligibility
requirements and the proper handling of wages and family additions. Further, the
third-party vendor began working on a system change to alert the case worker of
certain client file changes and to include asset checks within the system
processing workflow to eliminate the manual request process and facilitate asset
verification through AVS. These system changes are in process.
DOM’s vendor removed all parameters from the outgoing PARIS file beginning
with the quarterly August 2021 file. Currently, MDHS sends email verification
related to file submission to the vendor and specific DOM staff.
Strengthen Controls to Ensure Compliance with the Provider Eligibility
Requirements of the Children’s Health Insurance Program CHIP
93.767 Children’s Health Insurance Program (CHIP)
PARTIALLY CORRECTED
DOM continues to work with the vendor to design, develop, and implement the
new integrated credentialing system and plans to begin the new process prior to
the end of State Fiscal Year 2022. Prior to the implementation of the centralized
credentialing program, DOM has created a process to verify providers who are
enrolled in both the Medicaid and CHIP programs to ensure that the disclosure
forms and screenings are limited to DOM capturing this information.
Prior to the 2021 EQRO reviews, DOM requested that the review schedule be
adjusted to ensure that the comprehensive report is finalized by April 30th
annually to comply with federal regulations.
230
2020-044
2020-045
2020-046
Strengthen Controls to Ensure Compliance with Utilization Control and Program
Integrity Requirements
93.778 Medical Assistance Program (Medicaid, Title XIX)
FULLY CORRECTED
Strengthen Controls to Ensure Compliance with Automatic Data Processing (ADP)
Risk Analysis and Security Review Requirements
93.778 Medical Assistance Program (Medicaid, Title XIX)
FULLY CORRECTED
Ensure Compliance with Medicaid National Correct Coding Initiative (NCCT)
Confidentially Agreement Requirements
93.778 Medical Assistance Program (Medicaid, Title XIX)
FULLY CORRECTED
Drew Snyder, Executi¥é Director
Date: 2/23/ 22
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State of Mississippi
TATE REEVES
Governor
MISSISSIPPI] EMERGENCY MANAGEMENT AGENCY
STEPHEN C. McCRANEY
EXECUTIVE DIRECTOR
SUMMARY SCHEDULE OF PRIOR FEDERAL AUDIT FINDINGS
For the Year Ended June 30, 2021
2020-023 Strengthened Controls to Ensure Compliance over Subrecipient Monitoring
Requirements.
CFDA # 97.036 — Disaster Grants — Public Assistance Program
FULLY CORRECTED ~— See attached documentation from FEMA.
Stephen C. McCraney, Executive Director
Date: JO SC ZO? QZ.
POST OFFICE BOX 5644 * PEARL, MISSISSIPPI 39288-5644 + PHONE: 601-933-MEMA
EMERGENCY 1-800-222-6362 (24 HOUR)
TDD 1-800-445-6362
233
U.S. Department of Homeland Security
Washington, DC 20472
FEMA
January 31, 2022
Ms. Shondra Barker
Director of Financial Reporting
State of Mississippi
PO Box 1060
Jackson, MS 39215
Subject: Management Decision Letter — Single Audit Report for the year ending June 30, 2020
EIN: 64-6000749
FEMA CFDA No.: 97.039
Number of Audit Findings: 1 (2020-023)
Number of Recurring Findings: 1 (2019-025)
Amount of Questioned and/or Disallowed Costs: None
Status of Audit Record: Closed
Dear Ms. Barker,
The FEMA Grant Programs Directorate reviewed the subject report that includes Finding 2020-023 and
determined that the State of Mississippi Emergency Management Agency has successfully implemented
the corrective actions outlined in the above referenced Management Decision Letter. The finding for
deficiency 2020-023 is now closed.
If you have any questions, please contact Kertz Hare, Acting Grants Business Branch Chief at (404)
909-1600 or via email at Kertz. Hare@fema.dhs.gov and FEMA-R4-Singleaudit@fema.dhs. gov.
Sincerely,
Elton A. Newton
Division Director
Grant Management Division
DHS/FEMA
Attachment: Discussion of Findings and Recommendations
www.fema.gov
234
Mississippi Emergency
Management Agency 2020 Single Audit
Audit Finding: 2020-023
CFDA Number: 97.039
Sustained: Yes
Amount of Questioned Costs: N/A
Amount Disallowed: None
Status of Audit Finding: Closed
Recommendation: We recommend the Mississippi Emergency Management
Agency strengthen controls over subrecipient monitoring to
ensure recipients expending $750,000 or more in Federal funds
their fiscal year are appropriately monitored and an audit is
obtained. In addition, we recommend internal policies and
procedures be implemented over the audit tool used to monitor
subrecipients to ensure completeness of subrecipients requiring
an audit.
Management at the Mississippi Emergency Management
Management Action: Agency concurs with this finding. MEMA is currently in the
process of implementing new procedures and process for
compliance with the Code of Federal Regulations 2 CFR 200
Subpart F, audit requirements. The Agency is dedicated to
building a stronger reporting and monitoring system for Single
Audits. The Accounting and Finance Office will monitor and
review all Single Audits.
Support Services will work with all offices within the Agency to
ensure the correct data is captured and will review all documents
that are sent out addressing Single Audit requirements.
FEMA Management This audit deficiency is closed.
Decision:
We reviewed the agency’s process for monitoring subrecipients
and Single Audit reports. MEMA has provided evidence of
updated policies and procedures for Subrecipient Monitoring
with an authorized date signed by the GAR as of 4/2021.
MEMA has implemented a process to send notifications of audit
requirement to subrecipients for Single Audits at the beginning
of the fiscal year. They have established a tracking tool to
monitor receipt of Single Audit reports and communication from
235
subrecipients. The tracking log list the outstanding audits
with follow ups, actions taken, dates and deadlines. Evidence
has been provided of supervisory oversight and review. These
changes complete their corrective action plan for this audit
finding. FEMA will follow up through Site visit/Desk review to
ensure compliance is maintained. This deficiency is closed, no
further action necessary.
Contact: Shakima Hinnant
Shakima.Hinnant@fema.dhs.gov
This was a Repeat Finding from prior year 2018-025.
Appeal Information:
The decision or parts therein may be appealed. A written appeal
will be accepted at EltonAndrew.Newton@fema.dhs.gov and
fema-r4-singleaudit@fema.dhs.gov within 10 business days from
the date of this letter. The appeal must include a description of
the disputed part(s), an alternative course of action(s) along with
an anticipated completion date, the name of the managing
official responsible for implementing the alternative action(s),
and any relevant supportive documentation.
236
Mississippi VA
Shad White, State Auditor October 28, 2022
Office of the State Auditor
State of Mississippi
Post Office Box 956
Jackson, Mississippi 39205-0956
Dear Mr. White,
The State Veterans Affairs Board appreciates and thanks your staff for the courtesy and
professionalism shown during the transitional process of me becoming the new Executive Director.
The staff are working hard to include all recommendations that is be incorporated to enhance our
internal controls and operations.
AUDIT FINDINGS
CFDA Numbers and Program Name
64.015 Veterans State Nursing Home Care
Type of Compliance Requirement
Material Weakness and Material Noncompliance
Audit Findings Heading
Strengthen Controls over The Preparation, Recording, and Review of the Schedule of
Expenditures of Federal Awards.
STACEY E. PICKERING JAMES H. GARNER MENDAL G. KEMP DEBORAH WALLEY COLEMAN
Executive Director Chairman Vice-Chairman Madison,
Biloxi, Madison, At Large
Fifth Congressional District At Large
MICHAEL J. McGREVEY DAVID H. McELREATH JAMES (MAX) FENN, JR GEORGE E. IRVIN, SR.
Oxford, Summit, Jackson,
Decatur, First Congressional District Fourth Congressional District Second Congressional District
Third Congressional District
237
Current Status:
Response: Fully Corrected
MSVA completed the requirements of the previous corrective action plan response
submitted by hiring Edward Williams as the Internal Auditor on 8/1/2022.
Signed:
Mark Smith. Executive Director
Mississippi Veterans Affairs
238
Hl. MANAGEMENT RESPONSES AND
CORRECTIVE ACTION PLANS
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STATE OF MISSISSIPPI
MANAGEMENT RESPONSES AND CORRECTIVE ACTION PLANS
FOR THE YEAR ENDED JUNE 30, 2021
Instructions to Management
In order to provide a systematic approach for agencies to respond to audit findings, the management of each
agency was requested to follow the instructions listed below in preparation of the formal response to single audit
findings and the corrective action plan.
For each AUDIT FINDING, the agency should include the following: (1) Assistance Listing Number (ALN)
and program name, (2) type of compliance requirement, (3) audit finding number and finding heading, (4)
response, and (5) corrective action plan. These items are discussed below:
1. Each ALN and program name should be listed in the same sequence presented in the
management letter. The entire finding is not required to be repeated.
2. Each type of compliance requirement should be listed in the same sequence as presented in the
management letter.
3. Each audit finding number and finding heading should be listed separately in the same sequence
as presented in the management letter. The entire finding is not required to be repeated.
4. Responses of the agency to audit findings should be included directly below each audit finding
heading. For each response, the agency should state whether they concur or do not concur with
the individual finding and recommendation and the reasons why.
5. After an audit finding heading has been listed along with the corresponding agency response,
the plan for corrective action should be listed using the following format:
a. Specific steps to be taken to correct situation.
b. Name(s) of the contact person(s) responsible for corrective action.
c. Anticipated completion date for corrective action.
d. Specific reasons why corrective action is not necessary, if applicable.
OMB Uniform Guidance, Section 200.521 requires audit findings to be resolved between federal agencies and
audited agencies within six months after the receipt of the single audit report by the federal government. Audited
agencies should maintain permanent files on all correspondence with the federal government during the audit
resolution process. Federal agencies may ask for additional information pertaining to audit findings.
On the following pages, we have compiled the formal response to the findings and recommendations and the
corrective action plan of each agency’s management.
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STATE OF MISSISSIPPI
DEPARTMENT OF AGRICULTURE AND COMMERCE
ANDY GIPSON
COMMISSIONER
November 14, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
RE: Single Audit Management Report — November 3, 2022
Dear Mr. White:
I hope this message finds you well. I write this letter in response to your Single Audit
Management Report dated November 3, 2022. The Single Audit Management Report pertains to
the Mississippi Agriculture Stabilization Act (MASA), which was a program administered by
our agency with the purpose of assisting farmers in Mississippi that had been adversely affected
by the COVID-19 Pandemic. The program was created in the last portion of the extended
legislative session in 2020. MDAC was tasked with designing and launching a program,
reviewing applications, substantiating documentation and providing grant funding to all eligible
farmers over the course of roughly two months.
As you are aware, the program was designed to reimburse farmers for losses based on the type of
farming operation (Poultry, Sweet Potatoes and/or CFAP Eligible). An informative website and
application portal was created to accept applications of eligible farmers. The application process
itself was designed to minimize the number of applications from farmers that would be
ineligible. Applicants were required to self-certify to the claimed losses, similar to the federal
CFAP program. Unlike the federal program, in order to receive funding, the farmers had to
present evidence of loss in the form of receipts, checks or other forms of documentation and
attest to the fact that the losses claimed were due to Covid-19.
The COVID-19 pandemic undoubtedly negatively affected farmers in Mississippi. With
restaurants and eating establishments shut down across the country, the demand for food items
decreased. To that end, farmers had to hold on to their products for extended periods of time,
had difficulty finding the materials necessary to maintain their operations, incurred increased
costs associated with materials, fertilizer, and other necessities of farmers. Even then, at the
height of the pandemic in the Fall of 2020, the ability to show the full effect on farmers was not
an easy task.
P. O. BOX 1609 * JACKSON, MISSISSIPPI 39215-1609 * www.mdac.ms.gov * TELEPHONE: (601) 359-1100 |
241
In attempting to assist the farmers and follow the requirements associated with both the CARES
Act and the state law, we took our jobs very seriously. We required that farmers show us their
losses and to substantiate with the evidence they had at their disposal. Farmers that did not
maintain evidence of costs incurred either did not apply for funds or were denied funding. Of
course, most farmers had no idea that this program would exist in the fall of 2020, so it is quite
possible that many otherwise eligible expenses were never reimbursed as farmers did not hold on
to evidence necessary to support claims.
MDAC, with the assistance of its contractor, attempted to create a program with multiple layers
of review to vet applications and only issue grant awards to those farmers that could substantiate
their losses.
While we are troubled with the findings associated with our administration of this program, we
still feel strongly that we administered the program as well as possible under the circumstances.
If we are tasked in the future with administering a similar program, we will institute more
internal controls to avoid any questioned costs.
AUDIT FINDINGS:
Mississippi Avriculture Stability Act of 2020 — Department of Agriculture & Commerce
2021-50 Activities Allowed/Allowable Costs
Strengthen Controls to Ensure Compliance with Allowable Costs and Activities Allowed for
Requirements for Coronavirus Relief Funds
Response:
The Mississippi Department of Agriculture & Commerce (MDAC) has reviewed the Single
Audit Findings of the Office of State Auditor. MDAC will strengthen controls to ensure
compliance with allowable costs and activities allowed for Coronavirus Relief Funds if in a
position to manage such funds in the future. With that being the case, in view of the
requirements associated required for funding of Coronavirus Relief Funds and the state statute
that created the Mississippi Agriculture Stabilization Act, MDAC and its contractor attempted to
create a program and program guidelines to substantiate the losses claimed and attested to by the
farmers that applied for funding.
No funds were provided to farmers that were not substantiated by some form of evidence
supplied by the farmers. Unfortunately, in some instances, the attested evidence submitted for
farm supplies and related items was difficult to dismiss as related to the pandemic due to the
complicated scenarios associated with pandemic in 2020. In creating this program in response to
Senate Bills 3058 and 3061, MDAC conferred with industry associations and reviewed other
similar programs being administered at the state and federal level. MDAC attempted to take a
stricter stance on the requirement of documentary evidence illustrating losses, such as but not
limited to, receipts, cleared checks and other documents than other states and even the US
242
Department of Agriculture, which ran a self-attested program for grants to farmers. These
documents were reviewed by multiple analysts before a funding decision was made. These same
analysts worked closely with farmers to receive information necessary to justify a grant award.
Given the short amount of time to create and complete this grant period, MDAC, in conjunction
with its contractor, worked tirelessly to aid farmers within the prescribed rules associated with
the funds. This program was launched just as the true effects of the pandemic were really
beginning to be felt by the farming industry.
In conclusion, MDAC and its contractor made every reasonable attempt to provide necessary aid
to the farming community in Mississippi in view of the statutory requirements associated with
the program while running a very complicated program in a short amount of time. Most
similarly complicated programs are run over the course of much longer periods of time. That
said, MDAC will take measures to put in place great controls in the event a similar program is
administered by the agency in the future.
Corrective Action Plan:
The Mississippi Department of Agriculture & Commerce will strengthen controls to ensure
compliance with allowable costs and activities for requirements associated with the Coronavirus
Relief Funds, or other similar programs, in the future.
Sincerely,
And¥ Gipson
Commissioner
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STATE OF MISSISSIPPI
MISSISSIPPI DEPARTMENT OF CORRECTIONS
Burl Cain, Commissioner
FINANCIAL AUDIT FINDINGS
February 11, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
Enclosed for your review are the Mississippi Department of Correction’s response to the
financial statement audit finding for fiscal Year 2021:
Finding 2021-005
Repeat Finding: No
Finding Type: Material Weakness in Internal Controls Over Financial Reporting —Premier Supply
Link, LLC
The Funds has contracted with Premier Supply Link, LLC (Premier) to provide canteen services to
the Funds’ inmates statewide. The contract is a net-of-fee contract whereby Premier provides
canteen services and the Fund is compensated based on a determined percentage of the retail sales
of canteen items to the Funds’ inmates. The Funds rely on Premier invoices and supporting
documentation related to retail sales to determine the Funds’ compensation accounted for in the
Inmate Welfare Fund. There is no review of Premier’s monthly calculation of the Funds’
compensation and verification of the retail sales and supporting documentation.
Agency Response:
MDOC concurs with the finding.
245
Corrective Action Plan
The agency will enforce MDOC Policy 02-10, Canteen Operations, which stipulates canteen
funds will be independently audited and require annual financial status report. The agency will
look into amending the terms of the contract with Premier Supply Link, LLC or any vendor
awarded the contract to include sufficient language stipulating the agency’s discretion to audit
financial records and require retention of such records for a specified period of time. The agency
is in the process of implementation procedures to obtain retail sales and supporting
documentation for a monthly review of canteen services compensation.
The agency will consider requirement of the Service Organization Control (SOC) 1 report to
provide independent verification of adequacy of vendor’s system of controls. Derrick Garner, the
Chief of Fiscal Affairs and Budgeting will be contact person for corrective action plan changes
at 601-359-5215. This change will be implemented January 1, 2023.
Sincerely,
Burl Cain, Commissioner
246
SS" 3 A
*
MISSISSIPPI DEPARTMENT OF EDUCATION
Carey M. Wright, Ed.D.
State Superintendent of Education
FINANCIAL AUDIT FINDINGS
Shad White, State Auditor March 21, 2022
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
In accordance with Financial Audit Management Audit Report dated March 10, 2022, the
Mississippi Department of Education (MDE) is providing the following response and corrective
action plan for the financial audit finding for the fiscal year ending June 30, 2021.
AUDIT FINDINGS:
2021-006 Strengthen controls over the preparation of the Federal Grant Activity
Schedule.
Response: The MDE concurs with the finding and noted the following:
e One out of fifty-three sub-grantees’ expenditures were not recorded on
the subgrant schedule or listed on the passed to subrecipients column on
the grant schedule.
e Two out of eighty-nine MAGIC grant numbers on the grant schedule did
not agree to MAGIC.
e Eight out of one hundred ten grant award amounts on the grant schedule
did not agree to the grant award. These grants are closed with no federal
expenditures as of June 30, 2021.
e Five out of one hundred fifteen grant period end dates reported on the
grant schedule did not agree to the grant award.
® One out of one hundred seven cumulative expenditures for the federal
subprogram per the grant schedule exceeded the allocated amount
assigned by the agency to the federal subprogram within the block grant.
e Three out of one hundred forty grant numbers reported on the grant
schedule did not agree to the grant award. Two of the three grants are
closed with no federal expenditures as of June 30, 2021.
POST OFFICE BOX 771 ¢ JACKSON, MISSISSIPPI 39205 © (601) 359-3512 © FAX (601) 359-3242
247
Corrective Action Plan:
A. Specific steps to be taken to correct the situation.
The Executive Director of Accounting and the Executive Director of Grants Management
will ensure controls are strengthen over the preparation and review process of the Schedule of
Federal Awards and Subgrant Schedule form 27.30.70.
B. Name of the contact person responsible for corrective action.
Sheila Franklin-Buie, Executive Director of Accounting
Elisha Campbell, Executive Director of Grants Management
C. Anticipated completion date for correction action.
August 31, 2022
If you have any questions, please contact Dr. Felicia Gavin at 601-359-5254.
Sincerely,
Carey M. Wight, Ed.D.
State Superintendent of Education
248
MISSISSIPPI DEPARTMENT OF EDUCATION
Kim S. Benton, Ed.D.
State Superintendent, Interim
SINGLE AUDIT FINDINGS
October 21, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205 — 0956
Dear Mr. White:
The Mississippi Department of Education (MDE) has reviewed the single audit findings for the
for the fiscal year ending June 30, 2021 and provides the following response and corrective
action plan.
AUDIT FINDINGS:
21.019 Coronavirus Relief Fund (CRF)
84.425 Education Stabilization Fund (ESSER)
Allowable Costs
2021-044 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Coronavirus (COVID) Relief Funds (CRF) and Elementary and Secondary
Emergency Relief Fund (ESSER).
Response: MDE does not concur with this finding. Further, MDE objects to the assertion that
it did not act in good faith. In developing the Express Products Listing (EPL) as
directed by legislation, MDE awarded a contract to Apple, Inc. since this vendor is
a “sole source.” However, MDE initiated a Request for Quote (RFQ) process,
although not required by law, for additional computer equipment to be included on
the EPL. This decision was made to create a competitive process as much as was
practicable.
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249
Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
The crux of this finding hinges on the erroneous assertion that only one vendor was
allowed to offer input on the specifications. Specifically, the finding suggests that
the winning bidder was given unfair advantage based on the lead time in which
their input was solicited and received and implies that the winning bidder
participated in the RFQ development. These assertions are false. No vendor had
any role in the creation of the final RFQ. All vendors selected by MDE were
allowed to provide input on the specifications. Meetings were held with the MDE
invited vendors to solicit and document input regarding the specifications and other
related matters. These meetings are not reflected in the condition of this finding. It
is critically important to note that the scheduling of these meeting dates for the
purpose expressed above were not solely driven by MDE but were set based on
vendor availability. All meetings were scheduled as quickly and as often as
practicable under the circumstances.
This finding challenges the scoring for price. Specifically, the finding states, “MDE
failed to provide any information on why the points were assigned and calculated
other than an overall memorandum of the scores and process.” The legislative intent
and success of this initiative was largely shaped by providing school districts with
a list of vendors that were able to deliver the volume and meet the timeline for
device delivery. Significant consideration had to be given to vendors that were able
to deliver the volume of equipment needed by the November 20, 2022, delivery
timeline.
Lastly, MDE worked in concert with both state and local stakeholders to ensure full
implementation of the legislative intent as outlined in SB 3044, and to ensure that
MDE procured goods and services as an emergency response to the pandemic.
Thereby, ensuring that every student had a device for the continuity of teaching and
learning during the pandemic.
Corrective Action Plan:
A. MDE will continue to monitor procurement solicitations and awards for compliance with all
applicable statutes, policies, and procedures.
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Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
10.558 Child and Adult Care Food Program
Allowable Cost
2021-034
Response:
Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Child and Adult Care Food Program (CACFP).
The MDE does not concur with this finding. The MDE has a robust system of
internal controls and subrecipient monitoring system for the CACFP. In addition to
meeting USDA requirements for monitoring, the MDE Office of Child Nutrition
(OCN) also employs a risk-based process to select CACFP subrecipients for review
and the scope of monitoring. In fact, the MDE routinely exceeds the USDA
requirement to monitor 33.3% of participating organizations annually — in
Program Year (PY) 2020-2021, 42% of participating organizations were reviewed
to provide additional oversight of subrecipients. When the MDE identifies
instances of noncompliance, it requires participating organizations to take
appropriate corrective action. For organizations that are very high-risk, the MDE
employs the USDA Serious Deficiency process in accordance with 7 C.F.R. 226.6.
Further, while USDA does not require a review of bank statements for allowable
costs during the annual renewal by organizations, the MDE does review bank
statements to determine the allowability of funds. MDE has increased the rigor of
this evaluation from one month in PY 2016-2017 to up to 12 months of bank
statements for PY 2022-2023.
The OSA did not identify weaknesses in the MDE subrecipient monitoring process,
such as in the selection of organizations, the monitoring cycle, or monitoring
procedures. Instead, OSA identified errors made by individual participating
organizations. The MDE already has a process to recover funds from an
organization if an error is discovered during subrecipient monitoring and requires
a repayment of funds. In PY 2021, the MDE recovered $37,048 from the
organizations reviewed by OSA. MDE OCN staff will compare these previously
recovered amounts to the potential questioned costs identified by OSA to determine
any overlap in findings and required repayment of funds.
Finally, MDE staff was not included in the reviews of subrecipients by OSA so the
MDE cannot verify the accuracy of the proposed findings. USDA provided
numerous waivers of program requirements that altered CACFP requirements
during the pandemic. For example, the nationwide waiver of area eligibility in the
CACFP at risk component “allow[s] CACFP at-risk afterschool care programs to
provide a meal and snack, regardless of their location...” and “ensures that schools
and afterschool care centers are able to meet the nutrition needs of students by
providing each child with the maximum meal benefits available...””» See COVID-
19: Child Nutrition Response #68 at 2. These waivers have substantially altered
operational requirements for CACFP providers in PY 2020-2021. MDE staff will
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Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
need to review documentation from OSA before it can respond to the specific
disallowed items.
Corrective Action Plan:
A. The MDE will review documentation provided by OSA of potential questioned costs and
review source documentation held by the subrecipients to determine the amount of
unallowable costs. If confirmed, the MDE will recover any unallowable costs in
accordance with USDA policies. This review will be completed by April 21, 2023 and
Susie Evans, CACFP Director for the MDE OCN, will oversee the review.
B. The MDE will continue to assess its CACFP monitoring and continue to strengthen the
process while remaining in compliance with USDA regulations.
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Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
84.010 Title I — Grants to Local Education Agencies
84.425 Education Stabilization Fund
Reporting
2021-035
Response:
Strengthen Controls to Ensure Compliance with Federal Funding Accountability
and Transparency Act (FFATA) requirements
The MDE does not concur with this finding. The MDE maintains a process to report
FFATA information timely. The MDE is hampered in its reporting, however, by
known issues to the FFATA reporting system. For example, if the MDE needs to
revise a report it must submit a request to the FSRS Helpdesk to delete the
previously uploaded report before it can upload a revised report. This revised report
is required when entities DUNS/UEI became valid and/or when allocations were
revised. In these instances, the reporting date will be the date of the revised report,
rather than the original report.
The MDE made good faith efforts to upload this information in a timely manner.
Unfortunately, the FSRS system cannot provide the transactions on each federal
award to show when an original file was uploaded into the system or provide a
report on the end-user activity in the system. In addition, the FSRS system
experiences frequent system errors that prevent the MDE from uploading its reports
ina timely fashion. Thus, the MDE is unable to demonstrate exactly when the file
was initially submitted to the FSRS system or upload files that are timely prepared.
These common reporting and system issues are known by and affect all users. Until
these issues are corrected, the MDE may continue to experience difficulty in
uploading reports. All current reports have been uploaded and are visible within the
FSRS system.
Corrective Action Plan:
A. The MDE will maintain a copy of the PDF file of the upload for the initial submission and
will electronically provide a date stamp on the document indicating its upload. This process
will be implemented by June 30, 2023 and Elisha Campbell, Executive Director will
oversee its implementation.
253
Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
84.010 Title I — Grants to Local Education Agencies
Subrecipient Monitoring
2021-036
Response
Strengthen Controls to Ensure Compliance with On-Site Monitoring Requirements
for Title I.
The MDE acknowledges the findings identified by OSA as described above and
concurs. In the 2019-2020 monitoring cycle, the MDE monitored local education
agencies (LEAs) that were not monitored in the last three cycles, prioritizing the
“time since last review” as the risk factor for Title I programs.
The MDE will continue to utilize the risk assessment for monitoring. The current
risk assessment sorts LEAs into three risk categories: low risk, medium risk, and
high risk. The higher the LEA’s risk level, the more likely it is selected for on-site
or virtual monitoring. LEA risk is determined through multiple risk assessment
indicators, tested annually.
Corrective Action Plan
A. To help LEAs comply with CAP reporting requirements, the MDE will implement a
process to track CAP reporting timelines and provide LEAs with a reminder that their CAP
is due five business days prior to its due date. If an LEA fails to timely submit its CAP, the
MDE will include that failure to submit timely data in its annual risk assessment. This
process will be implemented by June 30, 2023 and the division of Monitoring and
Compliance will oversee its implementation.
B. The MDE will continue to utilize its risk assessment, adjusting as needed to ensure
compliance. This corrective action has already been implemented.
254
Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
84.027 Special Education — Grants to States (IDEA, Part B)
84.173 Special Education — Preschool Grants (IDEA, Preschool)
Subrecipient Monitoring
2021-037
Response
Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring
Requirements for Special Education Cluster Programs.
The MDE Office of Special Education (OSE) acknowledges the findings identified
by the Office of the State Auditor’s as described above. MDE OSE has maintained
the review of the Single Audits and provided follow-up on corrections needed by
LEAs with funding under IDEA programs. In addition, MDE OSE provides
technical assistance to LEAs regarding such. Further, MDE OSE utilizes the
District Determinations (SPP/APR) data to provide proactive technical assistance
to LEAs.
During the 2019-2020 school year, MDE OSE conducted follow-up monitoring on
previously monitored LEAs to assist them in clearing findings from the prior school
year. Under the guidance of the National Center for Systemic Improvement (NCSJ),
MDE OSE monitored LEAs via Special Education Determination Reports,
Mississippi Comprehensive Automated Performance-based System (MCAPS)
funding application review, and Formal State Complaints using previous
procedures while MDE OSE developed new procedures and risk assessments.
Additionally, with the onset of COVID-19, the districts and state agencies faced
challenges in meeting monitoring requirements and timelines during the last four
months of the 2019-2020 school year due to health and safety restrictions. In its
implementation of new procedures and risk assessments, MDE OSE _ has
incorporated broad revisions to the agency’s subrecipient monitoring procedures
and made a significant investment in building the capacity of new OSE
management team members to monitor subrecipient compliance and ensure that
subawards are used for authorized purposes.
Corrective Action Plan
A. The MDE OSE will continue the programmatic and cyclical monitoring of LEAs that began
as a pilot in the spring of 2020.
B. The MDE OSE will continue to complete the risk-based assessment, that includes the
SPP/APR data, each year as universal monitoring of all LEAs to identify those in need of
intensive intervention and support.
C. The MDE OSE will continue to review, approve and monitor budgets and expenditures
through the Mississippi Comprehensive Automated Performance-based System (MCAPS)
to oversee the use of IDEA grant funds to subrecipients.
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Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
D. The MDE OSE has established a procedure of virtual self-assessment via desk audits in the
event that the process is once again interrupted due to health and safety concerns.
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Mississippi Department of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
October 20, 2022
84.010 Title I — Grants to Local Education Agencies
Special Test & Provisions — Participation of Private School Children
2021-038 Strengthen Controls to Ensure Compliance with Equitable Participation of Private
School Children Requirements
Response The MDE does not see the finding as a systemic problem with the program. The
review of this compliance requirement is a part of the monitoring phase and not the
application phase of the grant cycle. During monitoring, LEAs must provide
supporting documentation for the following:
Identification of eligible students for equitable service calculation
Equitable services to be provided to students
How, where, and by whom will services be performed
How will equitable services be academically evaluated for effectiveness
The size and scope of equitable services that will be provided
How and when the decision about delivery of services will be made
Corrective Action Plan
A. The MDE will continue to work with and provide bi-annual training and technical
assistance focused on equitable service requirements to subrecipients to follow the
established procedures to ensure efficiency and effectiveness.
257
Mississippi Department
October 20, 2022
of Education - Fiscal Year 2021 Single Audit Response & Corrective Active Plan
10.553 — School Breakfast Program
10.555 — National School Lunch Program
10.556 — Special Milk
Program for Children
10.558 — Child and Adult Food Program
10.559 - Summer Food Service Program for Children
10.579 — Child Nutrition Discretionary Grants Limited Availability
Subrecipient Monitoring — Single Audit Resolution Process
OTH-2021-009
Response
Strengthen Controls Over Subrecipient Monitoring Related to the Single
Audit Process
The MDE tracking log of subrecipients only includes those exceeding the
single audit threshold. Those not exceeding the threshold are not included
on the log. There is no requirement to provide a log of subrecipients not
exceeding the threshold. The MDE does maintain a list of all participating
organizations.
As noted by OSA, one organization incorrectly reported the amount of
federal funds expended for PY 2020-2021 and was not included on the
tracking log. However, this organization’s single audit was found by the
MDE at a later date, after the initial log had been created. The audit was
reviewed by OCN staff and the organization provided corrective action
based on the findings of the audit.
Corrective Action Plan:
A. The MDE will review the single audit tracking process and ensure that all audits are
included on the tracking log
Thank you for the opportunity to provide the above response.
Sincerely,
Kim S. Benton, Ed.D.
Interim, State Superintendent of Education
258
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Education
(MDE) Management
Department of Education — Activities Allowed/Allowable Costs - Material Weakness/Material
Noncompliance
2021-034 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Child and Adult Care Food Program (CACFP).
Mississippi Department of Education (MDE) asserts in their disagreement with the finding that they have
a “robust system of monitoring” and that they could not verify the accuracy of the finding due to “not being
included in the reviews of the recipients.
OSA reviewed a significantly lower percentage of CACFP subrecipients than MDE alleges they reviewed
in their response (42%) and OSA found enough noncompliance to warrant a material noncompliance
finding with $126,191 in questioned costs, which should be noted is more than triple ($37,408) the amount
MDE stated they recovered from similar organizations.
Additionally, the assertion that the accuracy could not be verified due to not being “included in the reviews
of subrecipients” is misleading, and implies that MDE was not made aware of the particulars of the
questioned costs. MDE was provided with a list of all the CACFP subrecipients that are noted in the finding
and a list of the specific questioned costs. MDE stated it would take months to review those expenditures
at the same level of detail that OSA personnel were able to complete in less than six weeks.
In conclusion, the sheer number of errors in the subreicipient monitoring process that led to the questioned
allowable costs does not support MDE’s statement that their internal controls and subrecipient monitoring
system is either robust or adequate.
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259
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Education
(MDE) Management
Department of Education — Activities Allowed/Allowable Costs - Material Weakness/Material
Noncompliance
2021-044 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of
the Coronavirus (COVID) Relief Funds (CRF) and Elementary and Secondary
School Emergency Relief Fund (ESSER).
MDE states in their response to the finding that “the crux of this finding hinges on the erroneous assertion
that only one vendor was allowed to offer input on the specifications.” The finding acknowledges that
MDE provided evidence that three of the four vendors received the specifications in advance, but the
winning bidder received them 20 days in advance, while the remaining two vendors received them 7-8 days
in advance. Additionally, the specifications sent to the winning bidder were marked “draft” and redline
comments were added to the specifications by the winning bidder when they were returned to MDE. While
MDE did not adopt all of the winning bidder’s suggested modifications to the specifications, modifications
like the size of the needed laptop screens were adopted by MDE. MDE could provide no support that the
fourth bidder was given advance notice of the specifications.
Secondly, MDE asserts that the points assigned to the winning bidder for the “Devices” category hinged on
the guarantee that the devices would be delivered by the November 20, 2022 delivery timeline; however,
two other bidders with lower price points overall on devices also committed to having devices delivered no
later than November 20, 2022. In fact, bidders were told that that delivery by November 20, 2022 was a
requirement to bid on the RFQ. MDE did not describe why the bidders received the points that they did (as
stated in the finding), and their statement that it depended on delivery dates is not supported by the RFQs.
This type of discrepancy is the reason that the evaluations of RFQ’s should contain sufficient detailed
justification of points awarded.
Department of Education — Reporting — Material Weakness - Material Noncompliance
2021-035 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and
Transparency Act (FFATA) Requirements.
MDE states that they do not concur that FFATA information was entered timely or that no documentation
was maintained that could verify the information was entered; however, their response verifies that “MDE
is unable to demonstrate when the file was initially submitted...” Additionally, MDE has provided a
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261
corrective action plan to address the elements of the finding. OSA will review this corrective action in later
audits to determine if MDE has complied.”
Department of Education — Special Tests and Provisions — Significant Deficiency/Immaterial
Noncompliance
2021-038 Strengthen Controls to Ensure Compliance with Equitable Participation of Private
School Children Requirements.
MDE states that they do not believe this is a systemic problem with the program, but states that they do not
require supporting documentation in the application phase, and review those documents in the monitoring
phase of the grant process. There is a significant lag time between the application phase on the grant cycle
and MDE’s subrecipient monitoring. Due to this lag, errors in the Local Educational Agency (LEA’s)
documentation would not be identified timely, resulting in improper Title-I allocation. In addition, every
LEA is not selected for on-site monitoring each year. Not reviewing the LEA’s documentation prior to
approval could result in errors in the Title-I allocation that may not be identified timely or at all. MDE
should consider strengthening these controls to ensure the proper allocation of funds timely.
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MISSISSIPPI DEPARTMENT of EMPLOYMENT SECURITY
OFFICE OF THE GOVERNOR
ROBIN STEWART
INTERIM EXECUTIVE DIRECTOR
FINANCIAL AUDIT MANAGEMENT REPORT FINDINGS
April 13, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dear Mr. White,
The Mississippi Department of Employment Security (“MDES”) has reviewed the Office of the State
Auditor’s Financial Audit Management Report findings for fiscal year 2021 and hereby submits the
following responses:
2021-008 Strengthen Controls over the Unemployment Insurance Benefits Paid
MDES response:
MDES understands that the State Auditor has highlighted the following specific actions by MDES as
allegedly improper:
1) The waiver of the statutory waiting week period;
2) The waiver of the statutory work search requirements;
3) The alleged waiver of the federal and state “able, and available for work” requirement; and
regulation for unemployed claimants;
4) The temporary modification of the weekly earnings allowance for part-time unemployed
claimants; and,
5) The modification of MDES procedures to limit temporarily the evaluation of job separations
to the most recent base period employer rather than all base period employers.
HENRY J. KIRKSEY BUILDING
1235 ECHELON PARKWAY « JACKSON, MISSISSIPPI 39213
TELEPHONE: 601-321-6000 * mdes.ms.gov
263
MDES Financial Audit
Management Report Response
April 13, 2022
Through these statements, the State Auditor implies that MDES failed to follow federal law and
guidelines essentially ignoring and overriding certain safeguards in the UI system during the pandemic.
It is MDES’s position, however, that this implication is misguided because it fails to recognize both
the newly enacted federal law as well as the actual operations of MDES during the pandemic.
On March 18, 2020, the President signed the Families First Coronavirus Response Act (Pub. L. 116-
127). In this legislation, Congress provided emergency supplemental appropriations in response to the
economic challenges of the Coronavirus (COVID-19) by specifically creating the Emergency
Unemployment Insurance Stabilization and Access Act of 2020 (EUISAA). Section 4102(b) of
EUISAA states
Notwithstanding any other law, if a State modifies its unemployment compensation
law and policies with respect to work search, waiting week, good cause, or employer
experience rating on an emergency temporary basis as needed to respond to the spread
of COVID-19, such modifications shall _be disregarded for the purposes of
applying section 303 of the [SSA] and section 3304 of [FUTA] to such State law.
(Emphasis added).
Further provisions of EUISAA outlined the mandatory changes states were obligated to implement in
order to receive any emergency administrative grants and allotments to assist with funding the massive
increase in pandemic UI claims caused by government ordered shutdowns of nearly every commercial
enterprise in the entire United States, including those in Mississippi. EUISAA expressly authorized
states to modify, but only temporarily, certain aspects of their unemployment compensation (UC) laws
to address the pandemic emergency. Specifically, in order to obtain the federal assistance offered under
EUISAA and to safeguard this state’s Unemployment Compensation Trust Fund (UC Trust Fund),
Mississippi had to agree to suspend the waiting week under state statute through December 30, 2020.
(Miss. Code §71-5-511(d)). Subsequent federal laws addressing pandemic unemployment extended
the termination date of this waiver with the final extension being March 14, 2021. American Rescue
Plan Act of 2021 (ARPA).
To qualify for the federal pandemic allotments necessary to secure funding for the UC Trust Fund to
support Mississippi citizens unemployed by the pandemic, EUISAA also required Mississippi to
modify or suspend the work search requirement (Miss. Code Ann. §71-5-511(d)).' Mississippi elected
to suspend the work search requirement because most commercial businesses in this state were subject
to closure by a series of Executive Orders from March 8, 2020 (the first week for UI purposes) until
' UIPL Number 13-20 at p. 5 section (B)(ii) states the following with respect to qualifying for Allotment II of
Emergency Administrative Grants: “The state [must] demonstrate steps it has taken or will take to ease eligibility
requirements and access to UC, including modifying or suspending work search requirements and the waiting
week, and non-charging employers directly impacted by COVID-19 due to an illness in the workplace or direction
from a public health official to isolate or quarantine workers.” (Emphasis added).
264
MDES Financial Audit
Management Report Response
April 13, 2022
August 8, 2020.2 Executive Orders from the Governor modified state law to authorize MDES to
suspend the work search requirement. The initial order modifying state law, Executive Order number
1481 at paragraph 3 set the suspension period for the work search requirement as March 1 — June 27,
2020. Executive Order number 1502 both extended and modified the period to March 8 — July 25,
2020, when the Governor determined the pandemic health crisis required most non-essential businesses
to remain closed. (Exec. Order No. 1502 (2020) at paragraph 3). Finally, the suspension of the work
search requirement ended a mere five months later with Executive Order number 1510, which
announced the final period as March 8 — August 2020. (Exec. Order No. 1510 (2020) at paragraph 3).
The Department of Labor (“DOL”) provided a more detailed explanation of the proper suspension
procedures for the work search requirements in its Unemployment Insurance Program Letter (““UIPL”)
number 13-20 (March 22, 2020) and 13-20, Change 1, Attachment 1 (May 4, 2020).
Moreover, in March 2020, as per the mandates within the Coronavirus Aid, Relief, and Economic
Security Act of 2020 (CARES) (P.L. 116-136), Mississippi executed an agreement with DOL
committing it to comply with the guidance promulgated by DOL with respect to the operation of the
recently enacted temporary federal pandemic unemployment assistance programs. DOL reserved the
right to terminate the agreement with the state of Mississippi along with all federal support for this
state’s UC Trust Fund in the event that Mississippi failed to comply with DOL guidance regarding
operation of these programs, including, but not limited to, the suspension of the waiting week, the
waiver or modification of the work search requirement, and the application of a flexible interpretation
of “able and available” for employment in the context of the pandemic.
MDES did not waive the “Able & Available” Requirements.
With respect to the requirements that an eligible claimant be “able to work, available for work and
actively seeking work” (able and available requirement) under Miss. Code Ann. §71-S-511(c) and
Regulation 305.3 the alleged “material weakness” cited by the Office of the State Auditor (“OSA”)
misses some key facts. First, DOL clarified for state workforce agencies (SWA) in UIPL 10-20 (March
19, 2020), that SWAs have considerable flexibility to determine “what it means for [an] individual to
be able, available, and seeking work, even when quarantined or otherwise affected by COVID-19.”
UIPL 10-20, at p. 3. Using this DOL guidance, the Governor issued Executive Order number 1481 that
again modified state law to authorize MDES to “reasonably interpret able to work, available for work,
and actively seeking work” in the context of the pandemic from March 8, 2020 through June 27, 2020.
(Exec. Order no. 1481 at para. 5. (May 11, 2020)). MDES did “reasonably interpret” the “able and
available requirement.” It did not waive it. Subsequent Executive Orders, the last being number 1510,
extended the period for the modification of this aspect of state law granting MDES authority to the
? The Governor’s orders closing activity in this state started with Executive Order number 1458 on March 16, 2020,
which placed state workers on administrative leave and other orders that gradually opened the businesses in this state
ending with number 1522 that opened all businesses and facilities with reasonable precautions effective September
14, 2020. As per the guidance from the Department of Labor, this state designated March 8, 2020, as the starting date
for pandemic-related unemployment claims if applicable to the claimant under Mississippi Unemployment Security
Law and regulations.
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flexibility to interpret the meaning of the “able and available requirement” under the circumstances of
the pandemic through September 26, 2020. (Exec. Order no. 1510 at para. 4 (July 24, 2020)).As
explained in footnote 2 supra, this state did not fully authorize all businesses and facilities to re-open
until September 14, 2020. (Exec. Order No. 1522 (September13, 2020)).
The increase in the Weekly Earnings Allowance encouraged work not fraud.
It is unclear why increasing this allowance from $40 to $200 per week constitutes a fraud risk given
that the individual claimant must actually earn this amount by participating in gainful employment.
First, the period of the increase in the Weekly Earnings Allowance lasted for only four months - from
May 3, to September 26, 2020. (Executive Order 1510 at paragraph 5). Second, individual claimants
must actually work for an employer earning wages to qualify for this Allowance. This is a critical
observation, because, if one recalls, there was a severe shortage of workers actually willing to report
to work in the early months of the pandemic. MDES exercised the “flexibility” allowed under the
federal law and by DOL to address this worker shortage.
The evaluation of separation from the most recent base period employer was a reasonable,
temporary flexibility employed by MDES in light of the challenges presented by the pandemic.
MDES faced the largest number of unemployed claimants in the history of this state. Unlike Hurricane
Katrina, the previous catastrophe that seriously tested the resources of this agency, the COVID-19
pandemic touched all 82 counties in Mississippi in March through September of 2020, and even
through 2021. This left no offices in the state from which to draw additional personnel or other
resources as each office needed to address the historic volume of UI claims locally. Despite being one
of the most technologically advanced SWAs in the nation, all systems of MDES faced an overload in
the initial weeks of the pandemic from the UI claims system to the phone system. In addition, the
nation, including Mississippi, was shutdown with nearly everyone sent home as “non-essential.” In
this context, it was impossible for MDES to reach out to all base period employers for each claimant.
MDES initially tried adhering to its standard policy. However, it found that many employers were not
operating and therefore did not respond to phone calls or mailed documents.
For these reasons, MDES strongly disagrees with this finding. MDES adapted to the circumstances as
permitted by the flexibilities afforded to it under federal law and by the DOL. By the terms of Executive
Order number 1510, MDES ceased exercising this flexibility on September 26, 2020. The agency
resumed its pre-COVID-19 process of verifying the job separation information from all base period
employers for individuals filing any type of unemployment claims. Where appropriate, it established
overpayments and started collection efforts.
Because of the pandemic, and the suspension of eligibility measures mandated by federal and/or state
law, MDES suspended the incarceration Cross-match process for several months. Reactivation of the
interfaces occurred within a few months allowing the eligibility verifications to resume. In addition,
MDES re-verified all eligibility determinations with the incarceration interface. No backlog exists for
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April 13, 2022
incarceration re-verifications. Again, where appropriate, it established overpayments and started
collection efforts.
To be clear, MDES received authorization under federal and state law to waive or modify the laws,
regulations, and procedures cited by OSA. MDES followed the federally mandated procedures to
administer the federal pandemic unemployment programs and to maintain the fiscal security of this
state’s UC Trust Fund. While MDES acknowledges that it has learned much about how to improve its
performance during a statewide mass unemployment event, it can only administer programs according
to the rules. Therefore, it is important to recognize the actual federal laws that MDES, and all other
states, were required to administer during the pandemic, as well as the circumstances under which it
had to do so.
2021-016 Strengthen Controls over the Reconciliation of the State’s Financial Accounting
System (MAGIC) to the Third-Party Unemployment Software (ReEmploy).
MDES Response:
MDES has strengthened its controls over the Unemployment Insurance (UI) financial reporting process
by implementing a monthly reconciliation between the detailed UI payment records from
ReEmployMS to the summary payment data reported in our accounting reports. MDES created a pre-
defined query in “COGNOS,.” its third-party business analytics software. The pre-defined query pulls
a detailed list of all UI benefit payments, by entitlement type, made during the month, and allows
MDES to analyze the records for any errors that have occurred. This analysis and reconciliation tool
enables MDES to promptly respond to correct system errors and, in the event of a payment error, allows
for the timely setup of an improper payment in the system. Furthermore, the transactional level
payment reports will provide adequate audit support for the expenses recorded in the financial
statements and should significantly reduce the time to provide support for audit requests.
Additionally, MDES is in the process of developing a monthly report that will identify unearned
revenue received from UI employer contributions. This report will allow for the timely recognition of
unearned revenue.
Finding 2021-17 Strengthen Controls over the Identification of Unemployment Benefit
Overpayments.
MDES response:
Annually, MDES reevaluates our allowance for doubtful accounts estimate based on updated accounts
receivable figures from our ReEmployMS system in order to estimate the collectability of current UI
overpayment accounts receivable (A/R) balances. MDES recognizes the difference as uncollectible
AJR. This is done by using the current year A/R aging schedule and comparing the amounts collected
for each year to project the estimated collectability of the remaining debt. MDES then records this as
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A/R on the financial statements. MDES management reviews this calculation and performs additional
procedures to determine if the amount calculated needs an adjustment. Over the past few years, MDES
has used a specific secondary calculation for comparison purposes, and since the two calculations were
very close, deemed it proper to average the two calculations together.
In our opinion, MDES did not deviate from the overall process of performing the original A/R analysis,
executing additional procedures to determine if the calculation was proper, and making any additional
adjustments. Therefore, we did not deem it necessary to make further disclosures about the allowance
calculation. However, MDES understands that while OSA agrees with our overall allowance
calculation, OSA deems this as a departure from the previous methodology, which requires a disclosure
of the effect of the accounting estimate change. Therefore, MDES will strengthen controls over
financial reporting by making a more thorough documentation of our A/R allowance calculation each
year and making proper disclosures as required.
With respect to the increase in disbursements under the Pandemic Unemployment Assistance (PUA)
program, MDES began administering the program conservatively to balance the competing goals of
the program of minimizing fraud and the liberal awarding of benefits. MDES established the initial
PUA claim during the first 21 days for individuals without wages or without support for the asserted
wages as the minimum Weekly Benefit Amount (WBA) of 50% in accordance with the calculation
outlined in 20 C.F.R. § 625. For any individual who later presented support for the asserted wages at
the time of claim filing, MDES issued a re-determination and increased the WBA accordingly. For any
other individuals who failed to provide the requisite support for the claimed wages, MDES did not
establish overpayments because the provisions of the program provided the same minimum weekly
benefit amount (WBA) for each eligible claimant who failed to provide the appropriate proof of
earnings. MDES elected, using that process, to establish the claim at the minimum WBA to avoid
excessive improper payments and limit fraud.
However, in December of 2020, DOL admonished MDES for employing this process because it did
not match the program’s guidelines. Moving forward in 2021, DOL required MDES to adjust its
administration of the PUA program to align its procedures with the DOL guidance allowing self-
certification of wages. MDES adhered to these guidelines as well as the requirements of 20 C.F.R.
625.6 for processing any new PUA claims starting in 2021. These procedures obligated MDES to
accept the claimant reported self-certified wages at the time of the initial claim for use in the calculation
of the WBA for the first 21 days resulting in an increase in benefit overpayments.
2021-018 Strengthen Controls over the Overpayments of Employer Contributions.
MDES response:
MDES regularly has employer overpayments due to a variety of reasons. These include miscalculation
of the tax due as well as general overpayment of tax due by employers or their representatives. These
employer payments constitute the bulk of all employer contribution overpayments. However, during
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Management Report Response
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2021, the MDES computer program (program) that calculates and processes employer tax
contributions had a system error that resulted in overpayments for a specific set of employers. This
group of affected employers timely filed wage reports. These employers are also distinguished by the
fact that additional wage information was received requiring MDES to adjust each employer’s wage
reports after September 30, 2020. On the wage adjustment event, the program error used the post-
September 30 date generated by the entry of the adjustment for each employer to determine the timely
filing date. As such, these reports were set as untimely filed wage reports. The system then assessed
the maximum tax rate to this very small group of employers with this specific set of characteristics.
MDES discovered this programming error on its own and manually corrected it with the 2021 rates.
This absolved this small group of employers from paying either the maximum rates or any penalties.
However, in the interim, some employers remitted contributions at the higher rate generating
overpayments after the correction. This computer programming error only affected a handful of
employers.
With respect to refunds, the plain meaning of the words of the section addressing refunds are clear and
unambiguous. This section states:
The Department is authorized and empowered to refund, without interest, such
contributions, interest, and penalties as it may determine were paid erroneously by an
employer, or may make or authorize an adjustment thereof in connection with
subsequent contribution payments, provided the employer shall make written
application for such refund or adjustment within three (3) years to the last day of the
calendar year in which such contributions were erroneously paid, were performed. For
like cause and within the same period, adjustment or refund may be made on the
Department's own initiative.
Miss. Code Ann. §71-5-383. The language of this statute is clear, obviating the need for a written
policy. MDES is only authorized by statute to provide refunds of contributions, interest, and penalties
that either it determines on its own were paid erroneously or if an employer requests a refund in writing
within three (3) calendar years from the date of the contribution. After that time, MDES lacks authority
to issue refunds because those amounts change character from credits to the employer to contributions
once the deadline passes. That interpretation comprises the plain meaning of the statute. MDES
Regulation 600.03 explains that the Department has the authority to apply credits to future balances.
Miss. Code Ann. §71-5-383. The statute limits this regulatory to the three-year period of the credit.
Miss. Code Ann. §71-5-383
Note specifically that the statute limits the authority of MDES to issue refunds either to employers that
submit a written request or on its own initiative but only within the three (3) calendar year period. Id.
In addition, in all cases, the statute dictates to the agency the process for transferring the monies from
the employer to the Trust Fund after the three (3) year period. Miss. Code Ann. §71-5-453.
Please note also that MDES provides three (3) forms of notice to employers of any available credit
balances. An employer may review its current account with MDES seven days a week, 24-hours a day,
online. In addition, MDES is now mailing a notice to employers with available credit balances in June
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MDES Financial Audit
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and December of each year. MDES is in the process of implementing a notice to employers that will
provide them information concerning any credit scheduled to expire annually on December 31. MDES
plans to mail this letter to employers each October. The annual notice by mail will create at least seven
(7) opportunities for notice of an employer’s credit balance before its expiration.
In December of 2021, the MDES Chief of Tax personaily corresponded via mail with all employers
with credits set to expire at the end that year to provide an additional notice of refund eligibility. MDES
also used an email blast, posted a notification of the expiration of credits to its news and information
section on all employer accounts and posted instructions to either request a refund or assistance. Due
to the late issuance of this letter, MDES allowed refunds to any employer responding to MDES prior
to the end of that calendar year.
Internally, as noted in the response to finding 2021-016, MDES accounting staff is developing a
monthly report that will identify employer payments resulting in a credit balance and ensure proper
revenue recognition on the financial statements.
Our agency appreciates the opportunity to respond to the MDES financia! audit findings for the fiscal
Year 2021.
Sincerely,
PA Sb
Robin Stewart
Interim Executive Director
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Employment Security
(MDES) Management
Material Weakness
2021-008 Controls Should be Strengthened over Unemployment Insurance Benefits Paid.
The Office of the State Auditor (OSA) acknowledges that the Mississippi Department of Employment Security
(MDES) was faced with an unexpected and staggering task to ensure unemployment benefits were paid to
individuals during the pandemic. OSA also acknowledges that certain federal guidelines were provided that MDES
had to comply with in order to receive additional federal unemployment funds. While MDES’ response to the
finding focuses on the federal requirements and state guidance to waive or ignore existing controls, MDES fails to
identify any way that the agency mitigated any of the fraud risks or potential for overpayments created by waiving
or overriding these controls. This failure on the part of MDES resulted in a 301% increase in known overpayments
from fiscal year 2020 to 2021. This failure to safeguard the state’s assets is the basis for the material weakness
finding. Additionally, MDES fails to acknowledge that the agency was required by the same type federal guidance
referenced in their response to the finding (UIPL Letters and Change Notices) to ensure adequate and proper fraud
detection and prevention techniques were being utilized by the agency.
Moreover, while MDES did receive federal guidance on making unemployment payments more accessible to those
directly impacted by the pandemic, the options provided by the federal government were to either modi fy or suspend
the work search requirements for individuals or employers directly impacted by COVID-19 due to an illness in the
workplace or direction from a public health official to isolate or quarantine workers. States were also given the
flexibility to respond to the COVID-19 emergency in a broader way, if they chose to do so (emphasis added by
auditor). (Unemployment Insurance Program Letter Number 13-20, Change 1, Attachment 1, Question 2). MDES
chose to suspend the requirement for all unemployment claims, and not only those that arose from an illness in the
workplace or from an order to isolate or quarantine workers. The decision to implement broader flexibility and
completely waive work search requirements were made by MDES. By MDES’ own admission in other auditee
responses to OSA, MDES stated that they requested the Governor’s Office waive the specific requirements.
Additionally, in each Executive Order (1462, 1481, 1502, and 1510), MDES was given flexibility to reassess and
modify these measures prior to their expiration date in the orders.
Additionally, The Department of Labor (DOL) included program integrity language in all of the major pieces of
guidance associated with the state implementation of the CARES Act programs and provisions (Unemployment
Insurance Program Letter Number 28-20). Program Integrity requirements for the regular unemployment program
and unemployment programs authorized by the CARES Act were to operate in tandem, and CARES Act program
requires that states must ensure that only eligible individuals receive benefits (Unemployment Insurance Program
Letter Number 23-20). Both UIPL letters 23-20 and 28-20 specify that the states must make efforts to rapidly and
proactively prevent, detect, and investigate fraudulent activity; establish and recover fraud overpayments; and
pursue criminal and civil prosecution to deter fraud. Specifically, states were strongly encouraged to implement
the following measures to minimize fraud in the unemployment system:
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
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1) Social Security Administration Cross Match
2) Systematic Alien Verification for Entitlement
3) Incarceration cross matches
4) Internet Protocol Address checks
5) Data Analytics to cross reference claims for indicators of fraud.
Furthermore, many of the most effective tools to deter and detect fraud were available to MDES in the Integrity
Data Hub (IDH), and were available to states for well over a year. These included:
1) Interstate Suspicious Actor Repository to match claims across states
2) Foreign IP Address verification to receive flags on claims filed from IP addresses outside of the United
States
3) Data Analytic tools
4) Fraud Alert Systems
5) Identify Verification for fraud scoring information, including flagging synthetic identities.
MDES has stated that they utilize the IDH; however, auditors cannot determine how effectively these programs
were utilized considering the high amount of overpayments that were made during fiscal year 2021. Additionally,
one of the specific fraud risks the UIPL, incarceration cross matches, were not performed by MDES, and resulted
in Overpayments to incarcerated individuals. These incarcerated individuals were able to apply for benefits when
MDES overrode or turned off the automated controls and did not implement any compensating controls to ensure
payments were proper.
In summary, regardless of the federal requirements or Executive Orders issued, MDES is still responsible for
ensuring the accuracy of unemployment claims. In order to assure the accuracy of those claims, MDES should have
implemented compensating controls to safeguard the unemployment trust fund when other controls were waived or
overrode. The ultimate responsibility to ensure that unemployment payments were accurately paid out and that
overpayments were kept to a minimum is the responsibility of MDES personnel.
Material Weakness
2021-018 Strengthen Controls over the Overpayments of Employer Contributions.
According to multiple conversations with MDES personnel during the audit, MDES immediately recognized
employer overpayments as “Revenue” and moved the amounts to their Trust Fund from their clearing account,
which is a violation of generally accepted accounting principles as the money has not actually been “earned” until
the passage of the required three years.
Moreover, the MDES response states that they provide three forms of responses to employers regarding their
overpayments; however, this was not the practice in fiscal year 2021 until this matter was brought to Management’s
attention by the auditors. Auditors informed Management of this issue prior to December 2021, so any action taken
by the MDES Chief of Tax as outlined in the response was in reaction to the lack of controls over employer
contributions, and therefore cannot be used as a validation of the existence of controls. MDES states that these
overpayments can be refunded to the employer if the employer requests such a refund in writing; or the request
could be given at MDES discretion without a corresponding request. MDES needs to ensure employers are aware
of overpayments so that they can request these refunds, if so desired.
In conclusion, MDES needs to strengthen controls over employer overpayments so that the State’s employers are
not penalized by an error in MDES’ system and can be refunded overpayments timely.
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OrrFice OF THE GOVERNOR
Tate Reeves
Governor
Robin Stewart
Interim Executive Director
SINGLE AUDIT FINDINGS
October 21, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
Enclosed for your review are the Mississippi Department of Employment Security’s responses to the single
audit findings for Fiscal Year 2021.
ALN Number 21.019
2021-043 - Strengthen Controls to Ensure Compliance with Allowable Costs and Activities Allowed
Requirements for Coronavirus Relief Funds.
MDES Response:
MDES and its subgrantees respectfully disagree with the findings set forth in finding 2021-043. The
Coronavirus Aid, Relief, and Economic Security Act (CARES) (2020), as later amended by the Coronavirus
Response and Consolidated Appropriation Act (2021), authorized the allocation of relief funds to states to cover
the costs of “the state or...a local unit of the state that were necessary expenditures related to the Covid-19
pandemic, that had not been budgeted prior to March 27, 2020, and were incurred during the pandemic period
of March 1, 2020, through December 30, 2021.” MDES maintains the position that the relief funds,
appropriated by the Mississippi Legislature, were duly expended according to, and in compliance with, the
guidelines and restrictions set forth in the CARES Act, as well as all other relevant federal regulations and
guidance.
I. Relation to the Public Health Emergency
The expenditure guidance issued by the Department of the Treasury (hereinafter, “Treasury Guidance” or
“Treasury”) explains permissible “necessary costs” related to the Covid-19 public health emergency. This
Treasury Guidance provides an expansive definition of “necessary” meaning “that the expenditure is reasonably
necessary for its intended use in the reasonable judgment of the government officials responsible for spending
Helping Mississippians Get Jobs
Henry J. Kirksey Building @1235 Echelon Parkway @ Jackson, Mississippi 39213
Post Office Box 1699 @ Jackson, Mississippi 39211699 @ (601) 321-6073 @ FAX (601) 321-6076
MDES is an Equal Employment Opportunity Employer
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MDES Response to Single Audit Findings
October 21, 2022
the COVID-19 Relief Fund payments.” Treasury specifically references the use of Covid-19 Relief Funds (also
referred to as “Funds”’) to cover employment and training programs for employees furloughed due to the public
health emergency so long as the government officials responsible for spending the Funds have “determined that
the costs of such employment and training programs would be necessary due to the public health emergency.”
The State of Mississippi, through its Legislature, made just such a determination in 2020 in House Bill 1795
(2020) hereafter, “Covid Relief Bill”). The Covid Relief Bill designates MDES as the ultimate government
body responsible for spending these funds. In 2020, MDES concluded that the purposes listed in the Covid
Relief Bill defined the “necessary costs” due to the public health emergency as confirmed by the elected
representatives of the citizens of this State. This bill outlined the following specific purposes for authorizing the
use of the Funds: for short-term training programs; for the equipment and supplies necessary to support such
short-term training programs and to increase the capacity of training programs that are already in place, so that
employees and others who have been displaced due to the Covid-19 public health emergency can be more
competitive and trained for the job market that emerges after the Covid-19 public health emergency; for on-the-
job training; and for certain administrative fees.
Moreover, the Covid Relief Bill lists examples of permissible expenditures necessary to respond to the unique
impact of the Covid-19 public health emergency on the employer and labor sectors of Mississippi’s economy.
These examples serve only as a guide, because they are expressly not exhaustive. House Bill 1795 authorized
not only employment and training programs but also any equipment purchases that enabled the Community
Colleges to increase the capacity and capabilities for distance learning, as well as to “increase social distancing
capabilities” for either students or instructors.
II. Independent Determination by MDES that the Questioned Expenditures were Necessary
A. State Law Expressly Authorized the Purchase of Equipment to Facilitate Social Distancing
Capability and Increase Learning Capacity and Capability
As a result of the 2020 Legislative Session, which involved a deliberative process of the representatives of the
citizens of the state of Mississippi deciding how to best spend some of the federal Covid Relief Funds, the
Mississippi Legislature allocated funds to the Community Colleges of this state through MDES, to provide
immediate and near-term job training to persons displaced as a result of the Covid-19 public health emergency.
The resulting state law expressly authorizes these expenditures so long as MDES independently determines the
necessity of such expenses as resulting from the Covid-19 public health emergency. Also, during 2020, MDES
worked on the front lines of the unemployment crisis in this state. Data from 2020 reveals the dramatic rise in
unemployment in Mississippi among the four Planning and Development Districts: Twin Districts, Mississippi
Partnership (hereinafter, “MS Partnership”), Southcentral, and the Delta. In February of 2020, the
unemployment rate among the four Planning and Development Districts in Mississippi was: Twin Districts-
5.4%, MS Partnership- 4.7%, Southcentral- 5.1%, and the Delta- 7.7%. By April of 2020, the unemployment
rate had risen in these districts to: Twin Districts- 15.1%, MS Partnership- 15.1%, Southcentral- 13.9%, and the
Delta- 15.9%. By mid-2020, these unemployment rates began to slowly recede from the peak but remained high
through November of 2020 at the time the expense approvals for the Covid Relief Funds occurred.
In addition, MDES considered the underlying data that became part of the 2020 annual reports for the
unemployment and covered employment rates by county. As part of its regular mission, MDES staff consider
the economic challenges facing different regions of the state which impact workforce development decisions.
All of these factors impacted the determination by MDES that the questioned costs were necessary due to the
public health emergency.
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MDES Response to Single Audit Findings
October 21, 2022
Even after determining that the use of Covid Relief Funds met the initial element of the Treasury Guidance
criteria, MDES followed a specific and thorough process to ensure that it evaluated the justification for each
individual Community College’s proposal. To start the process, MDES sent each Community College in
Mississippi, via the respective Planning and Development District, information regarding the requirements of
the proposals to be submitted and, the then-current Treasury Guidance noting the specific Covid-19 related
reason for the equipment purpose. This agency also created a committee of senior staff with experience in
Business Management and Grants to evaluate the financial and other details of each proposal. Each Community
College’s proposal passed through several revisions from approximately August through November of 2020, as
the committee requested additional supporting information and justification prior to finally accepting a
requested purchase or expenditure as necessary.
B. Equipment expenditures were necessary to follow state mandated social distancing requirements
Mississippi Community Colleges received general health and safety guidance from the Mississippi Department
of Health regarding masks, quarantine, and isolation protocols. They also received monthly or more frequent
mandates outlining very specific social distancing and indoor masking requirements. In addition, each
Community College adopted its own Covid-19 safety policy or protocols.
Starting on March 24, 2020, social distancing and capacity restrictions were established for all businesses in this
state and identified “essential” businesses for this state during the Covid-19 health emergency. On April 3,
2020, at 5:00 p.m., all non-essential businesses were closed, allowing the defined essential businesses to remain
open with restrictions, and all residents of this state were ordered to “Shelter in Place” (lockdown). On May 8,
2020, the Shelter in Place order expanded the list of essential businesses permitted to open and operate under
certain conditions (“Safer at Home’’). A final extension of the Safer at Home order moved the restrictions
deadline to June 1, 2020. Pursuant to Executive Order 1495, all state subdivisions were called to resume normal
business operations on July 1, 2020.
On June 10, 2020, the “Safe Return” Executive Order granted permission for all social and community activities
to resume as long as those activities complied with the guidance provided by the Mississippi Department of
Health. From June 1, 2020, through the last week of July of 2020, the Safe Return order remained in place with
multiple deadline extensions. Starting July 19, 2020, the health restrictions were narrowly tailored, including
social distancing, to a list of specific counties with the highest number of Covid-19 cases and required more
stringent social distancing, sanitizing, masking, and other safety requirements. On September 30, 2020, these
social distancing requirements were re-affirmed.
Covid-19 cases began to steadily increase in Mississippi from October through December of 2020, with many
surges in Covid-19 cases in Mississippi from 2020 through 2021. Many counties in this state were placed under
a mask mandate by executive order during this time period. Thus, the steady increase of Covid-19 cases from
March 1, 2020, to December 31, 2020, necessitated both social distancing at the Community Colleges as well as
distance learning.
C. Equipment Purchases Met Monitoring and Purchase Requirements As Set Forth Under Federal
Guidance Procedures
Treasury Guidance required that the equipment purchases be completed and the purchased equipment “be put to
use in service of the Covid-19 related use for which it was acquired... by December 31, 2020.” MDES
approved all equipment purchases that OSA now questions prior to December 31, 2020, which was well within
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the Relief Fund Period. Moreover, MDES hired a third party to verify, in-person, that delivery of the equipment
occurred prior to December 30, 2020. MDES also required that the individual Community Colleges tag each
piece of equipment on the respective colleges’ inventory for each item purchased through the Covid Relief Fund
program.
Furthermore, each Community College purchased all equipment prior to December 31, 2020, because a state
law required certain federal Covid-19 related funds not expended by December 15, 2020, be transferred to the
state’s Unemployment Trust Fund. Also, pertinent budget documents substantiate that the purchases were not
accounted for in the most recently approved budget (2020 period) of the Community Colleges, thus the
purchases were allowable under federal guidelines.
All but one of the Community Colleges placed the newly purchased equipment into service before the end of
the Relief Fund Period on December 31, 2021. MDES objects to the OSA’s Questioned cost for East
Mississippi Community College’s (EMCC) purchase of the Thompson Machinery/Thompson Power-
Caterpillar Equipment Simulators in the amount of $172,247.15 for failing to place the equipment in service
during the Relief Fund Period. The response by EMCC reports that this equipment entered service on February
1, 2021, therefore, placement in service occurred during the Relief Fund Period.
MDES also challenges the questioned cost for three drones by Copiah-Lincoln Community College (‘Co-Lin
CC”). As an emerging technology, commercial enterprises continue to find new uses for drones. However, to
effectively use this technology, private enterprises need trained and registered drone pilots. The Federal
Aviation Administration estimates a potential "phenomenal" growth in professional grade drones through 2025,
and thus a corresponding need for registered drone pilots. Moreover, the very nature of this technology permits
not only instruction at a safe distance but surveying and inspections as well. These tasks were in high demand as
a result of the lockdown during the pandemic. The reasons supported the nexus between this equipment
purchase and the Covid-19 public health emergency.
Holmes Community College (HCC) did not place its purchased equipment during the Relief Period because it
fell victim to the precise shortage it purchased the equipment to address- a severe lack of skilled HVAC
technicians. Despite repeated efforts, HCC proved unable to hire an instructor for the high demand HVAC
program because the scarcity of technicians resulted in rising private sector hourly rates with which it could not
compete. HCC did arrange for an instructor to timely begin the HVAC course, however, he secured full-time
employment before the course began. HCC was reasonable and prudent in its purchase of the HVAC equipment
in the fall of 2020, and did not exceed costs which would have been “incurred by a prudent person in the
circumstances prevailing at the time the decision was made to incur the cost”. The Treasury Guidance permits a
“recipient to use payments from the Fund to purchase a durable good that is to be used during the current period
and in subsequent periods if the acquisition in the covered period was necessary due to the public health
emergency.” The severe labor shortages resulting from the Covid-19 public emergency directly impacted
HCC’s ability to place this equipment into service and begin training students. However, the penalty of
repayment of these funds to purchase this equipment under these circumstances completely undermines the
express purpose of the Covid Relief Funds and exacerbates the severe HVAC labor shortage created as a result
of the public health emergency. Moreover, as soon as an instructor was hired, HCC began using this equipment
to train students.
D. State Law Expressly Authorized the Purchase of Equipment to Expand Training Capacity/or
Capabilit
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MDES relied upon both the list of essential businesses and industries in Executive Order No. 1463 (March 24,
2020) as well as economic data presented by the Community Colleges and local employees at the time of the
funding proposals to determine which courses qualified as necessary expenditures incurred as a result of the
Covid-19 public health emergency. The industries and/or jobs deemed essential and therefore in high demand
during the Covid-19 emergency in Mississippi include, but were not limited to: construction and HVAC
services, warehouse, distribution, and fulfillment centers, agriculture, food cultivation, and manufacturing.
Also, MDES prioritized individuals displaced by or underemployed by the effects of Covid-19 for such courses,
thereby matching the needed skills with the people in need. Unemployed and underemployed students
completed the classes offered by the Community Colleges.
The questioned equipment not related to distance learning include two lathe purchases by Itawamba Community
College (ICC). MDES determined the purchase of the two spindle lathes, for a total of $313,800.00 by ICC, met
the requirements of “necessary as a result of the Covid-19 public health emergency”. ICC explained that prior to
2020, students received hands-on training through internships with area employers. However, because of the
Covid-19 public health emergency and the resulting health orders, these employers suspended these internships
in the fall of 2020. ICC purchased the lathes in the fall of 2020 and conducted the classes that semester as well.
ICC served a total of 22 students in precision machining and industrial maintenance classes using these lathes,
of whom 50 percent were unemployed and 81 percent were financial aid eligible. In the fall of 2021, even
though the internships resumed, having this equipment allowed ICC to offer practical training to more students,
especially the 8 unemployed and 17 underemployed students enrolled in these classes.
III. Conclusion
To contest the OSA’s Questioned Costs, MDES has presented several levels of support and documentation.
Under the Coronavirus Relief Fund for States, Tribal Governments, and Certain Eligible Local Governments,
86 Fed. Reg. 10 (Jan 15, 2021) and by virtue of House Bill 1795, MDES has explained that it had authority to
determine the necessary and qualifying expenditures related to the Covid-19 public health emergency for
Covid-19 Relief Funds. MDES has further outlined how it followed the requirements of the CARES Act and the
Treasury Guidance to use data from 2020 to evaluate the causal relationship between the Covid-19 public health
emergency and the funding requests presented by the subgrantees, the Community Colleges.
The factors impacting the necessity for the approval of the funding requests include: (1) the sudden, mass
unemployment that occurred in Mississippi as a result of the Covid-19 health emergency coupled with; (2) the
continued social distancing caused by the number of Covid-19 cases and deaths in Mississippi; and (3) the need
to provide crucial skillsets to meet the changing market demands created by the Covid-19 pandemic as
Mississippi returned to closer-than-normal life.
MDES has also explained that the expenditures occurred during the Relief Period from March 1, 2020, through
December 31, 2021. Further, the Planning and Development Districts, through the individual Community
Colleges, have presented additional documentation to OSA to support the budgetary requirements for the
questioned costs as well. The Community Colleges have also included extensive documentation to OSA
outlining the validity of these charges under the Treasury Guidance as described in this response.
MDES and its subgrantees object to the OSA’s Questioned Costs finding as noted and documented in this
response and supporting documents. For these reasons, the questions concerning these costs should be cleared.
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ALN Number: 17.225 — Unemployment Insurance
2021-015 - Strengthen Controls to Ensure Compliance with Eligibility Requirements for Unemployment
Insurance.
MDES Response:
Other than to acknowledge that a number of overpayments and improper payments occurred, MDES
respectfully disagrees with Finding 2021-015. MDES properly complied with emergency measures enacted by
both the federal government and the State of Mississippi in response to the Covid-19 pandemic. In order to
explain the actions of MDES during this unprecedented pandemic, it is necessary to place the actions described
in the audit finding in context, so that proper perspective, understanding, and appreciation can be ascertained.
On March 13, 2020, President Trump declared the Covid-19 pandemic a national emergency. On March 14,
2020, Governor Tate Reeves issued a Proclamation declaring a State of Emergency in the State of Mississippi.
Because the Covid-19 pandemic was declared a national emergency both at the federal and state level, any
resulting State or Federal Executive Order, or federal or state legislation, became law, and thus controlled the
procedures of MDES. This new “emergency law” supplanted existing current state and federal law in many
areas including certain state unemployment insurance statutes. Thus, normal agency measures, controls,
practices, and other criteria, as referenced in Finding 2021-015, conflicted with duly enacted Executive Orders
and certain legislation, and therefore had to be adjusted. This need to adjust procedures clearly distinguishes FY
2021 from any other non-pandemic year and explains and supports the fact that MDES did not “waive” state
law; rather, it followed all emergency law measures, which included the temporary suspension of certain
eligibility requirements to expeditiously deliver much-needed relief to hundreds of thousands of Mississippians.
I. Suspension Of Eligibility Measures
To adequately explain MDES’s decision to temporarily suspend certain unemployment insurance eligibility
measures, and to modify other unemployment insurance statutes such as the weekly earnings allowance, it is
necessary to review pertinent federal pandemic relief legislation enacted during the early stages of the
pandemic. On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (FFCRA),
specifically Division D, the Emergency Unemployment Insurance Stabilization and Access Act of 2020
(EUISAA). Per the United States Department of Labor's (DOL) guidance, “the EUISAA sets out requirements
for emergency administrative grants to states, and authorizes emergency flexibility allowing states to
temporarily modify certain aspects of their unemployment compensation (UC) laws.”
In order to receive the emergency administrative grants under Section 903(h)(3)(B), SSA, (42 U.S.C. § 1
103(h)(3)(B)) pursuant to EUISAA, each state must show the “steps it has taken, ... , to ease eligibility
requirements and access to UC, including: modifying or suspending work search requirements and the waiting
week.” In order to receive emergency administrative grants, states were required to, at a minimum, modify or
suspend the waiting week, modify, or suspend the work search requirement, and non-charge employers for
individuals or employers directly impacted by COVID-19. However, UIPL 13-20 and its subsequent changes
(UIPL 13-20 change 1, UIPL 13-20 change 2, and UIPL 13-20 change 3) encouraged states to more broadly
apply these modifications or suspensions, even to the fullest extent allowed under federal law.
In compliance with this statutory requirement, Mississippi then executed a series of Executive Orders which
specifically addressed the directive to temporarily suspend the work search requirement and the one-week
waiting period, as well as provide flexibility in the interpretation of the able and available requirement.
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Executive Orders also included a provision that temporarily increased the weekly earnings allowance,
encouraging employees, gig workers, and the self-employed to continue working even if their hours were
reduced or business was diminished. This modification proved highly successful, especially in the food
industry. Another provision, although flagged by Finding 2021-015, was also authorized by Executive Order,
and allowed MDES to determine UI eligibility based on job separation from the most recent employer, rather
than from all previous employers in the employee’s base period, as is the normal procedure. This measure
expedited UI services to thousands of claimants filing for benefits en masse at a most critical time.
The measures taken by MDES during the most severe part of the pandemic were necessary, proper under the
circumstances, narrowly targeted in scope and time, and authorized by federal and state law. After these
Executive Orders expired, MDES returned to its normal pre-COVID procedures. However, finding 2021-015
indicates that MDES simply ‘opted to override existing controls” without support in state or federal law.
Further, the report implies that the actions of MDES were the sole cause of the significant increase in claims
and subsequent overpayments.
As explained herein, the requirements of the new federal unemployment provisions coupled with the
unprecedented mass unemployment crisis, dictated the actions taken by MDES during the FY 2021 audit
period. When the entire state shut down, except for essential services, for several weeks, claims naturally
increased. Therefore, statistically speaking, it follows that the number of overpayments increased because of the
increase in unemployment claims filed.
II. Verification And Overpayments Discussion
The audit finding states that the waived and altered controls led to an increase in claims and prevented MDES
from vetting those claims for fraud. This finding further remarks that the resulting overpayment total was
comprised of different categories, specifically: payments to individuals who never lost their job or had a
reduction in wages, fraudulent payments, payments to incarcerated individuals, and international unemployment
fraud.
The increased overpayments of benefits showing in this finding are a result of new fraud detection tools, the
reestablishment of prior controls, and system stabilization allowing MDES to better detect fraud.
See below description:
- By May of 2020 the Social Security verification issue and the Department of Public Safety verifications
that had been overwhelmed by unprecedented numbers of hits from multiple states were again
functional.
- In June of 2020, MDES had begun aggressively investigating potentially fraudulent claims. At this time,
MDES established a dedicated team of individuals for this purpose. This team utilized various reports
that identified suspicious characteristics in unemployment claims.
- Also in June of 2020, MDES implemented the RESTART MS system. This program allowed employers
to electronically report fraud claims for individuals who never lost their job or had a reduction in wages,
individuals who refused work, and individuals who did not respond to call-backs to work.
- In October of 2020, MDES reinstated the Federal and State Incarceration cross-matches.
- In March of 2021, MDES began utilizing ID.me, a leading identity verification vendor, to verify
claimant identity prior to the payment of benefits. Over the course of several months, the system was
implemented in phases to address suspicious claims, out-of-state claims, and then all new claims.
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Existing suspicious and out-of-state claims were identified, and payments were held until the ID
verification process was successfully completed.
Another category mentioned in the finding was payments made to individuals who never lost or had a reduction
in wages. It is important to clarify that under the then-current Mississippi Employment Security Law, this type
of payment was not defined as an overpayment. State law did not require claimants to report voluntary
payments made by their employer when no work was performed. Legislation that went into effect July 1, 2021,
directly addresses this issue. The revised statute denies payment of unemployment insurance benefits to
claimants who receive voluntary payments, up to the full amount of their wages, from their employers for the
same period covered by their unemployment insurance benefits.
III. Conclusion
During the pandemic, difficult issues arose that required prompt and decisive action. In normal times, if MDES
had received an audit finding such as 2021-015, it would have acknowledged the finding and made the
recommended changes. However, MDES respectfully disagrees because the finding does not acknowledge the
extraordinary and unprecedented magnitude of the pandemic, the new and complicated federal programs, and
federal and state emergency law changes. MDES went to great lengths to follow the new rules and procedures
that were put in place by Federal and State emergency declarations. Moreover, MDES will pursue all measures
available to recoup all overpayments and improper payments incurred during the pandemic.
MDES recognizes the recommendation that we strengthen controls to ensure compliance with eligibility
requirements. However, should the same circumstances occur in the future, MDES will again follow state and
federal law to the best of our ability.
Corrective Action Plan:A corrective action plan is not needed in this case at this time as all procedures and
controls have been reinstituted. In addition, we have already implemented new and improved procedures and
controls to detect and prevent improper and fraudulent payments.
ALN Number: 17.225 — Unemployment Insurance
2021-022 - Strengthen Controls to Ensure Compliance with Matching Requirements for Unemployment
Insurance.
MDES Response:
During the pandemic, MDES was required to make swift programmatic adjustments to long standing programs
such as the extended benefits (EB) program in order to implement new federal legislation. One such adjustment
was to the percentage sharing component of the EB program. Typically, this program allows for federal
matching of 50% of the cost for EB payments to claimants; however, under the CARES Act, this matching
percentage was adjusted to 100% of the cost for EB payments to claimants.
It is also important to understand Mississippi’s history with the EB program. Mississippi has historically had a
very stable labor market and as such has not triggered on for EB in many years. Because EB is so rarely
utilized in Mississippi, it had not yet been programmed into our modernized system. Therefore, in order to
implement this program in our system, MDES needed to build this program while continuing to make all of the
other programmatic changes that were necessary to implement the CARES Act and get funds to the thousands
of Mississippians who needed our assistance. As such, when implementing this program, Mississippi
inadvertently programmed all EB claims as 100% federally matched.
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Corrective Action Plan:
MDES will continue reviewing, assessing and taking measures to strengthen controls and procedures to ensure
compliance with federal matching requirements for unemployment insurance by making adjustments to the
MDES unemployment system that will ensure that reimbursable state and local governmental entities along
with reimbursable federally recognized Indian Tribes are not included in the calculation for federal sharing of
Extended Benefits.
ALN Number: 21.019
2021-045 - Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements.
MDES Response:
Risk Assessments: MDES respectfully disagrees with this finding. We contend that the Workforce Innovation
and Opportunity Act (WIOA), the Federal law (not state law) that governs the creation and certification of the
Local Workforce Development Areas (“LWDAs’), provides the framework by which we continually assess the
risk level of the LWDAs. WIOA law also requires that LWDAs be un-certified and lose the ability to be an
LWDA and receive funding if they do not meet fiscal integrity or programmatic performance requirements as
determined through annual monitoring.
However, to more fully comply with 2 CFR 200.332(b), MDES has already adopted use of the Pre-Award Risk
Assessment Tool from the US Department of Labor’s (DOL) Core Monitoring Guide. We implemented use of
the tool for all subgrants in Program Year 2022. This Risk Assessment Tool will also be required of the
LWDAs for pass-through funding.
Required Grant Elements: We respectfully disagree with this part of the finding. It is our standard practice to
award funds through one of two primary award documents. For pass-through funding to the LWDAs required
by WIOA law, we use a Notice of Funds Availability (NFA) that has been incorporated into our GranTrak
online grant tracking system. This document incorporates 2 CFR 200.332(a) required element numbers 1, 3, 4,
5, 7, 8, 9, 11b, and 1c.
Since the LWDAs were the recipients of CARES Act funds as designated by the Mississippi Legislature, we
used GranTrak as the allocation and fund tracking mechanism since the LWDAs were familiar with this system
and process. We provided the funds to the LWDAs through an NFA and tracked all expenditures and cash
drawdowns through GranTrak. At the time of award, we had not yet been provided with either a FAIN or
Federal Award Date for these funds, so those fields are not shown on the CARES Act NFA; however, the NFA
did incorporate 2 CFR 200.332(a) required element numbers 1, 5, 7, 8, 9, 11b, and I 1c.
However, during the audit, MDES did not provide the CARES Act NFA to the auditors through an oversight.
In order to better conform to the requirements of CFR 200.332(a) as noted in the finding, MDES will work with
our contractor to update the NFA to incorporate the required elements. Until these programming changes are
completed, MDES will upload a document with 2 CFR 200.332(a) compliant data into the Attached Documents
section of NFAs in GranTrak. This will provide the data to the LWDAs for review or download.
Monitoring of Allowable Cost Spending: This Condition is discussed at length in the response to Finding
Number 1, 2021-043 - Strengthen Controls to Ensure Compliance with Allowable Costs and Activities Allowed
Requirements for Coronavirus Relief Funds.
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ALN Number: 17.225 — Unemployment Insurance
2021-023 - Strengthen Controls to Ensure Compliance with Period of Performance Requirements for
Unemployment Insurance.
MDES Response:
During the Pandemic, multiple federal programs and state executive orders were implemented utilizing a
number of different requirements for implementation dates. To complicate matters, there was ongoing guidance
that clarified and changed wording that provided the dates for the periods of performance for the multitude of
programs that MDES was implementing. The continued changes, updates, and clarifications resulted in some
issues with periods of performance. MDES has made every effort to correct the issues with these dates.
Additionally, these new federal programs were largely designed to be implemented inside of an existing
framework that was then altered to meet the requirements set down under this legislation. In doing so, some
items such as labeling changes from a prior federal program to the new federal program. When payments were
made under the previous federal program, our system continued to utilize the most recent labeling.
MDES recognizes the need to ensure that periods of performance are properly implemented. As such, we will
continue to monitor all changes and clarifications to federal programs for accuracy in the periods of
performance.
ALN Number: 17.225 — Unemployment Insurance
2021-024 - Strengthen Controls to Ensure Compliance with Special Tests — Benefit Payments
Requirements for Unemployment Insurance.
MDES Response:
During the pandemic, MDES was inundated with claims and their corresponding workload. As such, it was
necessary and prudent for us to utilize well-trained and seasoned staff in various capacities in order to better
serve the citizens of Mississippi that were in need of our services. During this time, all states were given the
opportunity to suspend Benefit Accuracy Measurement (hereafter BAM) functions so that those staff could
assist their agencies where needed. Mississippi availed itself of this opportunity. As the pandemic continued to
create high claim volume, these staff were needed to assist for an extended period of time. MDES
acknowledges that while staff were utilized for other needed functions, the timeliness of BAM processing may
have suffered. It should be noted that while BAM processing may have been delayed, these processes were
completed, and by utilizing the trained and seasoned staff as we did, MDES was able to better serve the
claimant population.
ALN Number: 17.225 — Unemployment Insurance
2021-025 - Strengthen Controls to Ensure Compliance with Special Tests — Program Integrity -
Overpayment for Unemployment Insurance.
MDES Response:
The federal pandemic programs that were instituted by MDES during this time were broad, complex, and
overlapping. In order to institute these programs timely, MDES worked tirelessly to ensure that we followed
federal guidelines and UIPLs to the best of our ability while meeting the needs of Mississippians in a timely
manner. These guidelines and UIPLs had many iterations and changes. They also reference prior UIPLs and
guidelines that create a level of complexity in a time when swift and decisive decisions were necessary to
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provide the needed assistance to claimants. MDES continues to review programs to determine proper and
timely payments and offsets for certain programs, and will make adjustments and necessary programmatic
changes to ensure proper payments and offsets are made in accordance with federal and state guidelines.
Corrective Action Plan:
MDES will strengthen controls to ensure compliance by testing program integrity, internal reviews, and
implementing preventative fraud detection measures. This will be accomplished by monitoring the
implementation and changes to federal programs including their respective recovery provisions.
ALN Number:17.225- Unemployment Insurance
2021-026 - Strengthen Controls to Ensure Compliance with Reporting Requirements for Unemployment
Insurance
Audit Finding:
No evidence of written supervisory approval was provided for the reports.
MDES Response:
During the height of the emergency created by the pandemic in 2020 and 2021, MDES relied upon the
procedures encoded in ReEmployMS to handle non-emergency tasks. After the relative subsidence of the
Covid-19 crisis and review of our activities, MDES better appreciates the value of ensuring that appropriate
staff review reports, and of obtaining appropriate documentation of each examination by report. MDES is
accustomed to adhering to internal and interdepartmental reviews, validations and approvals. Due to the vast
amount of work, some previously established approval protocols were not promptly and consistently followed.
MDES will continue to review and evaluate its internal protocols and strengthen internal controls to ensure
the review of all reports and documentation of such activities in the future.
Audit Finding:
Supporting documents could not be provided for the adjustment amounts on the penalties and
interest (Item 4)
MDES Response:
MDES has requested special reports and queries providing this information. When these reports become
available, MDES will share these results with you.
Audit Finding:
During review of eight monthly ETA 2112 reports the following issues were noted:
e For one report, month ending June 2021, PUA disbursements (Line 42C) was understated by
$12,228,111.86.
e Four reports for the months ending August 2020, and March, May and June 2021, FUA transfers
were not reported on line 15 as required.
MDES Response:
An agency administrative error generated the understatement of PUA disbursements for the month ending June
2021. MDES has corrected this error.
With respect to the four instances involving the missed opportunities to reported FUA transfers on line 15,
MDES misinterpreted the reporting instructions outlined in the Unemployment Insurance Program Letter
(UIPL). MDES has taken corrective action by amending the affected reports. Furthermore, MDES will
strengthen its controls over the ETA-2112 reporting process by completing a more thorough supervisory review
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accompanied by more detailed documentation.
Audit Finding:
During review of monthly reports for ETA-9050, ETA-9052, and ETA-9055, there was no written
supervisory approval for any of the reports reviewed. Below is a listing of the reports reviewed:
e ETA-9050 for months ending July and October 2020 and January and April 2021.
e ETA-9052 for months ending August and November 2020 and February and May 2021
e ETA-9055 for months ending September and December 2020 and March and June 2021.
MDES Response:
During the height of the emergency created by the pandemic in 2020 and 2021, MDES relied upon the
procedures encoded in ReEmployMS to handle non-emergency tasks. After the relative subsidence of the
COVID-19 crisis and review of our activities, MDES better appreciates the value of ensuring the appropriate
staff review reports and of obtaining appropriate documentation of each examination by report. Moreover,
MDES has procedures in place to ensure the review of all reports and documentation of such activities
currently, and in the future.
Audit Finding:
For the ETA-9050 report MDES failed to verify the accuracy of the unemployment insurance data
notated by the “Fail” provided by the Department of Labor during the data validation performed for the
reporting period of July 1, 2020, to September 30, 2020.
MDES Response:
MDES disputes that it failed to verify the accuracy of the data reported on the ETA 9050. The data validation
(DV) population contains several reports that verify payment activities. During the process of validating the
payment population, staff discovered differences between the validation counts and the reported counts. MDES
continues to investigate the source of these differences in the counts.
Audit Response:
During review of four monthly reports for ETA-9052, the report for month ending November 2020 was
not submitted timely. The report was due on December 20, 2020, but it was not transmitted until
February 9, 2021.
MDES Response:
MDES timely uploaded this report to the DOL reporting portal. However, because of apparent technical issues,
the report did not upload properly. MDES did not receive an error message of this issue. Upon notice from a
DOL supervisor that the report remained in “pending” status, MDES re-submitted the report successfully.
ALN Number: 17.225 — Unemployment Insurance
2021-027 - Strengthen Controls to Ensure Compliance with Special Tests — Employer Experience Rating
Requirements for Unemployment Insurance.
MDES Response:
During the pandemic, MDES was required to utilize long standing programs such as the DUA program in order
to implement new federal legislation. Federal guidelines advised states to utilize the DUA program as the base
to for implementation of the PUA program. In implementing the programing in such a way, certain built-in
parameters were moved to the PUA program. This created certain instances where weeks were non-charged
due to those parameters.
Corrective Action Plan: MDES will continue to strengthen controls to ensure compliance with special tests by
reviewing employer experience rating requirements for the unemployment insurance program. This will be
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accomplished by monitoring modifications to employer non-charging.
ALN Number 97.050- Lost Wages Assistance
2021-028 - Strengthen Controls to Ensure Compliance with Reporting Requirements for Lost Wages
Assistance
MDES Response:
MDES acknowledges that there were delayed and isolated incidents when the Lost Wages Assistance reports
were not submitted timely, however, MDES has corrected this issue, and all Lost Wage Assistance reports will
be submitted timely in the future.
ALN Number 17.225- Unemployment Insurance and 97.050- Lost Wages Assistance
2021-029 - Strengthen Controls to Ensure Proper Review over the Schedule of Expenditures
MDES Response:
MDES concurs with this finding.
Corrective Action Plan:
MDES will ensure a more thorough review of the ALN is completed for future grant schedule preparation.
Sincerely,
MISSISSIPPI DEPARTMENT OF EMPLOYMENT SECURITY
DocuSigned by:
Robin Stewart
Interim Executive Director
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Employment
Security (MDES) Management
Department of Employment Security — Activities Allowed/Allowable Costs - Material
Weakness/Material Noncompliance
2021-043 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities
Allowed for Coronavirus Relief Funds
Much of MDES’ argument that the questioned costs should be removed relies on Mississippi State Law
and disregards the requirements of the federal CRF grant. MDES asserts in their response that, because the
MS Legislature appropriated money to specific types of workforce development, that those expenditure
automatically became eligible for CRF funding. While the MS Legislature has the authority to appropriate
CRF money to certain types of workforce development, those items still must have met the three allowable
cost requirements of the CRF funds. State law authorizing equipment purchases cannot overrule the federal
program guidelines. MDES failed to document or perform adequate due diligence to ensure that the fixed
asset purchases made by their subrecipients met the grant requirements. These expenditures were not
properly justified with any cost comparison to ensure that the purchase was the most cost-effective solution.
Additionally, MDES could not provide any compelling evidence that these expenditures were necessary
due to the pandemic.
As stated in the finding, MDES could not provide documentation that the “student vouchers” paid for with
CRF monies were necessary due to the pandemic. MDES could not provide compelling evidence that these
students were new students, that they completed the courses, that the courses were able to benefit the
students in the workforce, or that they were even necessary due to the pandemic.
MDES’ assertion that extensive documentation has been provided to OSA to validate these purchases is
erroneous. MDES provided documentation to OSA, but that documentation did not support that the charges
were necessary or justified. The justifications for necessity in some instances was nonsensical, and did not
support that the purchases were necessary due to the pandemic. In the example noted by MDES in their
response, two lathes costing a total of $313,800 were purchased to assist with displaced internships. Those
two lathes served 22 students, for a per student price of $14,263. By fall of 2021, the internships had
resumed — meaning that the lathes were used for one semester. The college in question provided no
evidence that any other method of fulfilling the internships was considered, and no other options for a more
cost-effective solution rather than buying over $300,000 in fixed assets was contemplated. In a second
example given by MDES, the college purchased drones to assist in training drone pilots. MDES response
notes that drones are an emerging technology and that additional drone pilots will be needed by 2025;
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however, MDES does not provide any compelling justification as to why these drones and trained drone
pilots were necessary due to the pandemic.
Department of Employment Security - Eligibility - Material Weakness/Material
Noncompliance
2021-015 Strengthen Controls to Ensure Compliance with Eligibility Requirements for
Unemployment Insurance
The Office of the State Auditor (OSA) acknowledges that the Mississippi Department of Employment
Security (MDES) was faced with an unexpected and staggering task to ensure unemployment benefits were
paid to individuals during the pandemic. OSA also acknowledges that certain federal guidelines were
provided that MDES had to comply with in order to receive additional federal unemployment funds. While
MDES’ response to the finding focuses on the federal requirements and state guidance to waive or ignore
existing controls, MDES fails to identify any way that the agency mitigated any of the fraud risks or
potential for overpayments created by waiving or overriding these controls. This failure on the part of
MDES resulted in a 301% increase in known overpayments from fiscal year 2020 to 2021. This failure to
safeguard the state’s assets is the basis for the material weakness finding. Additionally, MDES fails to
acknowledge that the agency was required by the same type federal guidance referenced in their response
to the finding (UIPL Letters and Change Notices) to ensure adequate and proper fraud detection and
prevention techniques were being utilized by the agency.
Moreover, while MDES did receive federal guidance on making unemployment payments more accessible
to those directly impacted by the pandemic, the options provided by the federal government were to either
modify or suspend the work search requirements for individuals or employers directly impacted by COVID-
19 due to an illness in the workplace or direction from a public health official to isolate or quarantine
workers. States were also given the flexibility to respond to the COVID-19 emergency in a broader way,
if they chose to do so (emphasis added by auditor). (Unemployment Insurance Program Letter Number
13-20, Change 1, Attachment I, Question 2). MDES chose to suspend the requirement for all
unemployment claims, and not only those that arose from an illness in the workplace or from an order to
isolate or quarantine workers. The decision to implement broader flexibility and completely waive work
search requirements were made by MDES. By MDES’ own admission in other auditee responses to OSA,
MDES stated that they requested the Governor’s Office waive the specific requirements. Additionally, in
each Executive Order (1462, 1481, 1502, and 1510), MDES was given flexibility to reassess and modify
these measures prior to their expiration date in the orders.
Additionally, The Department of Labor (DOL) included program integrity language in all of the major
pieces of guidance associated with the state implementation of the CARES Act programs and provisions
(Unemployment Insurance Program Letter Number 28-20). Program Integrity requirements for the regular
unemployment program and unemployment programs authorized by the CARES Act were to operate in
tandem, and CARES Act program requires that states must ensure that only eligible individuals receive
benefits (Unemployment Insurance Program Letter Number 23-20). Both UIPL letters 23-20 and 28-20
specify that the states must make efforts to rapidly and proactively prevent, detect, and investigate
fraudulent activity; establish and recover fraud overpayments; and pursue criminal and civil prosecution to
deter fraud. Specifically, states were strongly encouraged to implement the following measures to minimize
fraud in the unemployment system:
1) Social Security Administration Cross Match
2) Systematic Alien Verification for Entitlement
3) Incarceration cross matches
4) Internet Protocol Address checks
5) Data Analytics to cross reference claims for indicators of fraud.
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Furthermore, many of the most effective tools to deter and detect fraud were available to MDES in the
Integrity Data Hub (IDH), and were available to states for well over a year. These included:
1) Interstate Suspicious Actor Repository to match claims across states
2) Foreign IP Address verification to receive flags on claims filed from IP addresses outside of
the United States
3) Data Analytic tools
4) Fraud Alert Systems
5) Identify Verification for fraud scoring information, including flagging synthetic identities.
MDES has stated that they utilize the IDH; however, auditors cannot determine how effectively these
programs were utilized considering the high amount of overpayments that were made during fiscal year
2021. Additionally, one of the specific fraud risks the UIPL, incarceration cross matches, were not
performed by MDES, and resulted in overpayments to incarcerated individuals. These incarcerated
individuals were able to apply for benefits when MDES overrode or turned off the automated controls and
did not implement any compensating controls to ensure payments were proper.
In summary, regardless of the federal requirements or Executive Orders issued, MDES is still responsible
for ensuring the accuracy of unemployment claims. In order to assure the accuracy of those claims, MDES
should have implemented compensating controls to safeguard the unemployment trust fund when other
controls were waived or overrode. The ultimate responsibility to ensure that unemployment payments were
accurately paid out and that overpayments were kept to a minimum is the responsibility of MDES personnel.
Department of Employment Security - Subrecipient Monitoring - Material
Weakness/Material Noncompliance
2021-045 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements
When documentation of pre-award risk assessments was requested during the audit process, MDES did not
provide any auditable documentation to the auditors. While MDES stated that they relied upon the same
pre-award risk assessment for the CRF grants as the Workforce Innovation and Opportunity Act (WIOA)
grants, none of the WIOA pre-award risk assessments were provided. Personnel at MDES stated, when
this documentation was requested, that “there was no risk assessment of the four local areas performed prior
to the awarding of the CRF funds...We work closely with the local areas on a daily basis, perform yearly
subrecipient monitoring, and regularly conduct technical assistance all of which are closely monitored by
MDES management for any indication that we should reassess the locals as anything but low risk. We
understand that this is not documented and therefore does not meet the risk assessment requirement but
wanted to give the context of our actions.”
MDES appears to concur that they did not provide documented evidence to auditors that all required grant
elements were presented to grantees. It should be noted that this evidence has still not been provided to
auditors as of the date of this report.
Lastly, the questioned costs as outlined in finding 2021-043 verify that MDES did not have proper
monitoring procedures in place to monitor subrecipients of the CRF grant program. MDES disagrees that
these costs should be questioned (as noted in their response to finding 2021-043); therefore, they do not
concur that their monitoring procedures and controls failed. OSA has explained, in detail, both in finding
2021-043 and in the rebuttal to MDES’ response above why the auditor questioned these expenses. Please
refer to finding 2021-043 for further information.
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STATE OF MISSISSIPPI
GOVERNOR TATE REEVES
DEPARTMENT OF FINANCE AND ADMINISTRATION
LIZ WELCH
EXECUTIVE DIRECTOR
FINANCIAL AUDIT FINDINGS
Shad White May 24, 2022
Office of the State Auditor
State of Mississippi
Post Office Box 956
Jackson, Mississippi 39205-0956
Dear Mr. White,
In reference to your letter dated April 4, 2022, we submit the following responses and corrective
action plans to the financial audit findings for the Department of Finance and Administration
(DFA) for the fiscal year ended June 30, 2021.
AUDIT FINDINGS:
MATERIAL WEAKNESSES
Finding Number Finding Description
2021-002 Strengthen controls over change logs in SPAHRS.
Response: We acknowledge the finding.
Turning on the Natural Security logs would require a major
upgrade to SPAHRS and would introduce functionality that
has never been utilized. This would be a major change
with high risks to consider. DFA/MMRS is in the process
of planning the HR/Payroll implementation of MAGIC and
does not want to take on the risk of doing a major change
to SPAHRS at this time.
DFA/MMRS is in process of upgrading the Adabas version
to 8.5. This project, with assistance from ITS (MS
Information Technology Services), will allow for Natural
Security logging of the administrative application by
authorized users from the TSO nucleus. Our planned
logging implementation will incorporate a review of the logs
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291
Corrective Action:
2021-003
Response:
with signoff. This logging does not include processes ran
in batch. DFA/MMRS is currently in the first Phase of
implementation of the HR/Payroll MAGIC Project. This
project implementation will move us off SPAHRS/Legacy
systems.
A. DFA is working on the MAGIC Phase II
implementation.
B. Michael Gonzalez is the contact person for this
corrective action.
C. The anticipated completion date of Phase II is June 1,
2023.
D. N/A
CFO qualifications and attend mandatory training
We acknowledge the finding.
The Department of Finance and Administration (DFA) is
the primary agency responsible for state government
financial and administrative operations, and we fully accept
and embrace the magnitude of that responsibility.
However, while DFA is the executive branch control
agency over governmental accounting and financial
reporting, and in particular, the completion of the annual
comprehensive financial report, we rely heavily on the
cooperation and input of every other state agency to
successfully accomplish that task.
We acknowledge that Section 7-7-3 of Miss. Code Ann.
(1972) requires DFA to conduct training seminars on a
regular basis to ensure that agencies have access to
persons proficient in the correct use of the state accounting
system. Before implementation of the new statewide
system and since that time, we have provided class
training, one-on-one personalized training and detailed
assistance via the call center to agency personnel to help
them understand the processes required for daily workflow.
We have training material, work instructions and job aids
available on the internet that are easily accessible. While
292
Corrective Action:
Sincerely,
Liz Welch
Executive Director
we have clearly stated that these training sessions are
necessary, we continue to have agencies that do not
attend.
The finding specifically calls into question the lack of
qualifications and skill requirements of agency accounting
personnel, and specifically mentions the lack of qualified
personnel serving as Chief Fiscal Officers. While we have
the responsibility to provide systems to facilitate the
financial reporting and operations of the state and to
provide training to employees that use these systems, we
do not have the oversight of the hiring or selection of
agency employees. Hiring of qualified employees is the
responsibility of each state agency head.
A. The audit finding recommendation is for DFA to
implement mandatory training sessions for accounting
personnel and chief fiscal officers.
DFA will continue to provide training opportunities for
accounting personnel and chief fiscal officers, and will
pursue and provide additional training as funding allows.
DFA will also consider requiring attendance, however
enforcement of that will be difficult.
B. Reginald Welch is the contact person for this corrective
action.
C. The corrective action will be implemented during fiscal
year 2022.
D. N/A
293
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STATE OF MISSISSIPPI
GOVERNOR TATE REEVES
DEPARTMENT OF FINANCE AND ADMINISTRATION
LIZ WELCH
EXECUTIVE DIRECTOR
November 10, 2022
SINGLE AUDIT FINDINGS
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
The Mississippi Department of Finance and Administration (DFA) respectfully submits
its response to the Office of the State Auditor’s single audit findings for Fiscal Year
2021. On the following pages, DFA has provided its corrective action plan for each
finding by (a) describing specific steps to be taken to correct the situation; (b) providing
the name of the contact person responsible for the corrective action; (c) providing the
anticipated completion date for the corrective action; and (d) stating whether we concur
with the finding.
AUDIT FINDINGS:
21.023 Emergency Rental Assistance
Reporting
2021-030 Strengthen Controls to Ensure Proper Review over the Schedule of
Expenditures of Federal Awards
Response:
The Department of Finance and Administration will implement controls to ensure that the
proper ALN is assigned to the grant schedule and the agency will properly review and
reconcile the schedule of expenditures of federal award for reporting. DFA concurs with
this finding and recommendation.
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295
Corrective Action Plan:
A. Expenditure reports and grant schedules will be prepared by staff in Department of
Finance and Administration (DFA) — Office of Budget and Accounting and the
reports and schedules will be reviewed for completeness and accuracy by Deputy
Executive Director for DFA. Any discrepancies in the review will be discussed and
corrected for submission.
B. The contact person responsible for this corrective action is Reginald Welch,
Deputy Executive Director with the Department of Finance and Administration.
C. This corrective action will be completed by December 31, 2022.
D. N/A
21.023 Emergency Rental Assistance
Reporting
2021-031 Strengthen Controls to Ensure Compliance with Reporting Requirements for
Emergency Rental Assistance.
Response:
Mississippi Home Corporation will implement controls to ensure adequate segregation of
duties for reporting. DFA concurs with this finding and recommendation.
Corrective Action Plan:
A. Reports will be prepared by MHC’s Authorized Representative listed in the
Treasury portal; a separate review of the prepared report will be conducted by the
Quality Control Specialist; any discrepancies between the two reviews will be
discussed and corrected; final approval/submission will be conducted by MHC’s
Authorized Representative.
B. The contact person responsible for this corrective ‘action is Lisa Coleman, SVP of
Federal Grants with the Mississippi Home Corporation.
C. This corrective action will be completed by December 31, 2022.
D. N/A
21.023 Emergency Rental Assistance
Monitoring
2021-032 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements.
296
Response:
DFA does not concur with the finding because DFA was simply a pass-through agency of
the funds and was required to draw down the funds in light of an impending federal
deadline. It is not possible for DFA to conduct monitoring as it has not been appropriated
any funds nor does it have the personnel or other resources to do so.
Corrective Action Plan:
A. Mississippi Home Corporation should hire a 3“ party monitor.
B. Mississippi Home Corporation Director Scott Spivey
D. N/A
Liz Welch
Executive Director
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{
Mississippt STATE DEPARTMENT OF HEALTH
SINGLE AUDIT FINDINGS
October 27, 2022
Honorable Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
We have reviewed the audit finding below in reference to the Mississippi State Department of Health 2021 fiscal
year audit. Listed below is our individual response and plan for corrective action:
Audit Finding:
CFDA Number: 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)
Requirement: Reporting
2021-033 The Mississippi State Department of Health Should Strengthen Controls to Ensure
Compliance with Reporting Requirements
Response: The agency concurs with the finding.
Corrective Action: The program area this grant falls under will identify staff responsible for submitting the
Federal Funding Accountability and Transparency Act (FFATA) reports. In addition,
they will develop internal policies and procedures for the FFATA process.
Name of contact person responsible for corrective action: Melody Winston
Anticipated completion date of corrective action: December 2022
Should you have any questions regarding our response or corrective action plan, please feel free to contact Sharon
Dowdy, 601-576-7359.
Sincerely,
DocuSigned by:
Daniel Edney, MD, KACP, FASAM
State Health Officer
570 East Woodrow Wilson Post Office Box 1700 Jackson, MS 39215-1700
601-576-8090 1-866-HLTHY4U www.HealthyMS.com
Equal Opportunity in Employment/Services
299
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Robert G. Anderson
Executive Director
MISSISSIPPI DEPARTMENT OF HUMAN SERVICES
FINANCIAL AUDIT FINDINGS
Hon. Shad White, State Auditor March 4, 2022
Office of the State Auditor
State of Mississippi
Post Office Box 956
Jackson, Mississippi 39205-0956
Dear Mr. White:
Enclosed for your review is the agency’s official response to the financial audit findings as defined
in the Mississippi Department of Human Services (MDHS) Fiscal Year 2021 Financial Audit
Management Report, along with the corrective action plan that is to be implemented.
FINANCIAL AUDIT FINDING:
2021-001 Strengthen Controls to Ensure Proper Review Processes for Financial
Reporting.
MDHS Response: MDHS agrees that controls should be strengthened to ensure proper review
processes for financial reporting.
Corrective Action Plan:
MDHS acknowledges weaknesses in some of its controls regarding the
review and submission of its GAAP packet. MDHS will develop and
implement written policy and procedure over the review and approval of the
Federal Subgrant Activity Schedule. MDHS will work to increase the
communication within Budgets and Accounting, implement further levels
of review, and reach out to our cognizant agency for Subgrant Federal
Activity Schedule training for staff.
In the instances in which amounts were recorded and coded to the incorrect
CFDA number, the instances in which amounts recorded as “amounts
passed to sub-grantees” did not agree to amounts recorded as “amounts
passed to subrecipients” and the instances in which the amounts recorded
as “Paid to Sub-grantee” did not agree to amounts reported on the KOB1
report, MDHS recognizes the errors. MDHS will put in place the necessary
internal procedures to ensure that accurate information is included in future
reports.
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301
Robert G. Anderson
Executive Director
MISSISSIPPI DEPARTMENT OF HUMAN SERVICES
Additionally, as it relates to supporting documentation not agreeing with the
Federal Subgrant Activity Schedule, MDHS agrees that the documentation
submitted was insufficient. MDHS will put in place the necessary internal
procedures to ensure that accurate supporting documentation is included in
future reports.
MDHS is committed to fostering a better communication within the
divisions to ensure that accurate information is provided. MDHS will
actively seek training to be able to accurately report and review financial
information. MDHS will implement an additional level of review prior to
the submission of the Federal Subgrant Activity Schedule. Further, MDHS
will be updating the SOPs to reflect the additional internal controls.
Wayne Carpenter, Deputy Executive Director of Finance is the responsible
party for implementing the Corrective Action Plan. The anticipated
completion date is July 1, 2022.
We appreciate the courtesy and professionalism demonstrated by your field audit staff throughout
the audit. Should you have any questions regarding our responses or corrective action plan, please
do not hesitate to contact Sandra Griffith, Inspector General at 601-968-8369.
Respectfully,
Robert G. Anderson
Executive Director
pe: Kameron Harris, Chief Compliance Officer
Wayne Carpenter, Deputy Executive Director of Finance
Patrick Black, General Counsel
Sandra Griffith, Inspector General
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302
Robert G. Anderson
Executive Director
MD
MISSISSIPPI DEPARTMENT OF HUMAN SERVICES
SINGLE AUDIT FINDINGS
Shad White, State Auditor September 20, 2022
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
Dear Auditor White:
Enclosed for your review is the agency's official response and corrective action plan to the single audit
findings and other findings as outlined in the Mississippi Department of Human Services (MDHS) Fiscal
Year 2021 Single Audit Management Report. In submitting this report, | would note that the Senior
Leadership Team in place at this time is entirely different from the team who was on board when I became
Executive Director in March 2020.
SINGLE AUDIT FINDINGS:
2021-010 The Mississippi Department of Human Services Should Strengthen Controls to
Ensure Compliance with the Federal Funding and Accountability and
Transparency Act (FFATA) Reporting Requirements.
Response: MDHS concurs that controls should be strengthened over FFATA
reporting requirements.
Corrective Action Plan:
1. Strengthen controls to ensure compliance with FFATA reporting requirements.
A. MDHS is working to issue a Standard Operating Procedure that establishes
responsibility and provides guidance for Federal Funding and
Accountability and Transparency Act (FFATA) reporting requirements.
MDHS will also implement a process to ensure that FFATA reporting is
being done and verified on a periodic basis.
B. Responsible Parties: Wayne Carpenter, Deputy of Finance and Samuel
Cole, Director of Procurement Services
C. Anticipated Completion Date: The anticipated completion date is October
31, 2022.
2021-011 The Mississippi Department of Human Services Should Strengthen Controls to
Ensure Compliance with Reporting Requirements for Pandemic EBT Food
Benefits.
200 S. Lamar St., P.O. Box 352 | Jackson, MS 39205 | (601) 359-4500
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303
Robert G. Anderson
Executive Director
— or Mer OF HUMAN SERVICES
Response: MDHS concurs that controls should be strengthened to ensure compliance with
reporting requirements for Pandemic EBT Food Benefits.
Corrective Action Plan:
1. Strengthen controls to ensure compliance with reporting requirements for
pandemic EBT food benefits.
A. CFDA numbers were combined on the Federal Grant Activity Schedule;
however, this did not occur in any other federal reporting of PEBT Benefits.
MDHS will ensure staff continue to follow the proper processes required
for federal reporting.
B. Responsible Parties: Debra Dixon, Chief Financial Officer, and Wayne
Carpenter, Deputy Executive Director of Finance
C. Anticipated Completion Date: This corrective action has been
implemented.
2021-012 The Mississippi Department of Human Services Should Strengthen Controls Over
the Compilation and Submission of Required Federal Reports for the Social
Services Block Grant (SSBG) Program.
Response: MDHS concurs that controls should be strengthened over the review and approval
of the Social Services Block Grant Post Expenditure Report and that the records of
participants for each category of service should be adequately maintained for
auditing purposes.
Corrective Action Plan:
1. Strengthen controls over the compilation and submission of federal reports:
A. MDHS has been reviewing its Standard Operating Procedures (SOPs) and
working to ensure that internal processes and procedures are documented
and up-to-date to promote consistency with documentation and reporting
required to ensure programmatic and fiscal compliance. A written SOP
specifically for SSBG federal reporting will be provided to all participating
divisions that details both the proper source(s) of required data and proper
process for calculation of the data to be reported. The location for
maintaining all supporting documentation from the report for future audits
will also be addressed.
B. Responsible Parties: Debra Dixon, Chief Financial Officer, and Rachelle S.
Richardson, Deputy Executive Director of Age-Related Programs
C. Anticipated Completion Date: SOP(s) finalized by September 30, 2022
2021-013 The Mississippi Department of Human Services Should Strengthen Controls over
Onsite Monitoring for the Supplemental Nutrition Assistance Program (SNAP),
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304
Robert G. Anderson
Executive Director
HUMAN SERVICES
MISSISSIPP| DEPARTMENT OF
Temporary Assistance for Needy Families (TANF), Child Care and Development
Block Grant (CCDF), Low Income Home Energy Assistance Program (LIHEAP),
and Social Services Block Grant (SSBG) Programs.
Response: MDHS Concurs that controls should be strengthened over On-Site monitoring for
SNAP, TANF, CCDF, LIHEAP and SSBG Programs.
MDHS also concurs with the following specific recommendations of the OSA and
incorporates those recommendations as the foundation for the MDHS Corrective
Action Plan (CAP) related to this finding. Many internal controls at MDHS have
been reevaluated and strengthened since new leadership arrived in March 2020 and
MDHS continues to review recommendations and avenues to further strengthen
internal controls.
Corrective Action Plan:
1. Strengthen controls over the subrecipient monitoring process:
A. The Office of Compliance, Division of Monitoring continues to review and
update the monitoring Standard Operating Procedures (SOPs) as necessary
to ensure processes are adequate and effective. Staff are trained on updates
and/or provided notification of new updates to the SOP to ensure continued
compliance with monitoring the agency’s subgrant agreements.
B. Responsible Party: Kameron Harris, Chief Compliance Officer, Director of
Monitoring, Laketha Gilmore
C. Completion Date: This corrective action has been implemented and is an
ongoing process as the trainings are reoccurring.
2. Ensure subgrants are monitored timely and the Report of Findings is issued in
a timely manner:
A. The Office of Compliance, Division of Monitoring continues to improve
upon the monitoring review process. The Division annually assesses SOPs
to ensure the most effective procedures are in place to ensure the Agency’s
compliance with the monitoring process.
B. Responsible Parties: Kameron Harris, Chief Compliance Officer, Director
of Monitoring, Laketha Gilmore
C. Anticipated Completion Date: This corrective action has been
implemented.
3. Maintain all supporting monitoring tools, reports, and correspondence in the
monitoring file:
A. The Division of Monitoring provides training to employees on the
monitoring process upon hiring and annually to ensure employees are
current on requirements regarding the monitoring process.
B. Responsible Parties: Kameron Harris, Chief Compliance Officer, Director
of Monitoring, Laketha Gilmore
C. Anticipated Completion Date: This is an ongoing process as the trainings
200 S. Lamar St., P.O. Box 352 | Jackson, MS 39205 | (601) 359-4500
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305
Robert G. Anderson
Executive Director
ee ence OF HUMAN SERVICES
are reoccurring.
4. Monitor eligibility for all subrecipients and ensure subrecipients maintain
adequate documentation that supports the eligibility determination of their
clients.
A. Please refer to response in #3 of 2021-013.
B. Responsible Parties: Kameron Harris, Chief Compliance Officer, Director
of Monitoring, Laketha Gilmore
C. Anticipated Completion Date: This is an ongoing process as the trainings
are reoccurring.
2021-014 The Mississippi Department of Human Services Should Strengthen Controls Over
Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing
Requirements.
Response: MDHS concurs that it needs to strengthen controls over subrecipient monitoring to
ensure compliance with Uniform Guidance Auditing requirements.
Corrective Action Plan:
A. Please refer to MDHS response in 2021-013 for measures already taken and
ongoing by MDHS and all future corrective actions.
B. Responsible Parties: Kameron Harris, Chief Compliance Officer, Director
of Monitoring, Laketha Gilmore
C. Anticipated Completion Date: This corrective action has been implemented
and is ongoing.
OTH-2021-008 The Mississippi Department of Human Services Should Strengthen Controls to
Ensure Compliance with Eligibility and Benefit Requirements of the Temporary
Assistance for Needy Families Program.
Response: MDHS concurs that it should strengthen controls to ensure compliance with
eligibility and requirements for the Temporary Assistance for Needy Families
Program (TANF).
Corrective Action Plan:
1. To strengthen controls and ensure compliance, effective November 01, 2022,
MDHS will complete the following:
A. A statewide case review will be conducted quarterly on 10% of open TANF
cases.
B. All MDHS-312, Personal Responsibility Contract, documents will be
scanned to the case file at both application and redetermination.
C. All staff with TANF caseloads will be required to complete an annual
refresher training.
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306
Robert G. Anderson
Executive Director
MISSISSIPPI DEPARTMENT OF HUMAN SERVICES
2. Responsible Parties: Shenetta Drone, Deputy Executive Director for Economic
Programs, Kristi Kinnel, Division Director of Economic Assistance Eligibility
3. Anticipated Completion Date: This is an ongoing process, beginning November
01, 2022.
OTH-2021-007 The Mississippi Department of Human Services Should Strengthen Controls Over
Systems Edits for Child Care Payment System (CCPS).
Response: MDHS concurs that controls should be strengthened over systems edits for the Child
Care Payment System (CCPS).
Corrective Action Plan:
1. The Division of Early Childhood Care and Development (DECCD) requested
an update to the online Child Care Payment Program (CCPP) subsidy
application for the purposes of updating the business rules for the application
to not allow an out-of-state applicant to apply for childcare subsidy in
Mississippi. If an applicant enters an out-of-state address, the application is
determined ineligible. Additionally, as a verification to ensure compliance with
CCPP eligibility rules, DECCDeligibility staff will review each application and
verify specifically to determine whether an applicant is or is not a Mississippi
resident.
2. Responsible Parties: General Counsel, Patrick Black, Division Directors for
DECCD, Vicki Lowery and Chad Allgood
3. Anticipated Completion Date: The updated business rule has previously been
implemented effective August 22, 2022.
The Mississippi Department of Human Services would like to emphasize that new management and new
processes are in place across the entire agency. MDHS appreciates the courtesy and professionalism
demonstrated by your field staff throughout this audit. Should you have any questions regarding our
responses or corrective action plan, please do not hesitate to contact Brett Robinson, Internal Audit Director,
at 601-359-4697.
Sincerely,
Robert G. Anderson
Executive Director
RGA
200 S. Lamar St., P.O. Box 352 | Jackson, MS 39205 | (601) 359-4500
Offering Mississippians young and old tangible help today to create lasting hope for tomorrow.
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STATE OF MISSISSIPPI
Tate Reeves
Governor
MISSISSIPPI DEPARTMENT OF MARINE RESOURCES
Joe Spraggins, Executive Director
FINANCIAL AUDIT FINDINGS
February 25, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dr. Mr. White:
The Mississippi Department of Marine Resources has received the drafter audit report and drafted
findings for the FY21 agency audit. Please find our response below to finding 2021-004 as well as our
corrective action plan.
AUDIT FINDINGS:
2021-004 AUDIT ADJUSTMENTS
Response: The Department of Marine Resources recognizes revenue on a cash basis. All funds are
recorded in full as they are received by the agency. With the GOMESA fund, we recognize that revenue,
for GAAP purposes, should be deferred if not earned by fiscal year end. The Department of Marine
Resources did defer the GOMESA revenue in the GAAP packet. However, as an oversight, we deferred
the full amount of revenue without recognizing the $6,051,392 in FY21 expenditures for the fiscal year as
earned revenue. Therefore, revenue for FY21 was understated. Additionally, in the GAAP packet, the
MDMkR accrued an invoice that a goods receipt had already been processed for. The trial balance
reflected both the goods receipt and the accrual, thus overstating expenditures by in the amount of
$496,616. Although these entries need to be made to correct this error and adjust the books, the
Mississippi Department of Marine Resources does not feel these errors are a material weakness in our
internal control.
1141 Bayview Avenue * Biloxi, MS 39530-1613 * Tel: (228) 374-5000 « dmr.ms.gov
309
Corrective Action Plan:
A. To book expenditures incurred during the fiscal year as earned revenue via the GAAP packet.
Before accruing expenditures, to thoroughly evaluate what has been posted and reflected in the
trial balance to prevent double booking
B. Contact: Brandi Busby, Director of Finance at 228-523-4099
C. Anticipated completion date for corrective action is June 30, 2022.
Sincerely,
Mis issippi Department of Marine Resources
310
STATE OF MISSISSIPPI
TATE REEVES, GOVERNOR
DEPARTMENT OF PUBLIC SAFETY
SEAN J, TINDELL, COMMISSIONER
March 10, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P. O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
This letter is in response to the audit for fiscal year 2021 prepared by CliftonLarsonAllen LLP.
AUDIT FINDINGS:
2021-009 = Material Weakness in Internal Control over Financial Reporting
Response: The Department of Public Safety acknowledges this finding.
Corrective Action Plan:
A: DPS has recently created a Financial Reporting section within its Accounting Division. The
agency will implement a written policy which requires the Financial Reporting section to review
and reconcile due to and due from balances annually.
B: Responsible for implementing the corrective action plan will be Alison Brown, Comptroller
C: The anticipated completion date for this corrective action plan is July 1, 2022.
Respectfully,
Sean J. Tindell
Commissioner
POST OFFICE BOX 958 @ JACKSON, MISSISSIPPI 39205-0958 @ TELEPHONE 601-987-1212 @ www.dps.state.ms.us
311
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Brad White
Executive Director
P.O. Box 1850
Jackson, MS 39215-1850
Telephone (601) 359-7249
FAX (601) 359-7050
GoMDOT.com
Brian D. Ratliff
Deputy Executive Director/Chief Engineer
Lisa M. Hancock
Deputy Executive Director/Administration
Charles R. Carr
Director, Office of Intermodal Planning
SINGLE AUDIT FINDINGS
October 21, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
We have received the Single Audit Management Report and the following details our response to
the Audit Findings for fiscal year 2021:
AUDIT FINDINGS:
CFDA
Number 20.205 — Highway Planning and Construction
Compliance
Requirement Subrecipient Monitoring
2021-019 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements
Response: © MDOT concurs with this finding.
Corrective Action Plan:
A. To internal audit division has implemented procedures beginning fiscal year
2022 (FY 2020 audit reports) to perform follow up review, in addition to the
single audit certification, to determine if a management letter should be issues
for any reported findings that are related to the MDOT
B. Emily Harrington, CPA — Director of Internal Audit
C. June 8, 2022
Transportation: The Driving Force of a Strong Economy
313
Shad White, State Auditor
Single Audit Finding P
CFDA
Number
Compliance
20.205 — Highway Planning and Construction
Requirement Special Test & Provisions — Wage Rate
2021-020
Response:
Controls Should Be Strengthened to Ensure Compliance with Wage Rate
Requirements
MDOT does not concur with this finding.
While MDOT’s Contract Administration Division (CAD) does not have control
when the contractors or subcontractors submit their weekly statement(s), Contract
Administration Division does have control over the issuance of warrants to
contractors. Contract Administration Division has complied with its previous 2019
corrective action plan to ensure no estimate is processed for payment with
delinquent payrolls outstanding. See the 2020 corrective action plan below.
Corrective Action Plan:
A. Contract Administration Division is preparing two (2) flyers outlining the
requirements for timely payroll submissions to the department. One flyer
will be sent to all Prime Contractors with their executed contracts, reminding
them of their contractual requirements to timely submit payrolls each week
(no later than seven (7) days from the end of each payroll period). It will also
remind Prime Contractors that they are responsible for the timely submission
of all payrolls from their subcontractors as well.
The second flyer will be sent to all Project Engineers with each project they
are assigned. It will remind them of their responsibility to require the Prime
Contractors to submit their weekly payrolls in a timely manner (no later than
seven (7) days from the end of each payroll period) and to keep their project
records up to date.
In addition, the CAD Contract Compliance Officer will include the following
statement in correspondence with the Project Engineers and/or their payroll
designees when contacting MDOT staff regarding payrolls.
As required in Section 110 of the Standard Specifications and the FHWA-
1273, Prime Contractors are required to submit their weekly payrolls to
you weekly (no later than seven (7) days) from the end of each payroll
period. The Prime Contractor is responsible for the timely submission of
all payrolls by its subcontractors. If the Prime Contractor is not in
compliance with these requirements, please notify them in writing that
314
Shad White, State Auditor
Single Audit Finding
they are out of compliance with the state specifications and federal
regulations. Failure to comply with the requirements may result in
suspension of work and/or withholding of payment until they are in
compliance with the requirements.
B. All Project Engineers and/or their Payroll Designees
Paul Campbell, Compliance Officer
C. August 1, 2021
D. Under current practices, in every instance, including the 40 that were denoted
in the findings, there were no instances where employees were paid a wage
less than the minimum required by Davis Bacon. Additionally, there were
no instances of abuse of federal funds since Contract Administration Division
does not pay a contractor if payrolls are delinquent per the definition in
Section 110 of the Mississippi Standard Specification for Road & Bridge
Construction.
MDOT Standard Specifications, 2017 Edition
110.02.1--Statements and Payrolls. The Contractor and Subcontractors
shall submit weekly copies of all payrolls to the Project Engineer and meet
the requirements of U. S. Department of Transportation Form FHWA 1273,
on projects constructed in whole or in part with Federal funds.
The Contractor shall make all efforts necessary to submit this information
to the Project Engineer weekly. The Engineer will have the authority to
suspend the work wholly or in part and to withhold payments if the
Contractor fails to submit the required information. Submission of forms
and payrolls shall be current through the first full week of the month for the
estimate period in order for the Project Engineer to process an estimate.
It should be noted that the Contract Administration Division does not have the
authority to suspend the work of the Contractor or to withhold payments. Only
the Project Engineer has this authority and they report to a District Engineer
which Contract Administration Division has no authority over as well.
315
Shad White, State Auditor
Single Audit Finding
CFDA
Number 20.205 — Highway Planning and Construction
Compliance
Requirement Special Test & Provisions — Quality Assurance Program
2021-021 Strengthened Controls to Ensure Compliance with Special Test
Requirements Related to the Quality Assurance Program
Response: | MDOT does not concur with this finding.
Corrective Action Plan:
A. a. Report 1* bullet point: “Twenty (20) instances, out of 100 sampling records
selected for testing, in which the selected sample was completed, reviewed, and
authorized by the sample employee. We noted three (3) samples were coded
incorrectly resulting in the [AS sample not appearing on the TMD-891 report.
The TMD-891 report denotes all IAS samples taken for a project and states
whether the sample was favorable or non-favorable when compared to the
appropriate Job Acceptance Sample. We also noted one (1) sample was
incorrectly labeled as an IAS sample.”
No corrective action is needed for the 20 out of 100 instances where the same
employee completed and authorized a sample. According to Sections 10.2
through 10.14 of the Internal Control — Integrated Framework, published by the
Committee of Sponsoring Organizations of Treadway Commission (COSO),
segregation of duties is a function of design control activities within an
organization, and management is to consider segregation of duties to a practical
extent. Additionally, if segregation of duties is not practical due to limited
personnel or other factors, then management is to develop alternative control
activities to reduce risk. There are some MDOT samples that have special
circumstances in which it is not practical for a separate individual to authorize
the sample in SiteManager. In these special circumstances, a single individual
is entering data that represents a visual observation or data entry from a
specialized test. Having a second individual authorize these samples brings no
value with respect to internal controls because the second individual did not
personally witness the observation or completion of the specialized test. As
such, MDOT has alternative control activities in place to ensure proper material
testing in these cases. The project engineer monitors material testing throughout
the project and completes the TMD-725 report at the end of the project. Other
project close-out procedures as described in Materials Division’s narrative are
also in place to ensure proper material testing. In response to this finding,
Materials Division staff will have a conversation with Mississippi FHWA
Division office regarding their opinion of “proper segregation of duties” with
respect to material sampling and testing.
316
Shad White, State Auditor
Single Audit Finding
Sincerely,
Brad
IAS staff have been reminded of the importance of adhering to the standardized
sample identification format for reports to accurately display all information.
District Materials Engineers have been reminded to instruct their employees to
pay close attention to the sample type selection when entering samples.
b. Report 2" bullet point: “Two (2) instances, out of fifty (50) IAS sample
records selected for testing, in which IAS personnel did not meet minimum
sampling guidelines.”
MDOT is currently following a revised SOP TMD-06-02-00-000 that allows
flexibility to increase or decrease IAS testing frequencies due to project specific
conditions. IAS staff have been reminded to update their sampling checklists
on a regular basis as Project Offices update installed quantities. MDOT is not
planning any more Metric projects; therefore, unit conversions will not be an
issue.
Alan Kegley, P.E. Assistant State Materials Engineer - Field Operations
Conversations with Mississippi FHWA Division office is expected to take place
before the end of 2022. The corrective action to remind IAS staff to adhere to
the standardized sample identification format and also to frequently update
sampling checklists has been completed. Corrective action to remind District
staff of the importance of properly selecting the sample type has been
completed.
Corrective action is not necessary for the 20 out of 100 instances where the
same employee completed and authorized a sample in SiteManager. There are
several specialized tests and observations where it is not practical for MDOT to
have a separate individual authorize the sample in SiteManager. Other
alternative control activities are in place to reduce risk.
Executive Director
BW: trb
cc: Lisa Hancock, CPA - Deputy Executive Director/Administration
Brian Ratliff, P.E. - Deputy Executive Director/Chief Engineer
317
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Department of Transportation
(MDOT) Management
Department of Transportation — Special Test & Provisions — Wage Rate - Material
Weakness/Material Noncompliance
2021-020 Strengthen Controls to Ensure Compliance with Wage Rate Requirements
MDOT states that their Contract Administration Department (CAD) does not have control over when the
contractors or subcontractors submit their weekly statements or when the warrants are issued to contractors.
However, the Code of Federal regulations (as quoted in the finding) requires that MDOT retain control over
those very things. Even though MDOT did not concur with the finding, they provided some type of
corrective action to help mitigate the issue and OSA will verify that these actions were taken by MDOT in
a future audit.
Department of Transportation — Special Test & Provisions — Quality Assurance Program -
Significant Deficiency/Immaterial Noncompliance
2021-021 Strengthen Controls to Ensure Compliance with Special Test Requirements Related
to the Quality Assurance Program
Based on the Corrective Action Plan, MDOT provided pending corrective action for part of the finding and
appeared to concur, even though they stated they did not concur with the finding. They did not provide
pending corrective action for the portion of the finding for the 20 instances in which the sample was
completed, reviewed, and authorized by the same employee.
MDOT states that the review and authorization of the sample items are not practicable to be segregated;
however, MDOT provided no compensating controls to help ensure that sampling records are accurate,
complete, authorized, or entered into the database correctly. It should be noted that MDOT personnel
incorrectly coded sampling information four times out of 20. Some type of additional control procedure to
ensure that the sampling information is correct could prevent further errors.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
319
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OFFICE OF THE GOVERNOR
Walter Sillers Building | 550 High Street, Suite 1000 | Jackson, Mississippi 39201
MISSISSIPPI DIVISION OF
MEDICAID
FINANCIAL AUDIT FINDINGS
April 14, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P. 0. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
We have reviewed the single audit findings below in reference to our fiscal year 2021 audit.
Listed below are our individual responses and plans for corrective action.
AUDIT FINDINGS:
2021-007 ntrol i cial R ing and th ]
Expenditures of Federal Awards.
Response:
The Division of Medicaid (DOM) concurs with this finding. DOM understands the
importance of maintaining accurate records for all grant awards and will strengthen
controls over financial reporting and the preparation and review of the grant schedule, to
include the preparation of DOM’s portion the SEFA.
Corrective Action Plan:
A. The agency plans to contract with an experienced GAAP contractor to train the
Office of Federal Reporting and the Comptroller on the GAAP reporting process. This
additional training, along with increased scrutiny within the department over
financial reporting and the SEFA, will alleviate the reporting issues found in this
audit. DOM is instituting a formal review and approval process to ensure the correct
recording of all information (including dates) for all grant awards. The agency will
ensure a reconciliation of the Schedule of Expenditures of Federal Awards to MAGIC
Toll-free 800-421-2408 | Phone 601-359-6050 | Fax 601-359-6294 | medicaid.ms.gov
Office of the State Auditor
April 14, 2022
is implemented by Federal Reporting and reviewed by the Comptroller. The agency
will use all available resources to identify accruals, including a schedule of federal
reporting adjustments and a schedule of Managed Care Organizations’ outstanding
balances.
B. Christine Woodberry
C. August 1, 2022
Sincerely,
Drew L. Snyder
Executive Director
322
DocuSign Envelope ID: 746DAF15-E073-442E-9900-E1E630639831
OFFICE OF THE GOVERNOR
Walter Sillers Building | 550 High Street, Suite 1000 | Jackson, Mississippi 39201
MISSISSIPPI DIVISION OF
SINGLE AUDIT FINDINGS MEDIC AID
October 17, 2022
Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dear Auditor White:
Thank you for providing the Single Audit Findings for the Mississippi Division of Medicaid for
our review and response. Our responses are below.
Sincerely,
Drew Snyder
Executive Director
Mississippi Division of Medicaid
Toll-free 800-421-2408 | Phone 601-359-6050 | Fax 601-359-6294 | medicaid.ms.gov
Responsibly providing access to quality health coverage for vulnerable Mississippians
323
DOM Single Audit Responses
AUDIT FINDINGS:
93.767 Children’s Health Insurance Program (CHIP)
Allowable Costs
2021-039 Strengthen Controls to Ensure Compliance with the Allowable Costs Requirements of
the Children’s Health Insurance Program
DOM Response:
DOM Concurs. Although DOM concurs with this finding, this is a repeat finding that
was immediately addressed at the conclusion of the Single Audit of fiscal year 2021. A manual
update to the CHIP table was made by DOM, submitted to Conduent, and became effective
7/1/2021. The most recent CHIP co-payment table was automatically updated and put into
production on March 11, 2022, when the Wholesale Change Packet was processed. When
samples are selected by the Auditor’s Office that post-date July 2021, the change will be evident,
and this will no longer be an issue.
DOM Corrective Action Plan:
Based on the above response, this issue has been corrected and no further action is needed.
93.778 Medical Assistance Program (Medicaid; Title XTX)
Allowable Costs
2021-040 Strengthen Controls to Ensure Compliance with the Allowable Costs Requirement of
the Medical Assistance Program
DOM Response:
DOM Concurs. The Office of the State Auditor compared county information from the
RH480 report from June 2021 to current county information in the MMIS system. When a new
address is entered into the MEDS system, a complete override occurs in the MMIS system
without record of the previous address. Because of this, comparing information from a past time
period (June 2021) to current information in a real time system (MMIS) may result in what _
appears to be a conflict in county and/or region codes, resulting in the perception of payment of
an improper capitation rate.
DOM determined that the three cases identified by OSA were not coded according to the county
of residence in June 2021, which is the time period of the report utilized by OSA. However, one
of the three did not result in improper capitation payments, as the geographic region, which
determines the capitation payment, was accurate.
324
DOM Single Audit Responses
DOM Corrective Action Plan:
a. Training was held with all Regional Office Eligibility Staff in July 2022, on the importance
of having the correct county code in the computer system when updating an address or
processing an action on a case.
b. Nathan Wilson
c. Corrected as of August 1, 2022
93.767 Children’s Health Insurance Program (CHIP)
93.778 Medical Assistance Program (Medicaid; Title XIX)
Eligibility
2021-041 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the
Medical Assistance Program and the Children’s Health Insurance Program (CHIP)
DOM Response:
DOM Does Not Concur. It appears that OSA has attempted to evaluate DOM eligibility
determinations using standards that are not approved by CMS and a data source unavailable to
DOM under current state law. DOM maintains that for determining eligibility, it has complied
with the CMS-approved state plan. Using the approved CMS MAGI Based Verification plan in
effect during the audit time period, the state sought to verify the reported income to the standard
of reasonable compatibility, as defined by CMS, through all available electronic data sources.
While DOM is only required to use tax return information in certain circumstances, the agency
continues to pursue the authority to review state and/or federal tax return information. To date,
DOM is still working on the SSR (System Security Report) for the IRS. Approval of the SSR is
needed in order to complete testing of the code for using the IRS data in the reasonable
compatibility calculations. The code is completed, and harness testing was done, but due to
Authority to Connect (ATC) work and the MESA upgrade, the SSR completion has been
delayed. Until such time that DOM is permitted to access tax return information, DOM plans to
continue to follow the approved federal/state plan for eligibility determination.
DOM Does Not Concur. OSA identified 19 instances of applicants reporting self-
employment income, out-of-state income, or unearned incomed on tax returns. The applications
received by DOM for these applicants did not reflect income from any of these sources. Further,
as stated above, DOM does not have access to state tax return information to refute the
information on the applications in questions. DOM utilized all available, CMS-approved state
plan data sources to evaluate and determine eligibility for the applicants identified.
In addition, the nine instances of income exceeding applicable income limits are based on tax
returns that may or may not reflect the current situation of an applicant. According to 42 CFR
325
DOM Single Audit Responses
435.603(h) and the CMS-approved state plan, DOM is required to base eligibility on current
income and family size for new applicants and current beneficiaries. While tax returns can be
used as one form of verification, as required by federal regulations and the approved state plan,
income attestations reflective of the client’s present situation must be considered. Further, tax
returm information does not solely determine eligibility for applicants or current beneficiaries.
This information, along with all other available data sources, is used as a part of the standard of
reasonable compatibility.
Further, because of the public health emergency, which began in March 2020, no beneficiaries
could be removed from Medicaid coverage. As a result, and based on DOM’s determination of
eligibility, the nineteen instances that were used to calculate the questioned costs would, in fact,
have retained coverage, thus, legitimizing any costs associated with those beneficiaries during
the time period audited.
DOM Does Not Concur. There were only five beneficiaries whose income was not
verified through Mississippi Department of Employment Security. the remaining beneficiaries’
income was either verified or verified automatically to attempt an administrative renewal though
renewals were suspended at this time due to the public health emergency. Upon notification of
this issue, DOM did verify the income of the five beneficiaries mentioned above, and it was
determined that all five were, in fact, eligible during the time period audited, eliminating any
associated questioned costs.
DOM Concurs. DOM did not perform resource verification through AVS for the
beneficiaries in question. However, after being notified of this oversight, DOM ran AVS for all
seven applicants, which resulted in no change in the eligibility determination.
DOM Concurs. Although, DOM agrees with this finding, this is a repeat issue that was
corrected after the Single Audit of FY2021. Once OSA reviews PARIS files submitted after
August 2021, this will no longer be an issue.
DOM Corrective Action Plan:
a. A training PowerPoint was submitted to all RO Eligibility employees addressing MDES in
July 2022.
b. Nathan Wilson
c. Corrected as of August 1, 2022
93.767 Children’s Health Insurance Program (CHIP)
Special Tests and Provisions — Provider Eligibility
2021-042 Strengthen Controls to Ensure Compliance with Provider Eligibility Requirements of
the Children’s Health Insurance Program (CHIP)
326
DOM Single Audit Responses
DOM Response:
DOM Concurs. The Mississippi Division of Medicaid (MDOM) delegated the
screening and credentialing of CHIP providers to managed care organizations. Additionally,
DOM officially discontinued the requirement of MCOs to obtain disclosures to eliminate
redundancy in the MississippiCAN Contract Amendment #9. However, if the provider is enrolled
in CHIP-only, then the MCO is required to obtain the disclosure.
DOM Concurs. The CHIP MCO identified confirmed that they have not conducted
required site visits for moderate risk or high-risk providers since becoming a CHIP MCO in
2019. Additionally, the MCO did advise that they had contacted providers to conduct site visits
but had been unable to secure a contract prior to implementation of the DOM centralized
credentialing process.
DOM Does Not Concur. DOM requires the MCO to conduct screenings of all
providers; however, the MCO may delegate provider credentialing activities, which includes
provider screening. Services/items/prescriptions that are ordered/referred/written by
hospitalists/contracted physicians are eligible for payment if the hospitalist/physician is
enrolled in Medicaid or the claim qualifies for an exception under Medicaid Provider
Enrollment Compendium (MPEC) Section 1.5.1.B.2. titled When the SMA is Not Required
to Enroll ORPs. If the hospitalist/contracted physician is not enrolled in Medicaid, then
credentialing is not required.
DOM Corrective Action Plan:
a. In response to concerns for proper credentialing and provider concerns, DOM began the
design and implementation of a centralized credentialing process, which is administered
by DOM for managed care providers in the MississippiCAN and CHIP programs. This
process includes provider enrollment, screening, credentialing, and site visits by DOM
and its fiscal agent. In addition, DOM will delegate credentialing services to a minimum
number of large healthcare systems. The providers will continue to contract with MCOs
for enrollment in their respective networks.
b. Sharon Jones
c. Corrected as of July 1, 2022
327
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STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Division of Medicaid (MDOM)
Management
Division of Medicaid — Eligibility - Material Weakness/Material Noncompliance
2021-041 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the
Medical Assistance Program and the Children’s Health Insurance Program (CHIP)
This finding is a repeat finding for MDOM since the Fiscal Year 2019 Single Audit. MDOM’s State Plan
requires the verification of all income for MAGI-based eligibility determinations, and, as stated in the
finding, MDOM’s Eligibility Policy and Procedure Manual requires the use of an individual’s most recent
tax return to verify self-employment income. In multiple instances, applicants either misreported self-
employment income or failed to report self-employment income. MDOM’s failure to adequately capture
and verify self-employment income led to 9 instances were individuals who may not have been eligible to
receive benefits were awarded benefits. In a similar case reported in last year’s audit, two individuals
fraudulently applied for and received Medicaid benefits, namely by concealing self-employment income
on their tax returns. These instances resulted in over $70,000 in unentitled benefits being paid. In order to
attempt to reduce ineligible individuals from receiving benefits, MDOM should strengthen their controls
and perform due diligence to ensure that self-employment income is properly verified. MDOM repeatedly
states that they do not have access to state tax return information; however, their own policy states that they
will use tax return data to verify self-employment income.
As explained to MDOM by auditors, the questioned costs remained even though MDOM was unable to
remove individuals from the program due to COVID-19. The auditor asserts that, if MDOM had performed
proper due diligence when initially evaluating these individuals, they may have never been accepted into
the program; therefore, the questioned costs remain. The auditor concurs that OSA is not able to know the
recipients were actually ineligible; conversely, MDOM is not able to know the recipients are actually
eligible due to their own failed compliance with policies. Eligibility for these individuals is, at best,
questionable, which is why the payments made are questioned costs.
Additionally, MDOM stated that they do not concur with the section of the finding regarding MDES
verifications. To date MDOM has offered no documentation to support their assertion that these individuals
were verified through the MDES system.
Division of Medicaid — Special Tests & Provisions — Provider Eligibility - Material
Weakness/Material Noncompliance
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
329
2021-042 Strengthen Controls to Ensure Compliance with Provider Eligibility Requirements
of the Children’s Health Insurance Program (CHIP)
In the corrective action plan, MDOM states “MDOM requires the MCO to conduct screenings of all
providers; however, the MCO may delegate provider credentialing activities, which includes provider
screening.” As noted in the finding, Molina delegates credentialing and allows providers to “credential
themselves”. The Medicaid Provider Enrollment Compendium (MPEC) states that allowing managed care
organizations to delegate provider credentialing activities to allow providers to “credential themselves” is
not in compliance with 42 CFR 455. This arrangement creates a conflict of interest and does not allow the
MDOM to maintain appropriate oversite.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX(601)576-2650
330
State of Mississippi
TATE REEVES
Governor
MISSISSIPPI] EMERGENCY MANAGEMENT AGENCY
STEPHEN C. McCRANEY
EXECUTIVE DIRECTOR
November 1, 2022
Honorable Shad White, State Auditor
Office of the State Auditor
State of Mississippi
P.O. Office Box 956
Jackson, MS 39205-0956
Attention: Ms. Stephanie C. Palmertree
Deputy State Auditor
RE: Response to FY 2021 Single Audit Management Report
Dear Mr. White:
On October 26, 2022, the Mississippi Emergency Management Agency (““MEMA”)
received the Single Audit Management Report (the ““Report”), prepared by the Office of the State
Auditor, regarding MEMA’s management and use of federal funds during the Fiscal Year 2021.
The cover letter provided with the Report directs MEMA to review the recommendations
contained therein and submit a plan to implement them by November 2, 2022, or within five
business days of MEMA’s receipt of the Report. Consistent with this direction, MEMA provides
this response, including a corrective action plan for each finding. MEMA respectfully requests
that the State Auditor consider the below comments and enclosed additional documentation in
connection with any ongoing and future engagements. MEMA appreciates the continuing
support of the State Auditor’s Office as we all work together for the betterment of our State.
MEMA is available to answer any questions on this response.
ALLOWABLE COSTS
Audit Finding No. 2021-046
The Mississippi Emergency Management Agency Should Strengthen Control to Ensure
Compliance with Allowable Costs and Activities Allowed Requirements [sic] for Coronavirus
Relief Funds.
POST OFFICE BOX 5644 « PEARL, MISSISSIPPI 39288-5644 » PHONE: 601-933-MEMA
EMERGENCY 1-800-222-6362 (24 HOUR)
TDD 1-800-445-6362
331
MEMA Response to Single Audit Findings
November 1, 2022
Response:
MEMA disagrees with this Finding’s underlying conclusion regarding the purchase of the
State Emergency Logistical Operations Center (““SELOC”). The SELOC was necessary to
respond to the COVID-19 pandemic, including specifically the National and State declarations of
a Public Health Emergency; the costs incurred are allowable, unbudgeted expenditures of
Coronavirus Relief Funds (“CRF”). Notably, the Mississippi Legislature passed House Bill
1808, which authorized MEMA to purchase a building with CARES Act funds for this purpose.
In response to the COVID-19 pandemic, MSDH was appointed the lead agency to
address emergency circumstances as a result of the virus. MSDH entered into an agreement with
MEMA that established MEMA as the primary State agency responsible for the purchase and
delivery of critical personal protective equipment (“PPE”) throughout the State to support our
collective response to this unprecedented pandemic event. MEMA, however, did not have the
storage capacity to properly store the amount of PPE estimated at that time to meet statewide
demands, including the requirement that it maintain a 60-day reserve surplus of PPE consistent
with the Governor’s mandate.
As explained in more detail in the attached analysis, MEMA determined that the most
cost effective option to store the necessary PPE was to purchase a facility with both the capacity
and operational capability to allow MEMA to properly maintain the State’s PPE stockpile in one
facility in accordance with the guidelines that were being issued at that time by the U.S.
Department of Health and Human Services. In September 2020, MEMA purchased the site that
is now known as the SELOC.
MEMA has been working with the Office of the State Auditor on questions and tasks
related to this audit since August 2020. MEMA initially signed a contract with the Office of
State Auditor and Carr, Riggs & Ingram (“CRI’’) for the purpose of auditing MEMA’s
administration and distribution of CARES Act funds. MEMA provided all requested
information to the CRI team, and, in early 2021, MEMA met with CRI representatives at the
SELOC so the CRI team could personally view the operations and we could work through any
remaining questions as needed to finalize the audit. Subsequently, MEMA provided CRI with all
requested documentation associated with the purchase of the SELOC, including the space and
cost analysis performed to justify in connection with the purchase.
MEMaA understood the auditors had all information necessary to validate the SELOC
purchase; however, in July 2022, MEMA received an email from Clifton Larson Allen LLP
(“CLA”), an auditing firm out of California, advising that CLA was now auditing MEMA’s
CARES Act expenditures. It was not until September 26, 2022, that CLA advised MEMA that
there were concerns with the use of CRF funding to cover the cost of the SELOC facility.
Purchase of the SELOC was necessary and the costs were reasonable based on
circumstances present at the time the purchase was made in accordance with the applicable
Federal regulatory standard found at 2 CFR § 200.404. MEMA prepared analyses to confirm
that: (i) it did not have suitable existing property to store PPE necessary to respond to COVID-
332
MEMA Response to Single Audit Findings
November 1, 2022
19; (ii) improving existing property was not a cost effective option; and (iii) purchasing the
facility represented the least cost option to meet the State’s PPE storage needs.
MEMA has effective controls in place to ensure compliance with applicable requirements
for federal programs, including the CRF. MEMA implemented these controls when it purchased
the SELOC facility to respond to the COVID-19 emergency. MEMA continues to use the
SELOC for this purpose. MEMA’s purchase of the SELOC facility was a necessary expenditure
to safely and efficiently store necessary PPE to respond to COVID-19 and the costs were not
accounted for in MEMA’s previous budget. Therefore, this purchase met CRF requirements.
MEM<A is confident that the information and documentation provided with this Response
confirms that, not only was the purchase of the SELOC facility allowable consistent with the
CARES Act CRF requirements, but also that MEMA exercised appropriate due diligence prior to
making the purchase.
Corrective Action Plan:
MEMA appreciates the recommendation made by the State Auditor regarding
strengthening controls to ensure compliance with allowable costs and activities for the CRF.
MEMA continues to review its existing contracts and procurement procedures staying abreast of
all state and federal guidance and changes.
SUBRECIPIENT MONITORING
Audit Finding No. 2021-047
The Mississippi Emergency Management Agency Should Strengthen Controls to Ensure Terms
and Conditions are stated in Subrecipient Subaward Documents
Response:
MEMA understands that Audit Finding No. 2021-047 relates to MEMA’s administration
of the Mississippi County and Municipality Emergency Relief Program (““MERP”). MERP was
a unique funding program specifically enacted to provide support to our counties and
municipalities for costs incurred to respond to an unprecedented national Pandemic and lessons
can certainly be leaned to improve in future events. Funding was needed immediately, and the
public health and safety warranted expedited implementation and administration of these grants.
MERP was funded by an allocation of federal funds provided by the U.S. Department of
Treasury to the State of Mississippi under the CARES Act CRF. The purpose of MERP was to
provide critical and immediate support to our counties and municipalities actively engaged in
unprecedented efforts to respond to the COVID-19 Pandemic.
MEMA was directed to administer MERP by the State Legislature under Senate Bill
3047 and was required to begin making disbursements to participating cities and counties no
333
MEMA Response to Single Audit Findings
November 1, 2022
later than August 15, 2020. The legislative directive included a list of eligible uses, based on
guidance issues by the U.S. Department of Treasury. The amount of funding allocated to
participating counties and municipalities was also set by the State Legislature and based on a
proportional allocation of funding according to the county or municipality’s population as listed
in the 2010 U.S. Census. MEMA was a subrecipient of these funds and provided the allocations
to participating municipalities and counties as beneficiaries/subrecipients as directed.
In order to implement MERP and administer the resulting payments to participating
counties and municipalities, MEMA engaged a contractor to establish and operate a secure
online portal to obtain necessary information from participating counties and municipalities and
provide the necessary information to these entities so that each one was aware of certain terms
and conditions applicable to these funds.
Participating counties and municipalities were provided credentials to access the MERP
portal. When entered, the portal provided information as to the grant award (also publicly posted
to MEMA website), the terms of the grant, and information regarding eligible uses. Each
participating county and municipality were required to execute and return a “COVID-19 —
Mississippi County and Municipality Emergency Relief Program Agreement.” Among other
requirements and terms, the Agreement requires the signing “Applicant” to comply with the
Single Audit Amendments of 1996 under the Code of Federal Regulations Part 200 and provide
copies of each audit report to the Governor’s Authorized Representative.
To provide an added layer of protection for the State of Mississippi’s funds, and further
increase accountability of the participating counties and municipalities, the Agreement also
confirms that each Applicant is responsible for any re-payment or deobligation of funding based
on findings from the U.S. Department of Treasury’s Office of Inspector General and/or the State
Auditor. The Agreement further provides that any repayments not returned to MEMA within a
reasonable time will be turned over to the State Auditor for action, so MEMA and the State of
Mississippi should be fully protected.
Participating counties and municipalities were provided additional information regarding
the eligible uses of these funds during a kick-off meeting including reference to U.S. Department
of the Treasury materials, guidance documents, and FAQs that included many of the items noted
in the list provided in the Report.
The simplified subgrant agreement, coupled with the instruction and oversight provided
by MEMA and its contractors, protected the State’s interests. MEMA’s procedures materially
complied with the requirements imposed by applicable federal regulations and the awarding
agency; however, MEMA will work to further strengthen the controls in place going forward.
Corrective Action Plan:
MEMA appreciates the recommendation made by the State Auditor regarding additional
terms and conditions to be expressly included in future grant agreements that may be entered into
to implement similar programs. MEMA will review its existing subgrant templates for future
programs that may arise.
334
MEMA Response to Single Audit Findings
November 1, 2022
Audit Finding No. 2021-048
The Mississippi Emergency Management Agency Should Strengthen Controls to Ensure
Compliance with Subrecipient Monitoring Requirements.
Response:
MEMA has a Subrecipient Monitoring Policy to ensure compliance with the Single Audit
Act and to build a stronger reporting and monitoring system for Single Audits. The Subrecipient
Monitoring Policy requires MEMA, in relevant part, to:
e Perform annual review of single audits from all subgrantees that expend $750,000 or
more in federal funds in accordance with the Office of Management and Budget
(“OMB”) Uniform Guidance;
e Send a letter to all subrecipients explaining the requirement to perform a Single Audit
Report if a non-Federal entity expends federal funds of $750,000 or more in a given fiscal
year;
e Inform subrecipients of the timeline by which it must submit Single Audit Reports to the
Federal Audit Clearinghouse;
e Send subrecipients the “For Federal Grant Recipients” Memorandum to assist
subrecipients with determining whether it meets the federal expenditure threshold of
$750,000;
e Annually track subrecipients use of Federal funding, capturing relevant information and
deadlines;
e Take corrective action for subrecipients that do not comply with Single Audit Act
requirements.
MEMA implemented an updated Subrecipient Monitoring Policy in August of 2022.
MEMA understands that the instant concern is that MEMA’s current Policy may not impose
Single Audit Act requirements on subrecipients when federal funding is provided under
programs that MEMA doesn’t manage trigger compliance. Of note, MEMA is not aware of any
means to reliably access information regarding what types and how much federal funding is
provided by programs outside of those that MEMA manages/administers.
Notwithstanding, MEMA will revise its Subrecipient Monitoring Policy to require
subrecipients to certify that the total amount of funding from all programs meets/does not meet
the threshold to trigger Single Audit Act compliance. MEMA will require compliance with
requirements if the certification is not submitted or MEMA has information otherwise to indicate
that the subrecipient has met or exceeded the threshold.
335
MEMA Response to Single Audit Findings
November 1, 2022
Corrective Action Plan:
MEMA is confident that the State Auditor’s Office will agree that implementation of its
updated Subrecipient Monitoring Policy will resolve the issues identified in Audit Finding 2021-
048. MEMA will continue to strengthen its subrecipient monitoring requirements to ensure that
all subrecipients are appropriately monitored and satisfy all applicable federal requirements,
including those found at 2 CFR Part 200 and the Single Audit Act.
Conclusion
MEMA welcomes the opportunity to further discuss any remaining questions that the
State auditor may have regarding MEMA’s use of Federal funds and will provide any necessary
additional information and documentation in order to close all findings and recommendations. If
you need any further information related to this response, or to discuss this matter further, my
point of contact is Mr. Clayton French, Jr., Deputy Director, who may be reached at (601) 933-
6782.
Sincerely,
Stephen C. McCraney
Executive Director
Attachment:
Analysis re Purchase of the State Emergency Logistical Operations Center (SELOC)
336
STATE OF MISSISSIPPI
OFFICE OF THE STATE AUDITOR
SHAD WHITE
STATE AUDITOR
Auditor’s note to the Corrective Action Plan from Mississippi Emergency Management
Agency (MEMA)
MEMA - Activities Allowed/Allowable Costs - Material Weakness/Material Noncompliance
2021-046 Strengthen Controls to Ensure Compliance with Allowable Costs and Activities Allowed
Requirements for Coronavirus Relief Funds.
MEMA’s provided analysis of the rent vs. purchase option was only provided after the initial finding was
presented to Management. When the analysis was examined, auditors determined that it relied on
inaccurate underlying data. The analysis provided that it would cost $2,059,200 to lease storage facilities
in one year. However, this number was calculated by taking the current price of one warehouse that housed
25% of the materials and extrapolating it to encompass a price for 100% of the materials. The storage cost
of this facility was $42,900. MEMA also presented emails illustrating that there was a warehouse available
to rent that supplied half of the needed space for $30,000 a month for rent, and another facility for a fourth
of the needed space for $5,000 a month. If extrapolations were made with this data, even if using the more
expensive building as the base data, the cost of leasing the building for two years would come to $1,440,000,
which is almost a million less than the initial cost of the building.
Moreover, the analysis provided by MEMA does not consider the additional costs that were associated with
the State Emergency Logistical Operations Center (SELOC) building to prepare the building for initial use.
These costs amounted to at least $518,042 in additional costs. Lastly, the analysis does not factor in that
the building MEMA used for extrapolation is not a storage facility, but a nationwide distribution center that
also charged for pallet rental, the cost of moving pallets in and out, etc. Additionally, the rental cost of the
Gulf Relay facility varied from month to month based on these expenditures and the amount of storage
utilized. The prices varied from approximately $27,000 monthly to $50,000 monthly.
It appears to the auditor that MEMA used data in their analysis that would lead to the conclusion to purchase
the building, rather than to let the analysis dictate the most cost effective option. While MEMA may argue
that the building purchase was a better long term business decision for the agency, the purpose of the
Coronavirus Relief Funds (CRF) was to provide immediate relief for the pandemic and not provide long
term business solutions.
MEMA’s supporting documentation mainly relied on Mississippi State Law to validate the purchase of the
building, stating that the Legislature allowed them to purchase the building via legislation that was passed
during the fiscal year 2020 legislative session; however, state law cannot supplant federal law in regards to
a federal grant.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX (601) 576-2650
337
It should be reiterated that MEMA publicly stated that this facility was for future pandemics, and a
permanent office space for the procurement staff of MEMA, thereby verifying its intended use and purpose
extended past the period of performance.
MEMA - Subrecipient Monitoring - Material Weakness/Material Noncompliance
2021-047 Strengthen Controls to Ensure Terms and Conditions are stated in Subrecipient Subaward
Documents.
MEMA’s argument in their response relies on the fact that the MS Legislature appropriated CRF funds for
state program called “MERP”. The program was designed to provide CRF monies to the counties and
municipalities in Mississippi. Regardless of the appropriation of the Legislature, MEMA is still required
to follow subrecipient monitoring regulations as outlined in Uniform Grant Guidance, as required by the
Department of the Treasury.
POST OFFICE BOX 956 * JACKSON, MISSISSIPPI 39205 * (601) 576-2800 * FAX(601)576-2650
338
PUBLIC UTILITIES STAFF
JEFFREY L. LEE, Deputy DIRECTOR
ADMINISTRATIVE SERVICES DIVISION
EMILY W. KRUGER
GENERAL COUNSEL
SAMSON MABRY IV, viRECTOoR
ELECTRIC & GAS DIVISION
RON BREWER, DIRECTOR
WATER & SEWER DIVISION
TIMOTHY H. JONES, Director
COMMUNICATIONS DIVISION
CHRISTOPHER GARBACZ, pirEcTor
ECONOMICS & PLANNING DIVISION
CHARLES JIM BECKETT
EXECUTIVE DIRECTOR
SINGLE AUDIT FINDINGS
Shad White, State Auditor November 7, 2022
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dr. Mr. White:
Staff has reviewed your findings of the audit of Staffs handling of Senate Bill No. 3046
“Mississippi Electric Cooperatives Broadband COVID-19 Act.” Below is the Corrective Action
Plan to be implemented by Staff in the event the Mississippi Legislature directs us to handle any
future grant programs using federal dollars.
Audit Findings:
OSA identified a deficiency in internal controls, described as not following The Code of
Federal Regulations 2 CFR 200.332(a) which governs how an entity must ensure identification
of subawards to subrecipients.
2021-049 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring
Requirements
e “During testwork performed for subrecipient monitoring for year ended June 30, 2021, the auditor
noted that 100% of the 6 sampled subawards issued to subrecipients of CRF grants did not include
all of the required data elements such as the Assistance Listing Number (ALN), the name of the
federal awarding agency, and the grant’s period of performance.
e “The Mississippi Public Utilities Staff used subrecipient agreements that lacked all the required
data elements.
e OSA Recommendation: “We recommend the Mississippi Public Utilities Staff strengthen
controls to ensure terms and conditions are stated in subrecipient subaward documents as required
by Uniform Grant Guidance.”
Staff Response:
A lump sum of $75 million was taken from Mississippi’s share of the Federal
Government’s CARES Act by the Mississippi Legislature and allocated to the Mississippi Public
Utilities Staff in the form of SB 3046. Staff had to implement a grant program that would provide
WOOLFOLK STATE OFFICE BLDG, / 501 NORTH WEST STREET / SUITE 301-B JACKSON, MISSISSIPPI 39201
P.O. BOX 1174 JACKSON, MISSISSIPPI 39215-1174
PH (601) 961-5800 FAX (601) 961-5804
339
awardees with money by July 31, 2020. SB 3046 laid out the methodology by which the Staff
was to conduct the grant program and monitor the awardees. All awarded money had to be spent
in projects building out broadband by December 31, 2020. Staff used fees paid by applicants to
hire an accounting firm and an engineering firm to monitor the spending of the money and
building of broadband infrastructure. 2 CFR 200.332(a) lists subrecipient monitoring
requirements. Staff did not have access to any of this information. Staff only had the information
dictated to it through SB 3046 which was signed into law by the Governor. Mississippi received
over one billion dollars in CARES Act funds from the federal government. The Governor and
the Mississippi Legislature dictated the allocation of those dollars. 2 CFR 200.332(a) targets a
more specific grant from the federal government not emergency funding through an action like
the CARES Act.
Although Staff did not have information available to it to follow the exact requirements of 2 CF'R
200.332(a), Staff commits to pursuing those specific guidelines in any future actions related to
federal grants.
Corrective Action Plan:
Staff agrees to follow the criteria set out in 2 CFR 200.332(a) regarding subrecipient monitoring
in all future action that require it. The criteria are listed below:
e Subrecipient Name (which must match the name associated with its unique entity identifier;
e Subrecipient’s unique entity identifier;
® Federal Award Identification Number (FAIN);
e Federal Award Date of award to the recipient by the Federal agency;
e Subaward Period of Performance Start and End Date;
e Subaward Budget Period Start and End Date;
e Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient;
e Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including
the current financial obligation;
e Total Amount of the Federal Award committed to the subrecipient by the pass-through entity;
e Federal award project description, as required to be responsive to the Federal Funding
Accountability and Transparency Act (FFACTA);
e Name of Federal awarding agency, pass-through entity, and contact information for awarding
official of the Pass-through entity;
e Assistance Listing number and Title; the pass-through entity must identify the dollar amount
made available under each Federal award and the Assistance Listings Number at time of
disbursement;
e Identification of whether the award is R&D; and
e Indirect cost rate fe <bederal award.
340
Mississippi VA
SINGLE AUDIT FINDINGS
Shad White, State Auditor November 10, 2022
Office of the State Auditor
State of Mississippi
P.O. Box 956
Jackson, MS 39205-0956
Dear Mr. White:
The Mississippi Veterans Affairs appreciates and thanks your staff for all the assistance and
courtesy provided during the audit of this agency. Your recommendations will be incorporated to
enhance our internal controls and policies.
Audit Findings
1. Strengthen Controls Over the Preparation, Recording, and Review of the Schedule of
Expenditures of Federal Awards.
2. Strengthen Controls Over the Preparation, Recording, and Review of the Schedule of
Expenditures of Federal Awards.
ALN and Program Name
64.015 Veterans State Nursing Home Care
Type of Compliance Requirement
Material Weakness and Material Noncompliance
Audit Finding Heading
2021-051 Strengthen Controls Over the Preparation, Recording, and Review of the
Schedule of Expenditures of Federal Awards.
Response: We concur with this finding.
Corrective Action Plan:
A. The Chief Financial Officer will submit all financial data for the GAAP reporting
packets and ensure necessary adjustments and corrections are accurately reported
341
according to the MAAPP manual Section 27.30.60.
B. The Mississippi Veterans Affairs Internal Auditor will monitor the Finance
Department internal processes and procedures to implement corrective actions tor
compliance requirements.
ALN and Program Name
21.019 Coronavirus Virus Relief Funds
Type of Compliance Requirement
Material Weakness and Material Noncompliance
Audit Finding Heading
2021-052 Strengthen Controls Over the Preparation, Recording, and Review of the
Schedule of Expenditures of Federal Awards.
Response: We concur with this finding.
Corrective Action Plan:
A. The Mississippi Veterans Affairs Grant Manager will monitor and track grant related
expenses for reconciliation purposes.
B. The Chief Financial Officer will ensure the preparation of reviewing and recording
federal award expenditures are maintained and tracked accordingly.
C. The Mississippi Veterans Affairs Internal Auditor will monitor the Finance
Department internal processes and procedures to implement corrective actions for
compliance requirements.
Signed:
Mark Smith, Executive Director
Mississippi Veterans Affairs
342
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STATE OF MISSISSIPPI
INDEX OF FINANCIAL STATEMENT FINDINGS AND RESPONSES
FOR THE YEAR ENDED JUNE 30, 2021
FINANCIAL STATEMENT FINDINGS AND RECOMMENDATIONS (by finding number)
FINDING PAGE
NUMBER NUMBER STATE GRANTEE AGENCY NAME
2021-001 69 Department of Human Services
2021-002 67 Department of Finance and Administration
2021-003 67 Department of Finance and Administration
2021-004 71 Department of Marine Resources
2021-005 53 Department of Corrections
2021-006 55 Department of Education
2021-007 75 Division of Medicaid
2021-008 57 Department of Employment Security
2021-009 73 Department of Public Safety
2021-016 59 Department of Employment Security
2021-017 61 Department of Employment Security
2021-018 63 Department of Employment Security
MANAGEMENT RESPONSES AND CORRECTIVE ACTION PLANS (by State Agency)
Department of Corrections: Page 245
Department of Education: Page 247
Department of Employment Security: Page 263
Auditors Response to Employment Security Corrective Action Plan: 271
Department of Finance and Administration: Page 291
Department of Human Services: Page 301
Department of Marine Resources: Page 309
Department of Public Safety: Page 311
Division of Medicaid: Page 321
343
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STATE OF MISSISSIPPI
INDEX OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
LISTED BY FEDERAL DEPARTMENT
FOR THE YEAR ENDED JUNE 30, 2021
U.S. Department of Agriculture: Page 79
U.S. Department of Commerce: None
U.S. Department of Defense: None
U.S. Department of Housing and Urban Development: None
U.S. Department of the Interior: None
6. U.S. Department of Justice: None
7. U.S. Department of Labor: Page 141
8. U.S. Department of Transportation: Page 163
9. U.S. Department of Treasury: Page 171
10. Appalachian Regional Commission: None
11. National Foundation on the Arts and Humanities: None
12. Small Business Administration: None
13. U.S. Department of Veterans Affairs: Page 207
14. Environmental Protection Agency: None
15. U.S. Department of Energy: None
16. U.S. Department of Education: Page 95
17. Gulf Coast Ecosystem Restoration Council: None
18. Election Assistance Commission: None
19. U.S. Department of Health and Human Services: Page 109
20. Corporation for National and Community Service: None
21. Executive Office of the President: None
22. Social Security Administration: None
23. U.S. Department of Homeland Security: Page 137
Note: Federal Departments are listed in order of their respective numerical Assistance Listing Number.
345
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1
2
3
4
5.
6
7
8
STATE OF MISSISSIPPI
INDEX OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
LISTED BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
. Agriculture and Commerce: Pages 171-173
. Animal Health: None
. Archives and History: None
. Arts Commission: None
Attorney General: None
. Board for Community and Junior Colleges: None
Corrections: None
. East MS State Hospital: None
9. Education: Pages 79-82, 95-106, 173-176
10.
11.
12.
13,
14.
15.
16.
17.
18.
19.
20.
. Medicaid: Pages 123-134
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
21
Emergency Management: Pages 183-189
Employment Security: Pages 137-158, 176-183
Environmental Quality: None
Finance and Administration: Pages 171-198
Forestry Commission: None
Governor’s Office: None
Health: Pages 109-110
Human Services: Pages 85-93, 111-121
Insurance: None
Library Commission: None
Marine Resources: None
Mental Health: None
Military Department: None
MS Development Authority: None
MS State Hospital: None
Oil and Gas Board: None
Board of Pharmacy: None
Public Safety: None
Public Service Commission: None
Public Utilities Staff: Pages 189-191
Rehabilitation Services: None
Secretary of State: None
Soil and Water Conservation Commission: None
Supreme Court: None
Transportation: Pages 163-167
Treasury: None
Veterans Affairs: Pages 191-193, 207-209
Wildlife, Fisheries and Parks: None
Note: If findings and recommendations related to and agency appear on more than one page ina
sequence, only the first page is indicated in the above reference.
347
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STATE OF MISSISSIPPI
INDEX OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
LISTED BY FINDING NUMBER
FOR THE YEAR ENDED JUNE 30, 2021
FINDING PAGE
NUMBER NUMBER STATE GRANTEE AGENCY NAME
2021-010 11] Department of Human Services
2021-011 85 Department of Human Services
2021-012 112 Department of Human Services
2021-013 86, 114 Department of Human Services
2021-014 89, 118 Department of Human Services
2021-015 141 Department of Employment Security
2021-019 163 Department of Transportation
2021-020 165 Department of Transportation
2021-021 166 Department of Transportation
2021-022 147 Department of Employment Security
2021-023 149 Department of Employment Security
2021-024 154 Department of Employment Security
2021-025 155 Department of Employment Security
2021-026 152 Department of Employment Security
2021-027 157 Department of Employment Security
2021-028 137 Department of Employment Security
2021-029 139, 150 Department of Employment Security
2021-030 193 Department of Finance and Administration
2021-031 194 Department of Finance and Administration
2021-032 196 Department of Finance and Administration
2021-033 109 Department of Health
2021-034 79 Department of Education
2021-035 98 Department of Education
2021-036 100 Department of Education
2021-037 102 Department of Education
2021-038 104 Department of Education
2021-039 123 Division of Medicaid
2021-040 124 Division of Medicaid
2021-041 126 Division of Medicaid
2021-042 131 Division of Medicaid
2021-043 176 DFA/Department of Employment Securities
2021-044 95,173 DFA/Department of Education
2021-045 180 DFA/Department of Employment Securities
2021-046 183 DFA/Emergency Management Agency
2021-047 185 DFA/Emergency Management Agency
2021-048 187 DFA/Emergency Management Agency
2021-049 189 DFA/Public Utilities Staff
2021-050 171 Department of Agriculture and Commerce
349
STATE OF MISSISSIPPI
INDEX OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
LISTED BY FINDING NUMBER
FOR THE YEAR ENDED JUNE 30, 2021
FINDING PAGE
NUMBER NUMBER STATE GRANTEE AGENCY NAME
2021-051 207 Veterans Affairs Board
2021-052 191 Veterans Affairs Board
350
STATE OF MISSISSIPPI
INDEX OF MANAGEMENT RESPONSES TO FEDERAL AWARD FINDINGS
AND CORRECTIVE ACTION PLANS
LISTED BY STATE GRANTEE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
. Agriculture and Commerce: Page 241
Animal Health: None
Archives and History: None
Arts Commission: None
Attorney General: None
Board for Community and Junior Colleges: None
Corrections: None
. East MS State Hospital: None
9. Education: Page 249
. Emergency Management: Page 331
. Employment Security: Page 273
. Environmental Quality: None
. Finance and Administration: Page 295
. Forestry Commission: None
. Governor’s Office: None
. Health: Page 299
. Human Services: Page 303
. Insurance: None
. Library Commission: None
. Marine Resources: None
. Medicaid: Page 323
. Mental Health: None
. Military Department: None
. Mississippi Development Authority: None
. MS State Hospital: None
. Oil and Gas Board: None
. Board of Pharmacy: None
. Public Safety: None
. Public Service Commission: None
. Public Utilities Staff: Page 339
. Rehabilitation Services: None
. Secretary of State: None
. Soil and Water Conservation Commission: None
. Supreme Court: None
. Transportation: Page 313
. Treasury: None
. Veterans Affairs: Page 341
. Wildlife, Fisheries and Parks: None
351
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ACKNOWLEDGMENTS
REPORT PREPARED BY:
Shad White, State Auditor
Stephanie C. Palmertree, CPA, CGMA, Deputy State Auditor
Jason K. Ashley, Deputy Director, Financial and Compliance Audit Division
Angela Mire, CPA, Director, Agency Audit Section
Many thanks to the following managers, supervisors and field staff of the Office of the State Auditor for their
efforts in gathering information contained in this Single Audit Report:
Managers
Jeremy Ashley, CFE
Ashley Jolly, CPA
Alan Jarrett
John T. Newell, CPA
Supervisors
Virginia Anderson Emily Mathis
Richard Aultman, CPA Lisa Meade, CPA
Allen Case, CPA Jeremy Miller, CPA
Brianna Dang Clayton Southerland, CPA
Kari Horn Vincent Steiner
Field Staff
Chad Allgood John Simpson
LaSabre Charleston, CPA Brittany Stanford
Levi Hill Elevia Tate
Joshua Kastner Na Venator, CPA
Shavonda Lott Michael Walker, CPA, CFE
Dana McMorris
Interdivisional Audit Staff
Michael Torres, CPA - Director
LaDonna Johnson, CISA
Quality Assurance Staff
Leigh Taylor, CPA — Director
Kylie Joiner, CPA
We would also like to thank staff members of the Office of Financial Reporting, Department of Finance and
Administration for their assistance through compilation of the Schedule of Expenditures of Federal Awards.
Special thanks to Melody Crews, Caralee Ferrell, and Jacqueline Thomas - the Administrative Staff of the Financial
and Compliance Division - who tirelessly support us during our audits. Lastly, thank you to Jimmie Moore, who
keeps our computers and copiers running year round.
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Office of the State Auditor
Post Office Box 956
Jackson, Mississippi 39205-0956
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- Our copy
- REPORT_MS-Office-of-State-Auditor_State-Single-Audit-FY2021-UI-overpayments-adverse-opinion_2022.pdf
- Original
- www.osa.ms.gov