Full text
Full text shows the first 300 of 332 pages; the complete document is the PDF above.
STATE OF N HAMPSHIRE
i)
SINGLE AUDIT OF FEDERAL FINANCIAL
ASSISTANCE PROGRAMS
FOR THE YEAR ENDED JUNE 30, 2021
PREPARED BY:
DEPARTMENT OF ADMINISTRATIVE SERVICES
STATE OF NEW HAMPSHIRE
SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS
FOR THE YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
PAGE
Letter of Transmittal ............................................................................................................................ A-1
Introduction ............................................................................................................................................B-1
Summary Table of Federal Program Expenditures by State Agency ....................................................B-2
Financial Statements
Independent Auditors’ Report................................................................................................................C-1
Management’s Discussion and Analysis (Unaudited) ...........................................................................C-3
Basic Financial Statements ..................................................................................................................C-12
Notes to the Basic Financial Statements ..............................................................................................C-33
Required Supplementary Information – (Unaudited)
Budget to Actual Schedules ............................................................................................................C-85
Information about the State’s Other Postemployment Benefits Plans ............................................C-92
Reports on Compliance and On Internal Control
Independent Auditors’ 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 .................................................................................................. D-1
Independent Auditors’ Report on Compliance for Each Major Program; Report on Internal Control
Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required By
the Uniform Guidance ..................................................................................................................... D-3
Schedule of Expenditures of Federal Awards
By Federal Agency
Department of Agriculture ..................................................................................................................... E-1
Department of Commerce ...................................................................................................................... E-3
Department of Defense .......................................................................................................................... E-4
Department of Housing and Urban Development ................................................................................. E-5
Department of the Interior ..................................................................................................................... E-6
Department of Justice ............................................................................................................................ E-7
Department of Labor .............................................................................................................................. E-8
Department of Transportation ................................................................................................................ E-9
Department of Treasury ....................................................................................................................... E-11
Equal Employment Opportunity Commission ..................................................................................... E-12
General Services Administration ......................................................................................................... E-13
National Endowment for the Arts ........................................................................................................ E-14
Small Business Administration ............................................................................................................ E-15
Veterans Administration ...................................................................................................................... E-16
Environmental Protection Agency ....................................................................................................... E-17
Department of Energy .......................................................................................................................... E-18
Department of Education ..................................................................................................................... E-19
U.S. Election Assistance Commission ................................................................................................. E-21
Department of Health and Human Services......................................................................................... E-22
Social Security Administration ........................................................................................................... E-26
i
TABLE OF CONTENTS (CONTINUED)
Schedule of Expenditures of Federal Awards (Continued)
Department of Homeland Security ...................................................................................................... E-27
Notes to the Schedule of Expenditures of Federal Awards ................................................................. E-28
Schedule of Current Year Findings and Questioned Costs
For The Year Ended June 30, 2021
Part I - Summary of Auditors’ Results .................................................................................................... F-1
Part II - Financial Statement Findings ..................................................................................................... F-5
Part III - Schedule of Current Year Findings and Questioned Costs
N.H. Department of Health and Human Services .............................................................................. F-7
N.H. Department of Education ........................................................................................................ F-13
N.H. Department of Health and Human Services ............................................................................ F-17
N.H. Department of Employment Security...................................................................................... F-21
N.H. Department of Governor’s Office of Emergency Relief and Recovery.................................. F-25
N.H. Department of Education ........................................................................................................ F-31
N.H. Department of Health and Human Services ............................................................................ F-41
N.H. Department of Energy ............................................................................................................. F-62
N.H. Department of Health and Human Services ............................................................................ F-71
Status of Prior Year Findings and Questioned Costs
Summary Status of Prior Year Findings and Questioned Costs
For Fiscal Years 2020, 2019, and 2018 .............................................................................................. G-1
2020 Findings
N.H. Department of Justice............................................................................................................... G-9
N.H. Department of Transportation ................................................................................................ G-11
N.H. Department of Environmental Services ................................................................................. G-14
N.H. Department of Health and Human Services ........................................................................... G-16
2019 Findings
N.H. Department of Justice............................................................................................................. G-40
N.H. Department of Education ....................................................................................................... G-42
N.H. Department of Health and Human Services ........................................................................... G-45
2018 Findings
N.H. Department of Health and Human Services ........................................................................... G-65
NH Department of Administrative Services ................................................................................... G-80
Appendix
A-1 State Agency Listing in Numerical Order ................................................................................... H-1
A-2 State Agency Listing in Alphabetical Order ................................................................................ H-2
ii
State of New Hampshire
DEPARTMENT OF ADMINISTRATIVE SERVICES
25 Capitol Street – Room 100
Concord, New Hampshire 03301
Office@das.nh.gov
Catherine A. Keane
Deputy Commissioner
Charles M. Arlinghaus (603) 271-2059
Commissioner
(603) 271-3201 Sheri L. Rockburn
Assistant Commissioner
(603) 271-3204
LETTER OF TRANSMITTAL
To The Fiscal Committee Of The General Court:
We hereby submit the annual Single Audit Report of the State of New Hampshire for the year ended June
30, 2021. This audit has been performed in accordance with the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States. The
report that follows provides the results of the work conducted to satisfy the requirements of Title 31, Chapter
75, United States Code, otherwise known as the Single Audit Act and the reporting requirements are set
forth in the Code of Federal Regulations Title 2, part 200; Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
This report is presented in seven major sections:
• Introduction and Summary Table of Federal Program Expenditures by State Agency (section B)
• Basic Financial Statements with the Independent Auditors’ Report (section C)
• Auditors’ Reports on Compliance and on Internal Control (section D)
• Schedule of Expenditures of Federal Awards (section E)
• Schedule of Current Year Findings and Questioned Costs (section F)
• Status of Prior Years’ Findings and Questioned Costs (section G)
• Appendices (section H)
While only the basic financial statements are reproduced in this report, the complete New Hampshire
Comprehensive Annual Financial Report and the related Management Letter for the year ended June 30,
2021, are issued under separate covers and can be obtained by contacting the Department of Administrative
Services.
Department of Administrative Services
June 29, 2022
This report can be accessed online at https://das.nh.gov/accounting/reports.aspx
FAX: 603-271-6600 TDD ACCESS: RELAY NH 1-800-735-2964
THIS PAGE INTENTIONALLY LEFT BLANK
FAX: 603-271-6600 TDD ACCESS: RELAY NH 1-800-735-2964
STATE OF NEW HAMPSHIRE
SINGLE AUDIT
FOR THE YEAR ENDED JUNE 30, 2021
INTRODUCTION
The Single Audit Act requires annual audits of the State’s federal financial assistance programs. The
specific audit and reporting requirements are set forth in the Code of Federal Regulations Title 2, part
200; Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards.
This report is divided into sections: The State’s fiscal year 2021 financial statements with related
footnotes (section C), the auditors’ reports on compliance and internal control (section D), the
schedule of expenditures of federal awards (section E), the schedule of current year findings and
questioned costs (section F), the status of prior years’ findings (section G), and appendices (section
H).
The Schedule of Expenditures of Federal Awards (the Schedule or the SEFA) reports federal
expenditures for each federal financial assistance program by federal agency, as identified by the
Assistance Listing Number (ALN) [formerly: Catalog of Federal Domestic Assistance (CFDA)
number], and is used for identifying Type A and Type B programs. Type A federal programs for the
State of New Hampshire are those programs with annual federal expenditures that equal or exceed
$13,839,623. All other programs are classified as Type B programs.
The identification of Type A and B programs is used to determine which federal programs will be
tested in detail for compliance with federal laws and regulations. Under the Uniform Guidance, the
auditor uses a risk-based approach to testing. Once programs are classified as Type A or B, they are
then assessed as either high or low risk programs. High-risk Type A and select high-risk Type B
programs are considered major programs and are tested in detail for compliance with federal
regulations. In addition, all Type A programs must be tested at least once every three years. For fiscal
year 2021, 18 programs/clusters were tested as major programs. The list of major programs/clusters
tested begins on page F-2.
During fiscal year 2021, the State administered approximately 297 federal programs, with total
federal expenditures of approximately $4.61 billion. Of those programs, Type A programs/clusters
accounted for 93% of total federal expenditures, with the Medicaid program cluster, the
Unemployment Insurance program, and the Coronavirus Relief Fund accounting for approximately
72% of total expenditures. The remainder of this section groups Type A federal programs by the State
agency responsible for program administration.
B-1
STATE OF NEW HAMPSHIRE
SUMMARY TABLE OF FEDERAL EXPENDITURES
BY STATE AGENCY
FOR THE YEAR ENDED JUNE 30, 2021
ALN
(Formerly TYPE A 2021
STATE AGENCY CFDA) PROGRAM TITLE PROGRAMS EXPENDITURES
Adjutant General 12.401 National Guard Military Operations And
Maintenance (O&M) Projects 23,719,055 23,719,055
Other Programs 1,384,906
Total Adjutant General 25,103,961
Administrative Services Various Child Nutrition Cluster 4,171,346 4,171,346
Other Programs 5,800,986
Total Administrative Services 9,972,332
Agriculture Other Programs 738,583
Business and Economic Affairs Other Programs 6,839,318
Commission on Disability Other Programs 109,557
Corrections Other Programs 38,197
Developmental Disabilities Council Other Programs 643,246
Education Various Child Nutrition Cluster 38,849,994
Various Special Education Cluster 52,622,666
84.010 Title I Grants To Local Educational Agencies 40,521,383
84.425 Education Stabilization Fund 18,414,456 150,408,499
Other Programs 55,153,985
Total Education 205,562,484
Employment Security 17.225 Unemployment Insurance 981,236,885
97.050 Presidential Declared Disaster Assistance to
92,840,079 1,074,076,964
Individuals and Households - Other Needs
Other Programs 2,550,965
Total Employment Security 1,076,627,929
Environmental Services Other Programs 34,787,356
Fish & Game Other Programs 8,570,542
Governor's Office of Economic Relief and 21.019 Coronavirus Relief Fund 742,996,301
Recovery
21.023 Emergency Rental Assistance Program 40,000,000 782,996,301
Total Governor's Office of Economic Relief and 782,996,301
Recovery
Health & Human Services Various SNAP Cluster 173,333,590
Various Child Care and Development Fund Cluster 35,485,159
Various Medicaid Cluster 1,587,915,411
93.268 Immunization Cooperative Agreements 15,531,418
93.323 Epidemiology and Laboratory Capacity for 52,762,439
Infectious Diseases (ELC)
93.558 TANF 30,154,500
93.658 Foster Care - Title IV-E 18,257,233
93.788 Opiod STR 25,119,799 1,938,559,549
Other Programs 118,043,780
Total Health & Human Services 2,056,603,329
Human Rights Commission Other Programs 162,370
B-2
ALN
(Formerly TYPE A 2021
STATE AGENCY CFDA) PROGRAM TITLE PROGRAMS EXPENDITURES
Insurance Other Programs 51,239
Judicial Branch Other Programs 345,211
Justice Various Medicaid Cluster 517,055 517,055
Other Programs 16,790,287
Total Justice 17,307,342
Natural and Cultural Resources Various Highway Planning And Construction Cluster 90,100 90,100
Other Programs 3,920,829
Total Natural and Cultural Resources 4,010,929
Pease Development Authority Other Programs 646,712
Professional Licensure and Certification Other Programs 93,398
Public Utilities Commission Other Programs 567,273
Safety 97.036 Disaster Grants - Public Assistance (Presidentially
Declared Disasters) 111,923,447 111,923,447
Other Programs 13,813,157
Total Safety 125,736,604
Secretary of State Other Programs 4,000,693
Strategic Initiatives 93.568 Low-Income Home Energy Assistance 26,047,537 26,047,537
Other Programs 2,297,899
Total Strategic Initiatives 28,345,436
Transportation Various Highway Planning And Construction Cluster 170,053,345
20.223 TIFIA 21,320,688 191,374,033
Other Programs 23,508,053
Total Transportation 214,882,086
Veterans Home Other Programs 8,465,297
TOTAL EXPENDITURES 4,303,883,886 4,613,207,725
B-3
THIS PAGE INTENTIONALLY LEFT BLANK
KPMG LLP
Two Financial Center
60 South Street
Boston, MA 02111
Independent Auditors’ Report
The Fiscal Committee of the General Court
State of New Hampshire:
Report on the Financial Statements
We have audited the accompanying 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 New Hampshire (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
as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the
financial statements of the Liquor Commission and the Lottery Commission, which are major enterprise funds
and represent 7.2% and 51.5%, respectively, of the assets and revenues of the business-type activities.
Additionally, we did not audit the financial statements of the aggregate discretely presented component units.
Further, we did not audit the financial statements of the New Hampshire Retirement System, the New
Hampshire Judicial Retirement Plan and the New Hampshire Public Deposit Investment Pool, which represent
98.0% and 86.4%, respectively, of the assets and revenues of the aggregate remaining fund information. 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 these entities, are based solely on the reports of the other auditors.
We conducted our audit in accordance with 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. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement. The
financial statements of the New Hampshire Public Deposit Investment Pool and the Business Finance Authority
of the State of New Hampshire were not audited in accordance with Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
KPMG LLP, a Delaware limited liability partnership and a member firm of
the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by
guarantee.
C-1
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position 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 New Hampshire, as of June 30, 2021, and the respective
changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance
with U.S. generally accepted accounting principles.
Emphasis of Matter
As discussed in Note 1(u), to the basic financial statements, in 2021, the State of New Hampshire adopted
Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities. Our opinions are not
modified with respect to this matter.
Other Matters
Required Supplementary Information
U.S. generally accepted accounting principles require that the management’s discussion and analysis and
required supplementary information, as listed in the table of contents (collectively referred to as RSI), be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We and the other auditors have applied certain limited procedures to the RSI in
accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2021
on our consideration of the State’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of
that report is solely to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the State’s
internal control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the State’s internal control over financial
reporting and compliance.
Boston, Massachusetts
December 22, 2021
C-2
18 • NEW HAMPSHIRE
MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited)
FINANCIAL HIGHLIGHTS – PRIMARY GOVERNMENT
The following is a discussion and analysis of the financial activities of the State of New Hampshire (the State) for the fiscal year ended June 30, 2021.
We encourage readers to consider the information presented here in conjunction with additional information included in our letter of transmittal, which
can be found at the front of this report, and with the State’s financial statements which follow this section.
Government-Wide Highlights
Net Position: The total assets and deferred outflows of resources of the State exceeded total liabilities and deferred inflows of resources as of June 30,
2021 by $2.5 billion. This amount is presented as “Total Net Position” on the Statement of Net Position for the Primary Government (condensed
information can be seen later in the MD&A section of this report). Of this amount, $(2.6) billion is reported as a deficit in unrestricted net position,
representing a deficiency of unrestricted, non-capital assets, to liabilities other than capital debt.
Changes in Net Position: The State’s total net position increased by $728.2 million, or 42.2%, in fiscal year 2021 from $1,727.4 million to $2,455.6
million, as shown in the Comparative Changes in Net Position table within this report. Also reflected in this table, the State’s net position of
governmental activities increased by $542.5 million (171.6%), from $316.1 million to $858.6 million in fiscal year 2021. Net position of the business-
type activities showed an increase of $185.7 million (13.2%) related to fiscal year 2021 activity, from $1,411.3 million to $1,597.0 million. Total
change in expenses for the period were $820.7 million, or 9.2% higher than fiscal year 2020 and total change in revenues were approximately $1,708.8
million or 19.6% higher than fiscal year 2020. The increases in both program and general revenues more than offset the increase in spending, thus
increasing the overall change in net position.
Non-Current Liabilities: The State’s total non-current liabilities increased by $669.6 million or 15.9% during the current fiscal year, and is largely due
to the combined increase of $694.1 million in the State’s aggregate total OPEB and Pension liabilities, offset by decreases in outstanding Bonds. The
OPEB and Pension increases were the result of an updated actuarial valuation and experience study conducted, which changed mortality and other
assumptions.
Fund Highlights:
Governmental funds - Fund Balances: As of the close of fiscal year 2021, the State’s governmental funds reported a combined balance of all funds of
$1,542.4 million $1,065.8 million, a increase of $478.6 million over the prior year. Within the governmental funds, fund balances for the general fund,
highway fund, education fund, and the combined non-major governmental funds increased(decreased) by $394.1 million, $19.5 million, $11.0 million
and $53.9 million, respectively. For general and education funds, the fiscal year 2021 budget contemplated the use of both current year revenues and
fund balance carried forward from the prior biennium, to support current year spending. While most taxes experienced shortfall in fiscal year 2020,
many taxes rebounded in the current year such as business taxes and the real estate transfer tax, which exceeded both plan and the prior year. As of June
30, 2021, $257.8 million of the unassigned fund balance represents the Revenue Stabilization balance ("Rainy Day Fund"), as compared to $115.5
million in fiscal year 2020. The large increase of $142.3 million to the Rainy Day fund was the result of a transfer done in accordance with RSA 9:13,
which states at the close of each fiscal biennium, any General Fund Unassigned Fund Balance (Surplus) remaining, as determined by the official audit
performed pursuant to RSA 21-I:8, II(a), shall be transferred to this special non-lapsing account. For the highway fund, the increase in fund balance was
partially driven by a transfer of surplus from the previous general fund unassigned fund balance to the highway fund, as part of the adopted 2020-2021
biennial budget. The fund balance increase in the non-major funds was primarily driven by the timing of capital fund spending and receipt of bond
issuance proceeds.
The Coronavirus Relief Fund (“CRF”) is used to account for revenues and expenditures related to federal revenue received under section 601 (a) of the
Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). During fiscal year 2020, the
CARES Act established the Coronavirus Relief Fund and the State received an allocation of $1.25 billion. The State considers this fund to be a major
governmental fund, however the fund does not carry a fund balance. All revenue is recognized as eligible expenditures are incurred, with the remaining
balance classified as unearned revenue.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the State’s basic financial statements. The State’s basic financial statements
include three components:
1. Government-Wide financial statements,
2. Fund financial statements, and
3. Notes to the basic financial statements.
This report also contains required supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements
The Government-Wide Financial Statements provide a broad view of the State’s finances. These statements (Statement of Net Position and Statement
of Activities) provide both short-term and long-term information about the State’s overall financial position. They are prepared using the economic
resources measurement focus and accrual basis of accounting, which recognizes all revenues and expenses connected with the fiscal year even if cash
has not been received or paid.
The Statement of Net Position, beginning on page 28, presents all of the State’s non-fiduciary assets and liabilities as well as any deferred out- flows
of resources or deferred inflows of resources. The difference between assets and deferred outflows of resources and liabilities and deferred inflows of
resources is reported as “net position” instead of fund balance as shown on the Fund Statements. Over time, increases or decreases in the net position
may serve as a useful indicator of whether the financial position of the State is improving or deteriorating.
C-3
NEW HAMPSHIRE l 19
The Statement of Activities, beginning on page 30, presents information showing how the State’s net position changed during the most recent fiscal
year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will not result in cash flows until future fiscal periods (such as
uncollected taxes and licenses and earned but unused vacation leave). This statement also presents a comparison between direct expenses and program
revenues for each function of the State.
Both of the Government-Wide Financial Statements have separate sections for three different types of State activities. These three types of activities
are:
Governmental Activities: The activities in this section represent most of the State’s basic services and are generally supported by taxes, grants and
intergovernmental revenues. The governmental activities of the State include general government, administration of justice and public protection,
resource protection and development, transportation, health and social services, and education.
Business-Type Activities: These activities are normally intended to recover all or a significant portion of their costs through user fees and charges to
external users of goods and services. These business-type activities of the State include the operations of the:
Liquor Commission,
Lottery Commission (includes Racing & Charitable Gaming),
Turnpike System,
State Revolving Fund (SRF), and
New Hampshire Unemployment Compensation Trust Fund
Discretely Presented Component Units: Component Units are entities that are legally separate from the State, but for which the State is financially
accountable. The State’s discretely presented component units are presented in the aggregate in these Government-Wide Statements and include the:
University System of New Hampshire (USNH),
Business Finance Authority of the State of New Hampshire
Community Development Finance Authority,
Pease Development Authority,and
The Community College System of New Hampshire
Complete financial statements of the individual component units can be obtained from their respective administrative offices. Addresses and other
additional information about the state’s component units are presented in the notes to the basic financial statements.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives.
The State, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
The fund financial statements, focus on the individual parts of the State government, and report the State’s operations in more detail than the
government-wide statements. The State’s funds are divided into three categories – governmental, proprietary and fiduciary. For governmental and
proprietary funds, only those funds that are considered Major Funds are reported in individual columns in the Fund Financial Statements with the Non-
Major Funds reported in the aggregate. Fiduciary funds are reported by fiduciary type (pension, private-purpose, investment trust, and custodial).
Governmental Funds: Most of the basic services provided by the State are financed through governmental funds. Unlike the Government-Wide
Financial Statements, the Governmental Fund Financial Statements report using the current financial resources measurement focus and modified
accrual basis of accounting, which measures cash and all other financial assets that can readily be converted into cash. Governmental fund information
helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the State’s programs. The
Governmental Fund Financial Statements can be found on pages 33 and 35.
Because the focus of governmental funds is narrower than that of the Government-Wide Financial Statements, it is useful to compare the information
presented here with similar information presented in the Government-Wide Financial Statements. Reconciliations are provided between the
Governmental Fund Financial Statements and the Government-Wide Financial Statements, which can be found on pages 34 and 36.
The State’s major governmental funds include the General Fund, Coronavirus Relief Fund, Highway Fund, and Education Fund.
Individual fund data for each of the State’s non-major governmental funds (Fish and Game Fund, Capital Projects Fund, Other Governmental Fund, and
Permanent Funds) are provided in the combining statements found on pages 116 and 117.
Proprietary Funds: The State’s proprietary funds charge a user fee for the goods and services they provide to both the general public and other
agencies within the State. These activities are reported in five enterprise funds and one internal service fund. The enterprise funds, which are all
considered major funds, report activities that provide goods and services to the general public and include the operations of the Liquor Commission,
Lottery Commission, Turnpike System, SRF Fund and the New Hampshire Unemployment Trust Fund. The Internal Service Fund reports health-
related fringe benefit services for the State’s programs and activities.
Like the Government-Wide Financial Statements, Proprietary Fund Financial Statements use the economic resources measurement focus and accrual
basis of accounting. Therefore there is no reconciliation needed between the Government-Wide Financial Statements for business-type activities and the
Proprietary Fund Financial Statements. The Internal Service Fund is reported within governmental activities on the Government-Wide Financial
Statements. The basic proprietary funds financial statements can be found on pages 38 through 41.
Fiduciary Funds and Similar Component Units: These funds are used to account for resources held for the benefit of parties outside the state
government. Fiduciary funds are not reflected in the Government-Wide Financial Statements because the resources of these funds are not available to
support the State’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds in that they use the economic
resources measurement focus and accrual basis of accounting.
C-4
20 • NEW HAMPSHIRE
The State’s fiduciary funds on pages 43-44 include the:
• Pension Trust Funds which account for the activity of the New Hampshire Retirement System and the New Hampshire Judicial Retirement
Plan, which are component units of the State,
• Private-Purpose Trust Funds which account for the activity of trust arrangements under which principal and income benefit individuals,
private organizations, or other governments,
• Investment Trust Fund which accounts for the activity of the external investment pool known as the New Hampshire Public Deposit
Investment Pool (NHPDIP), and
• Custodial Funds which report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds,
investment trust funds, or private-purpose trust funds.
Individual fund detail can be found in the combining financial statements in the Other Supplementary Information Section.
Major Component Unit
The State has only one major discretely presented component unit - the University System of New Hampshire and four non-major discretely presented
component units. This separation is determined by the relative size of the individual entities’ assets, liabilities, revenues and expenses in relation to the
combined total of all component units. The combining financial statements for the component units can be found on pages 46 and 47.
Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and the fund financial
statements. The notes to the financial statements begin on page 49.
Required Supplementary Information
In addition to this Management’s Discussion and Analysis, the basic financial statements and accompanying notes are followed by a section of required
supplementary information. This section includes a budgetary comparison schedule for each of the State’s major governmental funds, and includes
reconciliation between the statutory fund balance for budgetary purposes and the fund balance as presented in the governmental fund financial
statements. In addition, information about the New Hampshire Retirement System and the New Hampshire Judicial Retirement Plan, as required under
GASBS 68 and information about the Trusted and Non-Trusted Other Post Employment Benefit Plans (OPEB), as required under GASB 75.
Other Supplementary Information
Other supplementary information includes combining financial statements and schedules for governmental, internal service and fiduciary funds and
non-major component units.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Position
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The State’s combined net position
(governmental and business-type activities) totaled $2.5 billion as of June 30, 2021 which was $728.2 million, or 42.15%, higher than the net position
as of June 30, 2020.
Comparative Net Position as of June 30, 2021 and 2020 (* as restated)
(In Thousands)
Governmental Activities Business-Type Activities Total Primary Government
2021 2020 2021 2020 2021 2020
Current assets $ 2,673,499 $ 1,993,892 $ 746,268 $ 618,482 $ 3,419,767 $ 2,612,374
Capital assets 3,340,759 3,325,174 985,716 986,522 4,326,475 4,311,696
Other assets 652,189 823,193 531,514 572,359 1,183,703 1,395,552
Total assets 6,666,447 6,142,259 2,263,498 2,177,363 8,929,945 8,319,622
Total deferred outflows of resources 633,472 206,723 34,655 11,438 668,127 218,161
Current liabilities 1,536,616 1,592,217 177,064 243,339 1,713,680 1,835,556
Noncurrent liabilities 4,395,088 3,725,984 487,344 486,821 4,882,432 4,212,805
Total liabilities 5,931,704 5,318,201 664,408 730,160 6,596,112 6,048,361
Total deferred inflows of resources 509,599 714,679 36,743 47,295 546,342 761,974
Net position:
Net investment in capital assets 2,460,257 2,442,642 658,160 629,432 3,118,417 3,072,074
Restricted 899,744 811,303 1,000,010 836,985 1,899,754 1,648,288
Unrestricted (2,501,385) (2,937,843) (61,168) (55,071) (2,562,553) (2,992,914)
Total net position $ 858,616 $ 316,102 $ 1,597,002 $ 1,411,346 $ 2,455,618 $ 1,727,448
C-5
NEW HAMPSHIRE l 21
Comparative Changes in Net Position
For Fiscal Years Ended June 30, 2021 and 2020
(In Thousands)
Governmental Activities * Business-Type Activities Total Primary Government *
2021 2020 2021 2020 2021 2020
Revenues
Program revenues:
Charges for services $ 1,113,097 $ 995,385 $ 1,628,076 $ 1,366,720 $ 2,741,173 $ 2,362,105
Operating grants & contributions 3,512,151 2,823,948 948,090 821,443 4,460,241 3,645,391
Capital grants & contributions 209,205 208,723 27 5 209,232 208,728
General revenues:
General property taxes 380,858 386,004 380,858 386,004
Business income taxes 1,104,374 654,400 1,104,374 654,400
Meals and rentals tax 333,877 316,114 333,877 316,114
Special taxes 652,545 633,110 652,545 633,110
Personal taxes 252,425 213,654 252,425 213,654
Business license taxes 170,992 174,691 170,992 174,691
Interest 18,234 18,361 18,234 18,361
Miscellaneous 98,093 100,735 98,093 100,735
Total revenues 7,845,851 6,525,125 2,576,193 2,188,168 10,422,044 8,713,293
Expenses
General government 1,023,931 938,745 1,023,931 938,745
Administration of justice and public protection 686,499 583,877 686,499 583,877
Resource protection and development 194,219 197,678 194,219 197,678
Transportation 514,303 485,317 514,303 485,317
Health and social services 3,547,901 3,092,544 3,547,901 3,092,544
Education 1,612,262 1,443,493 1,612,262 1,443,493
Interest expense 24,007 27,426 24,007 27,426
Turnpike System 99,106 99,371 99,106 99,371
Liquor Commission 624,976 599,886 624,976 599,886
Lottery Commission 374,646 293,314 374,646 293,314
SRF 19,653 14,299 19,653 14,299
Unemployment Compensation Trust Fund 972,371 1,097,245 972,371 1,097,245
Total expenses 7,603,122 6,769,080 2,090,752 2,104,115 9,693,874 8,873,195
Increase/ (decrease) in net position before 242,729 (243,955) 485,441 84,053 728,170 (159,902)
transfers and other items
Transfers & other items 299,785 268,771 (299,785) (268,771)
Increase/ (decrease) in net position 542,514 24,816 185,656 (184,718) 728,170 (159,902)
Net position - July 1, as restated (Note 1.U)* 316,102 291,286 1,411,346 1,596,064 1,727,448 1,887,350
Net position - June 30 $ 858,616 $ 316,102 $ 1,597,002 $ 1,411,346 $ 2,455,618 $ 1,727,448
C-6
22 • NEW HAMPSHIRE
Governmental Activities - Revenue
Fiscal Year Ended June 30, 2021
Special Taxes: 8.3% Personal Taxes: 3.2%
Meals and Rentals Tax: 4.3% Business License taxes: 2.2%
Interest & Miscellaneous: 1.5%
Business Income Taxes: 14.1% Charges for Services: 14.2%
General Property Taxes: 4.9%
Grants & Contributions: 47.4%
Governmental Activities - Expenses
Fiscal Year Ended June 30, 2021
Health and Social Services: 46.7%
Transportation: 6.8% Education: 21.2%
Resource Protection and
Development: 2.6%
Interest Expense: 0.3%
Administration of Justice
and Public Protection: 9.0%
General Government: 13.5%
C-7
NEW HAMPSHIRE l 23
Net Investment in Capital Assets: The largest portion of the State’s net position reflects its investment in capital assets such as land, buildings,
equipment, and infrastructure (roads and bridges); less any related outstanding debt used to acquire those assets. The State’s net investment in capital
assets increased $46.2 million from prior year. This increase was a combination of an increase in net capital assets of $15.0 million combined with a
$33.6 million decrease in bonded debt related to capital assets, primarily a decrease in Turnpike bonds of $29.6 million (from $293.5 million last year to
$263.9 million this year). Although the State’s investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves generally cannot be used to liquidate these liabilities.
Restricted Net Position: Another portion of the State’s net position, $1,899.8 million, represents resources that are subject to external restrictions on
how they may be used. State-imposed designations of resources, unless resulting from enabling legislation, are not presented as restricted net position.
Restricted net position increased $251.5 million from prior year, more than half of the increase as a result of the unemployment compensation trust fund
balance increasing $157.7 million from a combination of additional federal funding and transfers from the State's CRF to stabilize the fund's balance.
Unrestricted Net Position: The deficit in the State’s unrestricted net position is $2,562.6 million as compared to a deficit of $2,992.9 million from the
previous year. The two largest components of the deficit are the net pension liability of $1,231.1 million and the other postemployment benefit liability
of $2,197.6 million. While both long term liabilities increased over the prior year, unrestricted revenues came in significantly higher than plan, which
positively impacted the deficit unrestricted net position.
Changes in Net Position
The State’s total net position increased by $728.2 million, or 42.2%, from current fiscal year activities. Total revenues were $10,422.0 million, an
increase of $1,708.9 million (19.6%) as compared to the prior year, and total reported expenses were $9,693.9 million, an increase of $820.7 million
(9.2%) as compared to the prior year. The increases in both program and general revenues more than offset the increase in spending.
More than half of the State’s revenue (71.3%) is from program revenue, consisting of charges for services, and federal and local grants. This includes
significant federal funding from the CARES Act and American Rescue Plan Act. Revenues not specifically targeted for a specific program are known
as general revenues, which are primarily from taxes. In total, program revenues exceeded the prior fiscal year by $1,194.4 million and general revenues
increased $514.5 million as compared to prior year. The favorable results can be attributed in large part to the impact of the COVID-19 pandemic on the
State’s economy. While in prior year several taxes had underperformed, in the current year several taxes experienced a turnaround. Business Taxes
Real Estate Transfer Taxes (under Special Taxes), and Tobacco Taxes (under Personal Taxes) were all above plan and prior year and while Meals and
Rental Taxes fell short of plan, they still exceed the prior year.
The State’s expenses cover a range of services. The largest expenses were for Health and Social Services and Education, which accounted for 46.4%
and 21.1% of total expenses, respectively.
Analysis of Changes in Revenues and Expenses
For Fiscal Year Ending June 30, 2021 Compared to 2020
($ In Millions)
Governmental Business-Type Total
Activities Activities Primary Government
$Change % Change $Change % Change $Change % Change
Revenues
Program revenues:
Charges for services $ 117.7 11.8 % $ 261.4 19.1 % $ 379.1 16.0 %
Operating grants & contributions 688.2 24.4 % 126.6 15.4 % 814.8 22.4 %
Capital grants & contributions 0.5 0.2 % 0.5 0.2 %
General revenues:
General Property Taxes (5.1) (1.3)% (5.1) (1.3)%
Business Income taxes 450.0 68.8 % 450.0 68.8 %
Meals and Rental Taxes 17.8 5.6 % 17.8 5.6 %
Special taxes 19.4 3.1 % 19.4 3.1 %
Personal taxes 38.8 18.2 % 38.8 18.2 %
Business License taxes (3.7) (2.1)% (3.7) (2.1)%
Interest (0.1) (0.5)% (0.1) (0.5)%
Miscellaneous (2.6) (2.6)% (2.6) (2.6)%
Total revenues 1,320.9 20.2 % 388.0 17.7 % 1,708.9 19.6 %
Expenses
General government 85.2 9.1 % 85.2 9.1 %
Administration of justice and public protection 102.6 17.6 % 102.6 17.6 %
Resource protection and development (3.5) (1.8)% (3.5) (1.8)%
Transportation 29.0 6.0 % 29.0 6.0 %
Health and social services 455.4 14.7 % 455.4 14.7 %
Education 168.8 11.7 % 168.8 11.7 %
Interest Expense (3.4) (12.4)% (3.4) (12.4)%
Turnpike System (0.3) (0.3)% (0.3) (0.3)%
Liquor Commission 25.1 4.2 % 25.1 4.2 %
Lottery Commission 81.3 27.7 % 81.3 27.7 %
SRF Fund 5.4 37.8 % 5.4 37.8 %
Unemployment Compensation (124.9) (11.4)% (124.9) (11.4)%
Total expenses $ 834.1 12.3 % $ (13.4) (0.6)% $ 820.7 9.2 %
C-8
24 • NEW HAMPSHIRE
Governmental Activities
Governmental activities increased the State’s net position by $242.7 million, before transfers and other items. Revenues increased by $1,320.7 million
or 20.24% from the prior year to total $7.8 billion. Total program revenue, consisting of charges for goods and services, and federal and local grants and
other funding, increased $806.4 million or 20.0%, taxes and other revenues increased $514.3 million, or 20.6%. Reported expenses increased $834.1
million or 12.3%. The rise in program revenues and expense was driven largely by an increase in federal grants, with the largest increase relating to
federal funding for health and social services programs, including Medicaid, National Guard programs, as well as coronavirus relief fund payments.
A comparison of the cost of services by function for the State’s governmental activities with the related program revenues is shown in the chart above.
The largest expenses for the State, Health and Social Services and Education, also represent those activities that have the largest gap between expense
and program revenues. Since many of these significant program costs are not fully recovered from program revenues, these programs are supplemented
from general revenues.
Business-Type Activities
Charges for goods and services for the State’s combined business type activities were more than adequate to cover the operating expenses and resulted
in an increase in net position of $485.4 million prior to transfers. Business-Type activities include the operations from the Liquor Commission, Lottery
Commission, SRF Fund, Unemployment Compensation Fund, and Turnpike Fund. The majority of business-type activities experienced similar levels of
activity and change in net position as in the prior year, except for the Unemployment Compensation Fund.
While the Unemployment Compensation Fund still had significant claims as a result of the pandemic, $972.3 million as compared to $1.1 billion last
year, the fund received more federal grants and subsidies to offset the rise in claims. In fiscal year 2020 Unemployment experienced a decrease in net
position before transfers of ($236.4) million, whereas in fiscal year 2021 the fund saw an increase in net position of $113.5 million. In addition, in
October 2020 the Governor authorized $50 million of CARES Act funds to be deposited into the Unemployment Compensation fund, in order to
stabilize the fund going forward. With that funding and consideration of current forecasting, the State anticipates the Unemployment Compensation
fund will remain solvent.
Operations of the Liquor Commission generated net income before transfers of $182.5 million, an increase of $24.4 million (15.4%) from the prior year.
Transfers from the Liquor Commission to the General Fund unrestricted revenue totaled $163.9 million for fiscal year 2021, as compared to $144.9
million in fiscal year 2020, and were used to fund the general operations of the State. Also in fiscal year 2021, $18.5 million in liquor profits were
transferred to the State’s Alcohol Abuse Prevention and Treatment fund, as compared to $10.0 million in the prior year. The Lottery Commission net
income before transfers of $144.4 million was an increase of $45.1 million (45.4%) as compared to the prior year net income of $99.3 million. Lottery
experienced higher sales as a result of extremely large jackpots for Mega Millions and Powerball along with continued increases in instant scratch
tickets. The Turnpike System generated net income before transfers of $27.3 million, which was a $3.7 million decrease from $37.0 million in the prior
year, or 38.3%. Road toll revenues continue to lag below expectations with limited commuter and leisure travel, while expenses remained constant as a
result of the COVID-19 global pandemic. The operations of the State Revolving Fund continue to yield an overall increase in net position. As in
previous years, revenue from federal grants and interest exceed the administrative costs to run the program. For fiscal year 2021, net position increased
by $17.8 million.
FINANCIAL ANALYSIS OF THE STATE’S FUNDS
As noted earlier, the State uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds
The focus of the State’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the State’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a
government’s net resources available for spending at the end of the fiscal year. Total Governmental Fund Balances were $1,542.4 million at 6/30/21, of
which $1,240.3 million represents the General Fund's balance. Revenues were in excess of expenditures by $64.7 million before Other Financing
Sources (Uses).
General Fund
The general fund is the primary operating fund of the State. The total fund equity at June 30, 2021 is $1,240.3 million, which was an increase of
$394.1 million over the prior year balance of $846.2 million. Revenues in the general fund were $5,307.4 million, $900.6 million (20.4%) higher than
the prior year, with significant increases in business and special taxes, along with increased federal funding. Unlike fiscal year 2020, unrestricted
revenues in fiscal year 2021 exceeded both plan and prior year. The top three performers, all exceeding plan by more than 25%, were Business Taxes,
Real Estate Transfer Tax, and Tobacco Taxes. Expenditures increased by $485.8 million (10.5%) to $5,099.4 million, which was primarily the result of
the increase in Health and Social Services expenditures.
The total General Fund unassigned fund balance is comprised of the Undesignated fund balance and the Rainy Day fund balance. Pursuant to RSA
9;13-e, at the close of each fiscal biennium, any General Fund Unassigned Fund Balance (Surplus) remaining, as determined by the official audit
performed pursuant to RSA 21-I:8, II(a), shall be transferred to the Rainy Day account. During 2021, a transfer of $0.1 million for 10% of certain
settlements, and a transfer of general fund surplus from the Fiscal 2020-2021 biennium of $142.2 million, brought the Rainy Day fund at June 30, 2021
to $257.8 million, leaving the Undesignated balance at zero.
Coronavirus Relief Fund
As noted, the CRF does not carry a fund balance but federal payments received are held by State Treasury and revenue is recognized as eligible
expenditures are incurred, with the remaining balance classified as unearned revenue. For fiscal year 2021 the CRF reported expenditures (including
transfers out) and revenue of $690.3 million as compared to $493.3 million in fiscal year 2020, bringing the initial unearned of $1.25 billion down to
$66.7 million. These expenditures represent purchases of equipment to assist the State in its response to the COVID-19 global pandemic, as well as
grant programs to assist small businesses with the economic disruption.
C-9
NEW HAMPSHIRE l 25
Education Fund
As noted, the education trust fund did not have a deficit balance as of June 30, 2021, but ended with surplus revenues which, per statute, remain in the
fund and are classified as assigned fund balance. A portion of this surplus has been designated by the legislature to be appropriated in fiscal year 2022.
Highway Fund
The highway fund ended the year with a restricted fund balance of $136.9 million and assigned fund balance of $26.0 million, up $8.1 million from
$17.9 million in the prior year reflecting surplus transfers from the General Fund. As the highway fund revenues include revenues primarily restricted
by the State Constitution or the Federal Government, the fund balance as of June 30, 2021 is predominantly classified as restricted. Without the surplus
transfer of $8.1 million, total fund balance increased $11.4 million during fiscal year 2021 due to higher lapsed expenditures as compared to the
budgeted amounts, offset by decreased revenue collections in part resulting from the COVID-19 global pandemic and the reduction in both commuter
and leisure travel.
Proprietary Funds
The State’s proprietary fund statements provide the same type of information found in the Government-Wide Financial Statements, but in more detail.
Like the Government-Wide Financial Statements, Proprietary Fund Financial Statements use the accrual basis of accounting. Therefore there is no
reconciliation needed between the Government-Wide Financial Statements for business-type activities and the Proprietary Fund Financial Statements.
BUDGETARY HIGHLIGHTS
During the fiscal year, the original budget was amended by various supplemental appropriations and appropriation revisions. Budget to Actual
Schedules for the major governmental funds that have a legally adopted budget are in the Required Supplementary Information section beginning on
page 101.
General Fund:
The net increase from the original budget of $5,059.4 million to the final budget of $8,275.2 million is $3,215.7 million and represents additional
appropriations issued after adoption of the operating budget, primarily in the following categories of government: Health & Social Services ($1,677.1
million), Education ($613.9 million), Justice & Public Protection ($457.9 million), General Government ($298.0 million), Resource Protection and
Development ($104.3 million) and Transportation ($64.6 million). Additional federal funds were granted under the Coronavirus Aid, Relief and
Economic Security Act of 2020 (“CARES Act”) and the American Rescue Plan Act of 2021 ("ARPA") which resulted in additional appropriations that
were not part of the originally adopted budget. This included funding for Medicaid, Health, and Education programs. In addition, the final budget
reflects all appropriations included in the companion legislation which accompanied the original adopted budget. As noted earlier, during deliberations
as part of the budget for the 2022-2023 biennium, the Legislature designated much of the excess fiscal 2021 general fund revenue to fund initiatives
which is also included in the final budgeted appropriations for fiscal year 2021. This includes: $36 million for the Department of Health and Human
Services for the construction of a forensic psychiatric hospital and transitional housing beds; $25 million for the Affordable Housing Fund; $15.6
million Department of Environmental Services’ state aid grants, as well as multiple other supplemental appropriations.
Total actual expenditures were approximately $2,705.2 million lower than the final budget, primarily within the Department of Health & Human
Services ($1,213.6 million), the Department of Education ($580.8 million), Department of Environmental Services ($173.8 million) and the
Department of Safety ($157.1 million), This variance was largely due to the timing of program expenditures and certain supplemental appropriations
for programs designated for the ’20-21 biennium and the '22-23 biennium (retroactively appropriated to '21), which were not completed in fiscal year
2021.
Actual total revenue was less than the final budget by approximately $1,592.4 million which was primarily the result of additional federal funding
($1,082.2 million) from CARES and ARPA that were budgeted but not spent, therefore revenues remained unearned at the end of fiscal year 2021.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The State’s investment in capital assets for its governmental and business-type activities as of June 30, 2021, amounted to $8.3 billion, with
accumulated depreciation amounts of $3.9 billion, leaving a net book value of $4.3 billion, consistent with the prior year. The investment in capital
assets includes equipment, real property, infrastructure, computer software, and construction in progress. Infrastructure assets are items that are
normally immovable, of value only to the State, and include only roads and bridges. The net book value of the State’s infrastructure for its roads and
bridges approximates $2.7 billion, consistent with the prior year.
The 2020-2021 capital budget authorized $261 million in capital appropriations, leveraging approximately $125 million in general fund bonding
authority, with the balance from other sources. Some of the State’s larger projects resulting in capitalized assets during fiscal year 2021 include:
• $19.7 million in various computer software system installations and equipment upgrades at the Departments of Health and Human
Services ($9.9 million), Employment Security ($3.3 million) and Department of Safety ($6.5 million).
• Buildings and building improvements of approximately $22.9 million relating to National Guard armory and headquarter locations.
• Increased capitalized equipment of $15.5 million towards transportation and other operational improvements.
• Department of Transportation continued expenditures towards highways, bridges and other state infrastructure improvements.
Additional information on the state’s capital assets can be found in Footnote 4 of the Notes to the Basic Financial Statements.
Debt Administration
The State may issue general obligation bonds and notes, revenue bonds, and notes in anticipation of such bonds authorized by the Legislature and
Governor and Council. The State may also directly guarantee certain authority or political subdivision obligations. At the end of the current fiscal year,
the State had total bond and note payables outstanding of $1,247.1million. Of the total amount, $881.1 million are general obligation bonds, direct
placement bonds, and notes payable, which are backed by the full faith and credit of the State, and $90.8 million are Federal Highway Grant
C-10
26 • NEW HAMPSHIRE
Anticipation Bonds (GARVEE). The remainder of the State’s debt is Turnpike revenue bonds, which are secured by the specified revenue sources
within the Turnpike System.
The State issued 2 separate General Obligation Capital Improvement Bonds 2020 totaling $49.5 million of which the proceeds will be used to fund all
or part of various capital projects of the State. In addition the State issued 2 separate series of refunding bonds totaling $87.1 million. Neither refunding
extended maturities, but will produce savings of approximately $10.8million over the next ten years, with $2.1 million in fiscal year 2021.
In May 2016, the State entered into the Transportation Infrastructure Finance and Innovation Act (TIFIA) financing agreement to advance the
construction of the remaining I-93 expansion projects. The loan proceeds are being used on four Federal Highway Administration (FHWA) approved
projects included in the I-93 widening project, of which were active in the state fiscal year 2021. Total proceeds attributed to fiscal year 2021
expenditures were $21.3 million, representing an addition to the long-term note payable.
Additional information on the State’s long-term debt issuances and obligations can be found in Footnote 5 of the Notes to the Basic Financial
Statements.
Fitch Ratings has assigned the State's bond rating of AA+, Moody's Investors Service of Aa1, and Standard & Poor's of AA, all with a stable outlook.
ECONOMIC CONDITIONS AND OUTLOOK
On March 13, 2020 Governor Sununu declared a State of Emergency in New Hampshire due to the COVID-19 Global Pandemic (the “pandemic”).
Prior to this, in January 2020, the State had an unemployment rate of 2.6 percent, continuing a years-long run of a rate well under 3 percent. But within
weeks of the Governor’s emergency orders issued in March, the rate jumped to 17.1 percent in April, dropping to 9.2 percent by June. However over
the next twelve months, with the influx of additional federal funding and strong tax growth from business and the real estate transfer tax, the State's
economy rebounded. In June 2021 the Governor ended the State of Emergency. New Hampshire's unemployment was down to 2.9% as of June 2021 in
line with pre-pandemic levels.
Fiscal Year 2022 Revenue Performance for the five months ended November 30, 2021
Unrestricted revenue for the General and Education Funds received during November totaled $131.9 million, which was above the plan by $27.0
million (25.7%) and below the prior year by $9.4 million (6.6%). Year-to-date unrestricted revenue totaled $878.4 million, which was above plan by
$98.0 million (12.6%) and above prior year by $62.7 million (7.7%).
Cash basis collections are performing strong in the following revenue categories:
• Business tax collections through November totaled $313.5 million which was $60.2 million (23.8%) above plan and $54.8 million
(21.2%) above prior year.
• Meals and Rental Tax collections through November of $154.3 million were $35.5 million (29.9%) above plan and $8.1 million
(5.5%) above prior year.
• Real Estate Transfer Taxes through November of $104.7 million were $3.5 million (3.5%) above plan and $17.8 million (20.5%)
above prior year.
Additional discussion of the region's economy is found in the Commissioner's Transmittal Letter.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the State’s finances for all of New Hampshire citizens, taxpayers, customers, investors
and creditors. This financial report seeks to demonstrate the State’s accountability for the money it receives. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to: State of New Hampshire, Department of
Administrative Services, Division of Accounting Services, 25 Capitol Street, State House Annex Room 310, Concord, NH 03301.
C-11
NEW HAMPSHIRE l 27
Basic Financial Statements
C-12
28 • NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
STATEMENT OF NET POSITION
JUNE 30, 2021
(Expressed in Thousands)
Primary Government
Governmental Business-Type Component
Activities Activities Total Units
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,517,741 $ 123,314 $ 1,641,055 $ 139,423
Cash and Cash Equivalents-Restricted 33,781 332,027 365,808 17,880
Investments 139,741
Investments - Restricted 99,521 99,521
Receivables (Net of Allowances for 1,024,447 33,412 1,057,859 64,390
Uncollectibles)
Other Receivables-Restricted 94,763 94,763
Internal Balances Receivable (Payable) 26,663 (26,663)
Inventories 61,942 85,438 147,380
Other Current Assets 8,925 141 9,066 10,525
Other Current Assets-Restricted 4,315 4,315
Total Current Assets 2,673,499 746,268 3,419,767 371,959
Noncurrent Assets:
Receivables (Net of Allowances for 29,671 29,671 26,974
Uncollectibles)
Other Receivables-Restricted 475,798 475,798
Investments 25,143 25,143 1,036,363
Investments-Restricted 597,375 51,148 648,523
Other Assets 42,714
Other Assets-Restricted 4,568 4,568
Capital Assets:
Land & Land Improvements 719,320 106,832 826,152 15,256
Buildings & Building Improvements 1,058,099 72,126 1,130,225 2,101,163
Equipment & Computer Software 588,524 87,911 676,435 161,136
Construction in Progress 143,992 47,103 191,095 60,264
Infrastructure 4,254,353 1,176,111 5,430,464
Less: Allowance for Depreciation (3,423,529) (504,367) (3,927,896) (1,035,197)
Net Capital Assets 3,340,759 985,716 4,326,475 1,302,622
Total Noncurrent Assets 3,992,948 1,517,230 5,510,178 2,408,673
Total Assets 6,666,447 2,263,498 8,929,945 2,780,632
DEFERRED OUTFLOWS OF RESOURCES 633,472 34,655 668,127 85,151
C-13
The notes to the basic financial statements are an integral part of this statement.
NEW HAMPSHIRE l 29
STATE OF NEW HAMPSHIRE
STATEMENT OF NET POSITION
June 30, 2021
(Expressed in Thousands)
Primary Government
Governmental Business-Type Component
Activities Activities Total Units
LIABILITIES
Current Liabilities:
Accounts Payable $ 410,219 $ 92,582 $ 502,801 $ 96,272
Accrued Payroll 61,247 4,247 65,494 5,892
Unearned Revenue 874,785 17,293 892,078 61,584
Unclaimed Property & Prizes 21,457 2,987 24,444
General Obligation Bonds Payable 69,099 5,532 74,631
Federal Highway Grant Anticipation Bond Payable 14,400 14,400
Claims & Compensated Absences Payable 41,395 2,151 43,546 37,513
Other Liabilities 44,014 25,987 70,001 12,358
Revenue Bonds Payable 26,285 26,285 32,052
Total Current Liabilities 1,536,616 177,064 1,713,680 245,671
Noncurrent Liabilities:
General Obligation Bonds Payable, Net 671,944 40,717 712,661
Federal Highway Grant Anticipation Bond Payable 61,400 61,400
Revenue Bonds Payable, Net 263,925 263,925 381,003
Notes Payable 196,238 196,238
Claims & Compensated Absences Payable 108,435 8,739 117,174 33,926
Other Postemployment Benefits Payable 2,087,806 109,844 2,197,650 200,643
Derivative Instruments - Interest Rate Swaps 22,280
Net Pension Liability 1,173,739 57,447 1,231,186 74,546
Other Noncurrent Liabilities 95,526 6,672 102,198 81,553
Total Noncurrent Liabilities 4,395,088 487,344 4,882,432 793,951
Total Liabilities 5,931,704 664,408 6,596,112 1,039,622
DEFERRED INFLOWS OF RESOURCES 509,599 36,743 546,342 51,858
NET POSITION
Net Investment in Capital Assets 2,460,257 658,160 3,118,417 907,450
Restricted for Debt Repayments 54,496 54,496
Restricted for Uninsured Risks 4,014 4,014
Restricted for Unemployment Benefits 36,306 202,598 238,904
Restricted for Permanent Funds-Expendable 16,979 16,979
Restricted for Permanent Funds-Non-Expendable 12,660 12,660
Restricted for Prize Awards - MUSL & Tri-State 4,568 4,568
Restricted for Environmental Remediation 280,958 280,958
Restricted for Environmental Loan Programs 916 733,462 734,378
Restricted for Health and Social Services 220,398 220,398
Restricted for Facility Sustainment 705 705
Restricted for Highway 136,887 136,887
Restricted for Other Purposes 194,640 194,640
Restricted for Loan Receivable 167 167
Restricted Component Unit Net Position 666,138
Unrestricted Net Position (Deficit) (2,501,385) (61,168) (2,562,553) 200,715
Total Net Position $ 858,616 $ 1,597,002 $ 2,455,618 $ 1,774,303
C-14
The notes to the basic financial statements are an integral part of this statement.
30 • NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Program Revenues
Operating Grants Capital Grants
Charges for and and
Functions/Programs Expenses Services Contributions Contributions
PRIMARY GOVERNMENT
Governmental Activities:
General Government $ 1,023,931 $ 373,247 $ 701,644
Administration of Justice & Public Protection 686,499 434,461 203,424
Resource Protection and Development 194,219 93,754 37,566 66
Transportation 514,303 15,995 19,719 209,139
Health and Social Services 3,547,901 193,639 2,297,528
Education 1,612,262 2,001 252,270
Interest Expense 24,007
Total Governmental Activities 7,603,122 1,113,097 3,512,151 209,205
Business-type Activities:
Turnpike System 99,106 126,446 27
Liquor Commission 624,976 807,427
Lottery Commission 374,646 519,034
SRF 19,653 15,121 22,283
Unemployment Compensation 972,371 160,048 925,807
Total Business-type Activities 2,090,752 1,628,076 948,090 27
Total Primary Government $ 9,693,874 $ 2,741,173 $ 4,460,241 $ 209,232
COMPONENT UNITS
University System of New Hampshire 912,227 529,598 386,279 64,568
Non-Major Component Units 158,420 64,881 72,475 3,653
Total Component Units $ 1,070,647 $ 594,479 $ 458,754 $ 68,221
General Revenues:
General Property Taxes
Business Income Taxes
Meals and Rental Taxes
Special Taxes
Personal Taxes
Business License Taxes
Interest & Investment Income
Miscellaneous
Payments from State of New Hampshire
Transfers - Internal Activities
Total General Revenues and Transfers
Changes in Net Position
Net Position - July 1, as restated (Note 1.U) *
Net Position - June 30
C-15
The notes to the basic financial statements are an integral part of this statement.
NEW HAMPSHIRE l 31
Net (Expenses) Revenues and Changes in Net Position
Primary Government
Governmental Business-Type Component
Activities * Activities Total * Units
$ 50,960 $ 50,960
(48,614) (48,614)
(62,833) (62,833)
(269,450) (269,450)
(1,056,734) (1,056,734)
(1,357,991) (1,357,991)
(24,007) (24,007)
(2,768,669) (2,768,669)
$ 27,367 27,367
182,451 182,451
144,388 144,388
17,751 17,751
113,484 113,484
485,441 485,441
$ (2,768,669) $ 485,441 $ (2,283,228)
68,218
(17,411)
$ 50,807
380,858 380,858
1,104,374 1,104,374
333,877 333,877
652,545 652,545
252,425 252,425
170,992 170,992
18,234 18,234
98,093 98,093
148,422
299,785 (299,785)
3,311,183 (299,785) 3,011,398 148,422
542,514 185,656 728,170 199,229
316,102 1,411,346 1,727,448 1,575,074
$ 858,616 $ 1,597,002 $ 2,455,618 $ 1,774,303
C-16
The notes to the basic financial statements are an integral part of this statement.
32 • NEW HAMPSHIRE
Fund Financial Statements
Governmental Funds
General Fund: The General Fund is the State’s primary operating fund and accounts for all
financial transactions not accounted for in any other fund.
Coronavirus Relief Fund: The Coronavirus Relief Fund is used to account for revenues
and expenditures related to federal revenue received under section 601 (a) of the Social Security
Act, as added by section 5001 of the Coronavirus Aid, Relief and Economic Security Act
(“CARES Act”).
Highway Fund: Under the State Constitution, all revenues in excess of the necessary cost
of collection and administration accruing to the State from motor vehicle registration fees,
operators’ licenses, gasoline road toll, or any other special charges or taxes with respect to the
operation of motor vehicles or the sale or consumption of motor vehicle fuels are appropriated
and used exclusively for the construction, reconstruction, and maintenance of public highways
within this state, including the supervision of traffic thereon and for the payment of the interest
and principal of bonds issued for highway purposes. All such revenues, together with federal
grants-in-aid and federal emergency funds received by the State for highway purposes, are
credited to the Highway Fund. While the principal and interest on state highway bonds are
charged to the Highway Fund, the assets of this fund are not pledged to such bonds.
Education Trust Fund: The Education Trust Fund was established to distribute adequate
education grants to municipalities’ school districts and to approved charter schools pursuant to
RSA 198:42, to provide low and moderate income homeowners property tax relief under RSA
198:56-198:61, and to fund kindergarten programs as may be determined by the general court.
Funding for the grants comes from a variety of sources including the statewide property and
utility taxes, incremental portions of existing business, real estate transfer and tobacco taxes,
lottery funds and tobacco settlement funds.
C-17
NEW HAMPSHIRE l 33
STATE OF NEW HAMPSHIRE
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2021
(Expressed in Thousands)
Non-Major Total
Coronavirus Governmental Governmental
General Relief Highway Education Funds Funds
ASSETS
Cash and Cash Equivalents $ 1,191,335 $ 66,660 $ 170,004 $ 48,789 $ 9,462 $ 1,486,250
Investments 563,738 58,780 622,518
Receivables (Net of Allowances for 810,512 43,350 151,085 4,165 1,009,112
Uncollectibles)
Due from Other Funds 49,936 1,151 2,117 3,432 56,636
Other Assets 8,482 8,482
Inventories 39,275 21,961 706 61,942
Loan Receivables 29,695 29,695
Total Assets $ 2,692,973 $ 66,660 $ 236,466 $ 201,991 $ 76,545 $ 3,274,635
LIABILITIES
Accounts Payable 368,273 29,767 5,359 6,743 410,142
Accrued Payroll 49,689 10,446 1,112 61,247
Due to Other Funds 1,504 2 28,467 29,973
Unearned Revenue 806,028 66,660 2,097 874,785
Unclaimed Property 21,457 21,457
Tax Refunds Payable 5,702 3,163 8,865
Other Liabilities 396 8,000 8,396
Total Liabilities 1,253,049 66,660 50,312 8,522 36,322 1,414,865
DEFERRED INFLOWS OF RESOURCES 199,656 1,306 116,415 317,377
FUND BALANCES
Nonspendable:
Inventories 39,275 21,961 706 61,942
Permanent Fund Principal 12,660 12,660
Restricted 666,369 136,887 39,942 843,198
Committed 35,409 4,450 39,859
Assigned 241,416 26,000 77,054 9,446 353,916
Unassigned:
Revenue Stabilization 257,799 257,799
Other (26,981) (26,981)
Total Fund Balances 1,240,268 184,848 77,054 40,223 1,542,393
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances $ 2,692,973 $ 66,660 $ 236,466 $ 201,991 $ 76,545 $ 3,274,635
C-18
The notes to the basic financial statements are an integral part of this statement
34 • NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
RECONCILIATION OF THE BALANCE SHEET-
GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
(Expressed in Thousands)
Total Fund Balances for Governmental Funds $ 1,542,393
Amounts reported for governmental activities in the Statement of Net
Position are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds. 3,340,759
Revenues that will be collected after year-end and are not available to
pay for the current period's expenditures are reported as deferred
inflows of resources in the funds. 317,377
Revenues that will be collected after year-end and are not available 443
Internal service funds are used by management to charge the costs of
certain activities, such as risk management and health-related fringe
benefits, to individual funds. The assets and liabilities of the internal
service fund are included in governmental activities in the Statement
of Net Position. 56,546
Net deferred outflows of resources related to deferred losses on
refunding of bonds payable are not reported in the funds. 8,631
Certain liabilities are not payable by current available resources and
therefore are not reported in the funds:
Compensated Absences, Workers' Compensation (125,870)
Net Pension Liability, net of Deferred Amounts (904,137)
Other Postemployment Benefits Payable, net of Deferred Amounts (2,242,166)
Pollution Remediation Obligation (78,691)
Capital Lease Obligations (16,900)
Bonds and Notes Payable (1,013,081)
Federal Highway Administrative Liability (19,846)
Interest Payable and Other Liabilities (6,842) (4,407,533)
Net Position of Governmental Activities $ 858,616
C-19
The notes to the basic financial statements are an integral part of this statement
NEW HAMPSHIRE l 35
STATE OF NEW HAMPSHIRE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Non-Major Total
Coronavirus Governmental Governmental
General Relief Highway Education Funds * Funds
REVENUES
General Property Taxes $ 291 $ 401,267 $ 401,558
Special Taxes 1,526,100 450,224 1,976,324
Personal Taxes 153,050 99,375 252,425
Business License Taxes 27,316 170,992 198,308
Non-Business License Taxes 146,940 91,869 12,014 250,823
Fees 139,192 34,104 10,327 183,623
Fines, Penalties and Interest 12,273 4,475 215 16,963
Federal Government 2,676,888 690,254 173,651 40,951 3,581,744
Private and Local Sources 156,949 7,426 604 164,979
Rents and Leases 1,448 14 1,462
Interest, Premiums and Discounts 20,091 792 573 21,456
Sale of Commodities 15,929 2,309 357 18,595
Sale of Service 26,443 3,833 30,276
Assessments 59,845 59,845
Other Agencies 73,628 10,535 683 84,846
Miscellaneous 271,049 4,080 40,001 41,061 356,191
Total Revenues 5,307,432 690,254 503,288 991,659 106,785 7,599,418
EXPENDITURES
Current:
General Government 479,280 364,148 1,206 27,117 871,751
Administration of Justice and Public Protection 493,598 61,211 83,433 638,242
Resource Protection and Development 155,258 4,693 1,872 23,516 185,339
Transportation 34,219 11,042 321,228 366,489
Health and Social Services 3,375,573 143,144 511 3,519,228
Education 431,195 56,016 1,124,503 1,611,714
Debt Service 96,225 33,650 241 130,116
Capital Outlay 34,016 107,964 69,867 211,847
Total Expenditures 5,099,364 640,254 548,147 1,125,709 121,252 7,534,726
Excess (Deficiency) of Revenues
Over (Under) Expenditures 208,068 50,000 (44,859) (134,050) (14,467) 64,692
OTHER FINANCING SOURCES (USES)
Transfers In 10,961 43,247 1,639 55,847
Transfers in from Enterprise Funds 205,548 144,237 349,785
Transfers Out (44,886) (50,000) (3,275) (1,173) (6,513) (105,847)
Capital Lease Acquisition 2,527 2,527
Payments to Refunding Agent (97,868) (97,868)
Bond Premiums 25,839 25,839
Bond and Note Issuance 21,321 133,533 154,854
Total Other Financing Sources 174,150 (50,000) 61,293 143,064 56,630 385,137
Net Change in Fund Balances 382,218 16,434 9,014 42,163 449,829
Fund Balances (Deficits)- July 1, as restated 846,168 165,326 68,040 (1,638) 1,077,896
(Note 1.U) *
Change in Inventory 11,882 3,088 (302) 14,668
Fund Balances - June 30 $ 1,240,268 $ 184,848 $ 77,054 $ 40,223 $ 1,542,393
C-20
The notes to the basic financial statements are an integral part of this statement
36 • NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Net Change in Fund Balances for Total Governmental Funds, including Change in Inventory $ 464,497
Amounts reported for governmental activities in the Statement of Activities are different because:
Revenue recognized on the Statement of Activities that do not provide current financial 102,415
resources on the fund statements resulted in a net decrease from prior year
Governmental funds report capital outlay as expenditures. However, in the Statement of
Activities, the cost of those assets is allocated over their estimated useful lives as depreciation
expense. This is the amount by which capital outlays exceeded depreciation in the current
period.
Land & Land Improvements 16,242
Buildings & Building Improvements 39,932
Equipment & Computer Software 33,532
Construction in Progress (109,945)
Infrastructure 168,556
Accumulated Depreciation, Net of Disposals (132,732) 15,585
Internal service funds are used by management to charge the costs of certain activities, such as
risk management and health-related fringe benefits, to individual funds. The net revenue of the (9,672)
internal service fund is reported with governmental activities.
Proceeds of bonds and notes provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond
and note principal is an expenditure in the governmental funds, but the repayment reduces
long-term liabilities in the Statement of Net Position. This is the amount by which repayments
exceeded proceeds.
Note Proceeds Received (21,321)
Bond Proceeds and Premiums Received (159,372)
Repayment of Bond/Note Principal & Interest 189,323
Amortization of Premiums 14,575
Unamortized Loss on Refunding, net (1,651)
Accrued Interest 1,729 23,283
Some expenses reported in the Statement of Activities do not require the use of current financial
resources and therefore are not reported as expenditures in the governmental funds. These
amounts represent changes in:
Compensated Absences, Workers’ Compensation (546)
Other Postemployment Benefits Payable, net of Deferred Amounts 50,497
Net Pension Liability, net of Deferred Amounts (77,493)
Pollution Remediation Obligation (6,231)
Capital Lease Obligation 25
Federal Highway Administrative Liability (19,846) (53,594)
Change in Net Position of Governmental Activities $ 542,514
C-21
The notes to the basic financial statements are an integral part of this statement
NEW HAMPSHIRE l 37
Proprietary Fund Financial Statements
Enterprise Funds
Turnpike System: The Turnpike System presently consists of 89 miles of limited access
highway, 36 miles of which are part of the U.S. Interstate Highway System. The Turnpike
System comprises a total of approximately 658 total lane miles, 172 bridges, 49 interchanges,
84 toll lanes, and 25 facilities. Since beginning operations in 1950, the Turnpike System has
contributed to the development of the New Hampshire economy. It has also been a major
factor in the growth of the tourist industry in the State. The Turnpike System consists of three
limited access highways: the Blue Star Turnpike (I-95) and the Spaulding Turnpike, (which are
collectively referred to as the Eastern Turnpike), and the Central Turnpike. The Turnpike
System primarily serves the major cities located in the central and eastern sections of southern
New Hampshire.
Liquor Commission: By statute, all liquor and beer sold in the State must be sold through
a sales and distribution system operated by the State Liquor Commission, under the executive
direction of the Liquor Commissioner appointed by the Governor with the consent of the
Executive Council. The Commission makes all liquor purchases directly from the
manufacturers and importers and operates State liquor stores in cities and towns that accept the
provisions of the local option law. The Commission is authorized to sell liquor through retail
outlets as well as directly to restaurants, hotels, and other organizations. The Commission also
charges permit and license fees for the sale of beverages through private distributors and
retailers and an additional fee of 30 cents per gallon on beverages sold by such retailers. Any
excess funds of the Commission are transferred to the General Fund on a daily basis.
Lottery Commission: The State sells lottery games online and through some 1,282 agents,
including state liquor stores, licensed racetracks, and private retail outlets. Through the sale of
lottery tickets, revenue is generated for prize payments and commission expenses, with the net
income used for aid to education. Additionally, the Racing and Charitable Gaming activities
are included in this fund. This net income is transferred to the Education Trust Fund and then
transferred to the local school districts.
State Revolving Fund: These funds consist of New Hampshire Clean Water and Drinking
Water Revolving Funds. Programs operated within these funds provide loans to public water
systems and local governments for constructing wastewater treatment facilities and safe
drinking water systems. In addition, the programs provide supervision and technical assistance
to these grantees. Funding is from U.S. Environmental Protection Agency grants and a General
Fund match. The funds are repaid with interest, then re-loaned.
New Hampshire Unemployment Compensation Trust Fund: This fund receives
contributions from employers and provides benefits to eligible unemployed workers, consistent
with legislation and regulations which govern federal credit programs.
Internal Service Fund: The employee benefit risk management fund reports the health-
related fringe benefit services for the State. The fund was created to account for the State’s self-
insurance program and to pool all resources to pay for the cost associated with providing these
benefits to active employees and retirees.
C-22
38 l NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2021
(Expressed in Thousands)
Business-Type Activities - Enterprise Funds Governmental
State Activities
Turnpike Liquor Lottery Revolving Unemployment Internal
ASSETS System Commission Commission Fund Compensation Total Service Fund
Current Assets:
Cash and Cash Equivalents $120,190 $3,104 $20 $123,314 $65,272
Cash and Cash Equivalents-Restricted 22,378 $ 144,115 $ 165,534 332,027
Investments - Restricted 44,758 54,763 99,521
Receivables (Net of Allowances for Uncollectibles) 19,922 7,315 6,175 33,412 15,311
Other Receivables-Restricted (Net of Allowance for
Doubtful Accounts) 67 27,731 66,965 94,763
Due from Other Funds 1,649 80 400 2,129
Inventories 2,641 81,295 1,502 85,438
Other Current Assets 82 59 141
Other Current Assets-Restricted 4,315 4,315
Total Current Assets 211,687 91,794 8,156 230,924 232,499 775,060 80,583
Noncurrent Assets:
Investments - Restricted 51,148 51,148
Other Receivables-Restricted 100 475,698 475,798
Capital Assets:
Land & Land Improvements 104,072 2,760 106,832
Buildings & Building Improvements 18,087 51,040 2,999 72,126
Equipment & Computer Software 58,954 28,137 820 87,911
Construction in Progress 46,697 406 47,103
Infrastructure 1,176,111 1,176,111
Less: Allowance for Depreciation & Amortization (476,190) (27,344) (833) (504,367)
Net Capital Assets 927,731 54,999 2,986 985,716
Other Assets - Restricted 4,568 4,568
Total Noncurrent Assets 927,831 54,999 7,554 526,846 1,517,230
Total Assets 1,139,518 146,793 15,710 757,770 232,499 2,292,290 80,583
DEFERRED OUTFLOWS OF RESOURCES 9,252 16,925 3,777 4,701 34,655
LIABILITIES
Current Liabilities:
Accounts Payable 9,703 77,276 4,565 1,038 92,582 77
Accrued Payroll 848 2,464 479 456 4,247
Due to Other Funds 9,150 9,512 2,117 8,013 28,792
Unearned Revenue 15,527 1,001 765 17,293
Unclaimed Prizes 2,987 2,987
General Obligation Bonds Payable 3,460 2,072 5,532
Revenue Bonds Payable-Current 26,285 26,285
Accrued Interest Payable 3,563 141 3,704
Claims & Compensated Absences Payable 762 1,150 72 167 2,151 23,960
Other Liabilities 269 115 11 21,888 22,283
Total Current Liabilities 66,107 95,004 11,100 3,744 29,901 205,856 24,037
Noncurrent Liabilities:
General Obligation Bonds Payable 33,634 7,083 40,717
Revenue Bonds Payable 263,925 263,925
Claims & Compensated Absences Payable 2,382 4,789 627 941 8,739
Other Postemployment Benefits Payable 29,651 58,332 14,256 7,605 109,844
Net Pension Liabilities 13,490 30,995 5,404 7,558 57,447
Other Noncurrent Liabilities 4,083 2,589 6,672
Total Noncurrent Liabilities 313,531 127,750 22,876 23,187 487,344
Total Liabilities 379,638 222,754 33,976 26,931 29,901 693,200 24,037
DEFERRED INFLOWS OF RESOURCES 10,619 18,843 5,203 2,078 36,743
NET POSITION
Net Investment in Capital Assets 643,404 14,473 283 658,160
Restricted for Debt Repayments 54,496 54,496
Restricted for Loan Receivable 167 167
Restricted for Uninsured Risks 4,014 4,014
Restricted for Prize Awards - MUSL & Tri-State 4,568 4,568
Restricted for Environmental Loans 724,108 724,108
Restricted for SRF Programs 9,354 9,354
Restricted for Facility Sustainment 705 705
Restricted for Unemployment Benefits 202,598 202,598
Restricted for Employee Benefits 56,546
Unrestricted Net Position (Deficit) 55,727 (92,352) (24,543) (61,168)
Total Net Position (Deficit) $ 758,513 $ (77,879) $ (19,692) $ 733,462 $ 202,598 $ 1,597,002 $ 56,546
C-23
The notes to the basic financial statements are an integral part of this statement
NEW HAMPSHIRE l 39
STATE OF NEW HAMPSHIRE
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousand)
Business-Type Activities - Enterprise Funds
Governmental
State Activities
Turnpike Liquor Lottery Revolving Unemployment Internal
System Commission Commission Fund Compensation Total Service Fund
OPERATING REVENUES
Charges for Sales and Services $ 786,397 $ 519,034 $ 10,027 $ 157,368 $1,472,826 $ 295,229
Toll Revenue Pledged for Repaying $ 122,136 122,136
Revenue Bonds
Total Operating Revenue 122,136 786,397 519,034 10,027 157,368 1,594,962 295,229
OPERATING EXPENSES
Cost of Sales and Services 555,592 52,791 608,383
Lottery Prize Awards 310,919 310,919
Unemployment Insurance Benefits 972,371 972,371
Principal Forgiveness 9,086 9,086
Insurance Claims 297,041
Administration 58,349 64,867 10,712 10,137 144,065 8,633
Depreciation 29,259 2,881 101 32,241
Total Operating Expenses 87,608 623,340 374,523 19,223 972,371 2,077,065 305,674
Operating Income (Loss) 34,528 163,057 144,511 (9,196) (815,003) (482,103) (10,445)
NONOPERATING REVENUES
(EXPENSES)
Licenses 5,273 5,273
Beer Taxes 13,701 13,701
Investment Income 734 572 2,680 3,986 773
Miscellaneous 3,576 2,056 4,522 10,154
Federal Revenue Grants & 22,283 925,807 948,090
Subsidies
Interest on Bonds and Mortgages (11,498) (1,636) (123) (430) (13,687)
Total Nonoperating Revenues (7,188) 19,394 (123) 26,947 928,487 967,517 773
(Expenses)
Income (Loss) Before Capital Grant 27,340 182,451 144,388 17,751 113,484 485,414 (9,672)
Contributions
Capital Contributions and Grants 27 27
Income (Loss) Before Transfers 27,367 182,451 144,388 17,751 113,484 485,441 (9,672)
Transfers From (To) Governmental (182,451) (144,237) 26,903 (299,785)
Funds, net
Change in Net Position 27,367 151 17,751 140,387 185,656 (9,672)
Net Position (Deficit)- July 1 731,146 (77,879) (19,843) 715,711 62,211 1,411,346 66,218
Net Position (Deficit) - June 30 $ 758,513 $ (77,879) $ (19,692) $ 733,462 $ 202,598 $1,597,002 $ 56,546
C-24
The notes to the basic financial statements are an integral part of this statement
40 l NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Business-Type Activities - Enterprise Funds Governmental
State Activities
Turnpike Liquor Lottery Revolving Unemployment Internal
System Commission Commission Fund Compensation Total Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Federal and Local Agencies $ 8,422 $ 1,254 $ 9,676
Receipts from Customers $ 124,456 $ 785,231 $ 248,319 143,855 1,301,861 $ 74,559
Receipts from Borrowers 82,707 82,707
Interest from Borrowers 2,607 2,607
Receipts from Supplier Rebate 80,335 80,335
Receipts from Interfund Charges 219,005
Payments to Borrowers (66,214) (66,214)
Payments to Employees (14,374) (32,290) (5,924) (52,588)
Payments to Suppliers (34,792) (639,378) (23,251) (6,328) (703,749) (8,713)
Payments to Prize Winners (74,902) (74,902)
Payments for Assistance Programs (2,064) (2,064)
Payments for Insurance Claims (1,049,568) (1,049,568) (292,856)
Payments for Interfund Services (8,391) (839) (9,230)
Net Cash Provided by (Used for) Operating 75,290 185,507 144,242 18,291 (904,459) (481,129) (8,005)
Activities
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES
Transfers (to) from Other Funds, net (160,603) (144,046) 20,753 (283,896)
Receipts from Federal Agencies 21,896 1,016,893 1,038,789
Municipal/State Contributions 507 4,522 5,029
Temporary Loan from Other State Funds (17,645) (17,645)
Interest Paid on Bonds (430) (430)
Principal Paid on Bonds (2,072) (2,072)
Transfer to Alcohol Abuse Prevention and (10,024) (10,024)
Treatment Fund
Transfer to Granite Advantage Health Care (8,500) (8,500)
Fund
Proceeds from Collection of Licenses and Beer 18,974 18,974
Tax
Other Fees/Fines 987 3,036 4,023
Net Cash Provided by (Used for) Noncapital 1,494 (174,762) (144,046) 23,916 1,037,646 744,248
and Related Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition, Disposal, Sale and Construction of (28,308) (4,498) (104) (32,910)
Capital Assets
Interest Paid on Bonds and Mortgages (14,509) (1,647) (94) (16,250)
Principal Paid on Bonds and Mortgages (24,145) (3,078) (111) (27,334)
Net Proceeds from Issuance of Bonds and 1,582 1,582
Mortgages
Payments for Underwriter Discount/Premium 2,914 2,914
Payments to Others (51) (51)
Net Cash Provided by (Used for) Capital and (64,099) (7,641) (309) (72,049)
Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Investment Proceeds 70,497 25,193 95,690 774
Purchase of Investment (70,762) (70,762)
Other Income 648 (29) 125 2,680 3,424
Net Cash Provided by (Used for) Investing 383 (29) 25,318 2,680 28,352 774
Activities
Net Increase in Cash & Cash Equivalents 13,068 3,104 (142) 67,525 135,867 219,422 (7,231)
Cash and Cash Equivalents - July 1 129,500 162 76,590 29,667 235,919 72,503
Cash and Cash Equivalents - June 30 $ 142,568 $ 3,104 $ 20 $ 144,115 $ 165,534 $ 455,341 $ 65,272
C-25
The notes to the basic financial statements are an integral part of this statement
NEW HAMPSHIRE l 41
STATE OF NEW HAMPSHIRE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED June 30, 2021
(Expressed in Thousands)
Business-Type Activities - Enterprise Funds
Governmental
State Activities
Turnpike Liquor Lottery Revolving Unemployment Internal
System Commission Commission Fund Compensation Total Service Fund
Reconciliation of Operating Income (Loss) to
Net
Cash Provided by (Used for) Operating
Activities:
Operating Income (Loss) $ 34,528 $ 163,057 $ 144,511 $ (9,196) $ (815,003) $(482,103) $ (10,445)
Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided by (Used for)
Operating Activities:
Depreciation 29,259 2,881 101 32,241
Principal Repayments 82,707 82,707
Loan Advances to Borrowers (66,214) (66,214)
Principal Forgiveness 9,086 9,086
Interest Income on Loans (8) (8)
Miscellaneous Income/(Expense) 189 617 806
Change in Receivables/Loans 345 (1,395) (2,952) 1,018 (12,259) (15,243) (1,664)
Change in Inventories 214 7,551 66 7,831
Change in Other Current Assets (47) (47) 1,109
Change in Restricted Deposits-MUSL (151) (151)
Change in Accounts Payable and Other 10,800 13,457 1,145 (344) (77,197) (52,139) (81)
Accruals
Change in Claims Payable 2,225 (157) 2,068 3,076
Change in Unearned Revenue 434 229 (228) 435
Change in Other Postemployment Benefits 2,789 (2,503) (754) 782 314
Payable, Net of Deferred Amounts
Change in Net Pension Liability, Net of (3,268) 2,230 326 (712)
Deferred Amounts
Net Cash Provided by (Used For) Operating $ 75,290 $ 185,507 $ 144,242 $ 18,291 $ (904,459) $(481,129) $ (8,005)
Activities
Turnpike Non-Cash Capital and Related
Financing Activities:
Capital Contributions $ 27
Non-Cash Capital Acquisition $ (2,326)
SRF Non-Cash Investing Activities:
Principal Forgiveness $ 9,086
C-26
The notes to the basic financial statements are an integral part of this statement
42 l NEW HAMPSHIRE
Fiduciary Funds Financial Statements
Pension Trust Funds:
New Hampshire Retirement System - The New Hampshire Retirement System
(NHRS) is the administrator of a cost-sharing multiple employer contributory pension plan
and trust established on July 1, 1967 and is intended to meet the requirements of a qualified
tax-exempt organization within the meaning of section 401(a) and section 501(a) of the
United States Internal Revenue Code. Participating employers include the employees of the
State government of New Hampshire, certain cities and towns, all counties, and various
school districts. NHRS is a component unit of the State.
New Hampshire Judicial Retirement Plan - The New Hampshire Judicial
Retirement Plan (NHJRP) was established on January 1, 2005 and is a contributory
pension plan and trust intended to meet the requirements of a qualified pension trust within
the meaning of section 401(a) and to qualify as a governmental plan within the meaning of
section 414(d) of the United States Internal Revenue Code. The Plan is a component unit of
the State.
Private Purpose Trust Funds: Private-Purpose Trust Funds report resources of all other
trust arrangements in which principal and income benefit individuals, private organizations, or
other governments.
Investment Trust Fund: The investment trust fund represents the external portion of the
New Hampshire Public Deposit Investment Pool (NHPDIP). The NHPDIP has been
established, in accordance with RSA 383:22-24, for the purpose of investing funds of the State
of New Hampshire, funds under the custody of all governmental units, pooled risk management
programs established pursuant to RSA 5-B, agencies, authorities, commissions, boards, political
subdivisions, and all other public units within, or instrumentalities of the State of New
Hampshire. In accordance with GAAP, the external portion of the NHPDIP is reported as an
investment trust fund in the Fiduciary Funds using the economic resources measurement focus
and accrual basis of accounting. The internal portion of the pool is reported in the General
Fund and trust funds. NHPDIP’s investment detail and audited financial statements can be
obtained by visiting www.nhpdip.com or contacting the Client Services Team at 1-844-4NH-
PDIP.
Custodial Funds: Custodial funds are used to report fiduciary activities that are not
required to be reported in pension (and other employee benefit) trust funds, investment trust
funds, or private-purpose trust funds.
C-27
NEW HAMPSHIRE l 43
STATE OF NEW HAMPSHIRE
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2021
(Expressed in Thousands)
Private
Pension Trust Purpose Trust Investment Custodial
Funds Funds Trust Fund Funds
ASSETS
Cash and Cash Equivalents $ 299,922 $ 3,236 $ 136 $ 61,155
Receivables:
Due from Employers 50,782
Due from Plan Members 22,292
Due from Brokers for Securities Sold 10,744
Interest and Dividends 11,639 177
Other 7,253
Total Receivables 102,710 177
Investments:
Certificates of Deposit 93,024
Repurchase Agreements 24,731
U.S. Government Obligations 36,290
Equity Investments 5,710,647
Fixed Income Investments 2,217,742
Commercial Real Estate 1,129,863
Commercial Paper 56,699
Alternative Investments 2,218,340
Other Investments 15,789 3,141 283
Total Investments 11,276,592 15,789 213,885 283
Other Assets 4,528
Total Assets 11,683,752 19,025 214,198 61,438
LIABILITIES
Management Fees and Other Payables 11,489 60
Due to Brokers for Securities Purchased 25,597
Total Liabilities 37,086 60
NET POSITION
Restricted for:
Employees' Pension Benefits 11,596,871
Other Postemployment Benefits (OPEB) 49,795
External Investment Pool 214,138
Individuals, organizations, and other governments 19,025 61,438
Total Net Position $ 11,646,666 $ 19,025 $ 214,138 $ 61,438
C-28
The notes to the basic financial statements are an integral part of this statement.
44 l NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Private
Pension Trust Purpose Trust Investment Custodial
Funds Funds * Trust Fund Funds *
ADDITIONS
Contributions:
Employers $ 513,984
Plan Members 237,709
Participants 19,035 263,720
Total Contributions 751,693 19,035 263,720
Investment Income:
From Investing Activities:
Net Depreciation in Fair Value of Investments 2,502,098
Interest Income 43,422 180 630 4
Dividends 72,917
Alternative Investment Income 47,249
Other 24,444 1,033 2
Gross Income from Investing Activities 2,690,130 1,213 632 4
Less Investment Activity Expenses:
Investment Management Fees 51,281 466
Custodial Fees 711
Investment Administrative Expense 688
Investment Advisor Fees 700
Investment Professional Fees 438
Total Investment Activity Expenses 53,818 466
Total Net Income from Investing Activities 2,636,312 1,213 166 4
Federal Revenue 56,104
Other 98,104
Total Additions 3,388,005 20,248 263,886 154,212
DEDUCTIONS
Benefits/Distributions to Participants 911,094 9,024 12,524
Refunds of Contributions 19,896
Administrative Expense 8,817
Professional Fees 548
Other 245 1,116 283,503 85,982
Total Deductions 940,600 10,140 283,503 98,506
Change in Net Position 2,447,405 10,108 (19,617) 55,706
NET POSITION HELD IN TRUST FOR BENEFITS & OTHER PURPOSES
Net Position - July 1, as restated (Note 1.U)* 9,199,261 8,917 233,755 5,732
Net Position - June 30 $ 11,646,666 $ 19,025 $ 214,138 $ 61,438
C-29
The notes to the basic financial statements are an integral part of this statement.
NEW HAMPSHIRE l 45
Component Units Financial Statements
C-30
46 l NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
COMBINING STATEMENT OF NET POSITION
COMPONENT UNITS
JUNE 30, 2021
(Expressed in Thousands)
University System Non-Major Total
of New Hampshire Component Units
ASSETS
Current Assets:
Cash and Cash Equivalents $ 85,670 $ 53,753 $ 139,423
Cash and Cash Equivalents - Restricted 17,880 17,880
Operating Investments 130,477 9,264 139,741
Accounts Receivable 27,037 13,640 40,677
Other Receivables 2,549 16,335 18,884
Notes Receivable - Current Portion 1,742 3,087 4,829
Prepaid Expenses & Other 9,903 622 10,525
Total Current Assets 257,378 114,581 371,959
Noncurrent Assets:
Investments 1,001,247 35,116 1,036,363
Notes & Other Receivables 15,454 11,520 26,974
Other Assets 1,557 41,157 42,714
Capital Assets:
Land & Land Improvements 15,256 15,256
Building & Building Improvements 1,900,245 200,918 2,101,163
Equipment 160,656 480 161,136
Construction in Progress 60,264 60,264
Less: Accumulated Depreciation (1,034,981) (216) (1,035,197)
Net Capital Assets 1,101,440 201,182 1,302,622
Total Noncurrent Assets 2,119,698 288,975 2,408,673
Total Assets 2,377,076 403,556 2,780,632
DEFERRED OUTFLOWS OF RESOURCES 46,463 38,688 85,151
LIABILITIES
Current Liabilities:
Accounts Payable 81,510 14,762 96,272
Accrued Salaries and Wages 5,892 5,892
Accrued Employee Benefits - Current 37,462 51 37,513
Other Payables & Accrued Expenses 7,016 7,016
Other Liabilities 5,342 5,342
Deposits and Unearned Revenues 56,012 5,572 61,584
Long Term Debt - Current Portion 30,675 1,377 32,052
Total Current Liabilities 211,001 34,670 245,671
Noncurrent Liabilities:
Revenue Bonds Payable 381,003 381,003
Accrued Employee Benefits 33,926 33,926
Other Postemployment Medical Benefits Payable 80,797 119,846 200,643
Derivative Instruments - Interest Rate Swaps 22,280 22,280
Net Pension Liability 74,546 74,546
Other Long Term Debt 24,562 56,991 81,553
Total Noncurrent Liabilities 542,568 251,383 793,951
Total Liabilities 753,569 286,053 1,039,622
DEFERRED INFLOWS OF RESOURCES 11,346 40,512 51,858
NET POSITION
Net Investment in Capital Assets 722,339 185,111 907,450
Restricted:
Nonexpendable 306,566 306,566
Expendable 299,440 60,132 359,572
Unrestricted Net Position (Deficit) 330,279 (129,564) 200,715
Total Net Position $ 1,658,624 $ 115,679 $ 1,774,303
C-31
NEW HAMPSHIRE l 47
STATE OF NEW HAMPSHIRE
COMBINING STATEMENT OF ACTIVITIES
COMPONENT UNITS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
University System Non-Major
of New Hampshire Component Units Total
EXPENSES $ 912,227 $ 158,420 $ 1,070,647
PROGRAM REVENUES:
Charges for Services:
Tuition & Fees 508,057 54,764 562,821
Student Financial Aid (207,222) (26,073) (233,295)
Sales, Services, & Other Revenue 188,681 27,532 216,213
Operating Grants & Contributions 386,279 72,475 458,754
Capital Grants & Contributions 64,568 3,653 68,221
Total Program Revenues 940,363 132,351 1,072,714
Net Expenses 28,136 (26,069) 2,067
Interest & Investment Income 40,082 8,658 48,740
Payments from State of New Hampshire 93,062 55,360 148,422
Change in Net Position 161,280 37,949 199,229
Net Position - July 1 1,497,344 77,730 1,575,074
Net Position - June 30 $ 1,658,624 $ 115,679 $ 1,774,303
C-32
48 l NEW HAMPSHIRE
Notes to the Basic Financial Statements
1. Summary of Significant Accounting Policies
A. Reporting Entity 49
B. Government-Wide and Fund Financial Statements 50
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation 51
D. Cash Equivalents 52
E. Investments 52
F. Receivables 53
G. Inventories 53
H. Capital Assets 53
I. Unearned Revenue 53
J. Accounts Payable 54
K. Compensated Absences 54
L. Deferred Outflows of Resources and Deferred Inflows of Resources 54
M. Postemployment Liabilities 54
N. Fund Balances 54
O. Bond Discounts and Premiums 54
P. Revenues and Expenditures/Expenses 54
Q. Interfund Activity and Balances 55
R. Encumbrances and Capital Projects 55
S. Budget Control and Reporting 55
T. Use of Estimates 56
U. Adoption of New Accounting Pronouncements 56
2. Cash, Cash Equivalents, and Investments 57
3. Receivables and Other Receivables-Restricted 67
4. Capital Assets 68
5. Long-Term Debt 69
6. Deferred Outflows of Resources and Deferred Inflows of Resources 73
7. Risk Management and Insurance 74
8. Interfund Receivables and Payables 75
9. Interfund Transfers 76
10. Contractual Commitments 76
11. Employee Benefit Plans 77
12. Contingent and Limited Liabilities 89
13. Lease Commitments 90
14. Tax Abatements 91
15. Litigation and Other Matters 92
16. Governmental Fund Balances and Stabilization Account 98
17. Joint Ventures-Lottery Commission 98
18. Subsequent Events 99
C-33
NEW HAMPSHIRE l 49
NOTES TO THE BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the State of New Hampshire (the State) have been prepared in accordance with accounting principles
generally accepted in the United States of America (U.S. GAAP) and as prescribed by the Governmental Accounting Standards Board (GASB),
which is the standard-setting body for establishing governmental accounting and financial reporting principles.
A. REPORTING ENTITY
For financial reporting purposes, the State’s reporting entity includes all funds, organizations, agencies, boards, commissions, authorities and all
component units for which the State is financially accountable. There are no other organizations for which the nature and significance of their
relationship with the State are such that exclusion would cause the State’s financial statements to be misleading. The criteria to be considered in
determining financial accountability include whether the State, as the primary government, has appointed a voting majority of an organization’s
governing body and (1) has the ability to impose its will on that organization or (2) there is potential for the organization to provide specific
financial benefits to or impose specific financial burdens on the State. Financial accountability also exists if an organization is determined to be
fiscally dependent on the primary government and the primary government is in a relationship of financial benefit/burden with the organization.
Component units are either blended into the primary government or discretely presented from the primary government. Potential component units
that do not meet the financial accountability criteria, but where a voting majority of the governing board is appointed by the State, are deemed to
be related organizations. The nature and relationship of the State’s component units and related organizations are disclosed in the following
section.
Discrete Component Units:
Discrete component units are entities, which are legally separate from the State, but for which the State is financially accountable for financial
reporting purposes, or whose relationship with the State is such that exclusion would cause the State’s financial statements to be misleading.
Complete audited financial statements of the individual component units can be obtained from the respective entities.
The component unit columns of the government-wide financial statements include the financial data of the following entities:
Major Component Unit
University System of New Hampshire - The University System of New Hampshire (USNH) is a body corporate and politic with a governing
board of twenty-seven members. A voting majority is held by the State through the eleven members appointed by the Governor and Executive
Council and three State officials serving as required by law. These State officials are the Governor, the Commissioner of the Department of
Education, and the Commissioner of the Department of Agriculture. The remaining board members represent the university and colleges of the
system, the alumni, and the student body. The USNH funds its operations through tuition and fees, government grants and contracts, auxiliary
operations, and State appropriations which impose a specific financial burden on the State. USNH financials can be obtained by contacting USNH
at 5 Chenell Drive Suite 301, Concord, NH 03301.
Non-major Component Units
Business Finance Authority of the State of New Hampshire - The Business Finance Authority (BFA) is a body corporate and politic with a
governing board of fourteen members. The board consists of nine members appointed by the Governor with the consent of the Executive Council.
The remaining members include two State Representatives, two Senators, and the State Treasurer. The State currently guarantees outstanding loans
and principal on bonds of the BFA, which creates the potential for the BFA to impose a financial burden on the State. BFA’s financials can be
obtained by contacting the BFA at 2 Pillsbury Street, Suite 201, Concord, NH 03301.
Community Development Finance Authority - The Community Development Finance Authority (CDFA) is a body corporate and politic
organized as a nonprofit corporation under Revised Statutes Annotated (RSA) 292. The governing board of eleven members is made up of the
Commissioner of the Department of Resources and Economic Development or designee and ten public members appointed by the Governor and
Executive Council as follows: four representatives of community development corporations or other nonprofit organizations engaged in
community development activities, one representative of organized labor, two representatives of small business and the financial community, one
representative of employment training programs, and two representatives of private financial institutions. Additionally, CDFA imposes a financial
burden on the State as investment tax credit equal to 75 percent of the contribution made to the CDFA during the contributor’s tax year is allowed
against certain taxes imposed by the State. In accordance with RSA 162-L:10, the total credits allowed shall not exceed $5.0 million in any State
fiscal year. CDFA’s financials can be obtained by contacting the CDFA at 14 Dixon Avenue, Suite 102, Concord, NH 03301.
Pease Development Authority - The Pease Development Authority (PDA) is a body corporate and politic with a governing body of seven
members. Four members are appointed by the Governor and State legislative leadership, and three members are appointed by the City of
Portsmouth and the Town of Newington. The State currently guarantees outstanding loans and principal on bonds of the PDA and has issued bonds
on behalf of the PDA, which creates the potential for the PDA to impose a financial burden on the State. In addition, the State has made several
loans to the PDA. PDA’s financials can be obtained by contacting PDA at 55 International Drive, Portsmouth, NH 03801.
C-34
50 l NEW HAMPSHIRE
The Community College System of New Hampshire (CCSNH) - The CCSNH was established under Chapter 361, Laws of 2007 (effective date
July 17, 2007), as a body politic and corporate, whose main purpose is to provide a well-coordinated system of public community college
education. The CCSNH includes colleges in Berlin, Claremont, Concord, Laconia, Manchester, Nashua and Portsmouth. It is governed by a single
board of trustees with 23 voting members appointed by the Governor and Executive Council. The CCSNH funds its operations through tuition,
room and board, fees, grants, legacies and gifts, and state appropriations which impose a specific financial burden on the State.
CCSNH’s financials can be obtained by contacting CCSNH at 26 College Drive, Concord, NH 03301.
Fiduciary Component Units:
The State’s fiduciary component units consist of the Pension Trust Funds, which include the following:
New Hampshire Retirement System - The New Hampshire Retirement System (NHRS) is a contributory pension plan and trust qualified as a tax
exempt organization under Sections 401(a) and 501(a) of the Internal Revenue Code. It is a defined benefit plan (the “Plan”) providing disability,
death, and retirement protection to its members, which include full-time employees of the State and substantially all school teachers, firefighters,
and police officers within the State. Full-time employees of political subdivisions may participate if their governing body elects to participate.
NHRS is administered by a 13 member Board of Trustees on which the State does not represent a voting majority. The Board has all the powers of
a corporation. It is fiduciarily responsible for NHRS assets and directs the investment of those assets through an independent investment
committee, reviews actuarial assumptions and valuations from which the employer contribution rates are certified by the board, and generally
supervises the operations of NHRS.
NHRS is deemed to be fiscally dependent on the State because the employee member contribution rates are set through State statute, and the State
has budget approval authority over some administrative costs of NHRS.
New Hampshire Judicial Retirement Plan – The New Hampshire Judicial Retirement Plan (NHJRP) is a contributory pension plan and trust
qualified as a tax exempt organization under Sections 401(a) and 414(d) of the Internal Revenue Code. It is a defined benefit plan providing
disability, death, and retirement protection for full-time supreme court, superior court, and circuit court judges employed within the State.
NHJRP is administered by a seven member Board of Trustees that is appointed by the State. The Board is fiduciarily responsible for NHJRP assets
and oversees the investment of those assets, approving the actuarial valuation of NHJRP including assumptions, interpreting statutory provisions
and generally supervising the operations of NHJRP.
These component units are presented along with other fiduciary funds of the State and have been omitted from the State’s government-wide
financial statements.
Related Organizations:
The State is responsible for appointing voting members of the governing boards of the following legally separate organizations; however, the State
is not financially accountable for these organizations. Although the Treasurer may serve as a Trustee and have certain involvement with the
organizations, the organizations are not fiscally dependent upon the primary government and the organizations do not provide specific financial
benefit to or impose financial burden on the primary government. Exclusion of these organizations from the State’s financial statements would not
render the financial statements to be misleading.
Related Organizations Excluded:
• Maine – New Hampshire Interstate Bridge Authority
• New Hampshire Health and Education Facilities Authority
• New Hampshire Housing Finance Authority
• New Hampshire Municipal Bond Bank
• Land and Community Heritage Investment Program
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Government-Wide Financial Statements
The Statement of Net Position and Statement of Activities report information on all of the non-fiduciary activities of the primary government and
its component units. For the most part, the effect of interfund activity has been removed from these statements. Primary government activities are
distinguished between governmental and business-type activities. Governmental activities are normally supported through taxes and
intergovernmental revenues. Business-type activities rely, to a significant extent, on fees and charges for support. Likewise, the primary
government is reported separately from the legally separate component units for which the primary government is financially accountable.
The Statement of Net Position presents the reporting entity’s non-fiduciary assets, deferred outflows of resources, liabilities, and deferred inflows
of resources, with the difference reported as net position. Net position from net investment in capital assets includes capital assets net of
accumulated depreciation, and outstanding principal balances of debt attributable to the acquisition, construction or improvement of those assets.
Net position is restricted when constraints are externally imposed or imposed by constitutional provisions or enabling legislation. Internally
imposed designations of resources are not presented as part of restricted net position. The remaining net position is considered unrestricted.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues.
C-35
NEW HAMPSHIRE l 51
Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or
applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not
meeting the definition of program revenues are reported instead as general revenues. Resources that are dedicated internally are reported as general
revenue rather than program revenue. Certain indirect costs are included in program expenses reported for individual functions.
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from
the government-wide financial statements. Major individual governmental funds and major individual proprietary funds are reported as separate
columns in the fund financial statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
Measurement Focus and Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting.
Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Derived tax revenues are recognized as revenues in the period the
underlying transaction occurs. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose the State generally considers
revenues to be available if they are collected within 60 days after year end. Receivables not expected to be collected within 60 days are offset by
deferred inflows of resources. An exception to this policy is federal grant revenue, which generally is considered to be available if collection is
expected within 12 months after year end. Taxes, grants, licenses and fees associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period when available.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures related to debt service and
other long-term obligations including compensated absences, post-employment benefits, pollution remediation obligations and claims and
judgments are recorded only when payment is due.
Proprietary Fund, Fiduciary Funds and Similar Component Units, and Discrete Component Unit financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting, similar to the government-wide statements described above.
Financial Statement Presentation
A fund is a separate accounting entity with a self-balancing set of accounts. Fund accounting is designed to report financial position and the results
of operations, to demonstrate legal compliance, and to aid financial management by segregating transactions related to certain government
functions or activities.
The State reports the following major governmental funds:
General Fund: The General Fund is the State’s primary operating fund and accounts for all financial transactions not accounted for in any other
fund.
Coronavirus Relief Fund: The Coronavirus Relief Fund is used to account for revenues and expenditures related to federal revenue received under
section 601 (a) of the Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).
During fiscal year 2020, the CARES Act established the Coronavirus Relief Fund and the State received an allocation of $1.25 billion.
Highway Fund: The Highway Fund is used to account for the revenues and expenditures used in the construction, maintenance and operations of
the State’s public highways and the supervision of traffic thereon.
Education Trust Fund: The Education Trust Fund was created in accordance with Chapter 17:41, Laws of 1999. The fund is non-lapsing and is
used to distribute adequate education grants to school districts.
The State reports the following major enterprise funds as part of the Proprietary Fund Financial Statements:
The Turnpike System accounts for the revenues and expenses used in the construction, maintenance and operations of three limited access
highways: the Blue Star Turnpike (I-95), the Spaulding Turnpike and the Central Turnpike. The Turnpike System primarily serves the major cities
located in the central and eastern sections of southern New Hampshire.
The Liquor Commission accounts for the operations of State-owned liquor stores and the sales of all beer and liquor sold in the State.
The Lottery Commission accounts for the operations of the State’s Lottery Commission and the State’s Racing & Charitable Gaming activities.
The State Revolving Fund makes loans to public water systems and local governments for wastewater treatment facilities and safe drinking water
systems, funded by programs under the U.S. Environmental Protection Administration.
C-36
52 l NEW HAMPSHIRE
The New Hampshire Unemployment Compensation Trust Fund receives contributions from employers and provides benefits to eligible
unemployed workers.
Additionally, the State reports the following non-major funds:
Governmental Funds
Fish and Game Fund – accounts for the operation of fish hatcheries, inland and marine fisheries and wildlife areas and functions related to
law enforcement, land acquisition and wildlife management and research. Principal revenues include fees from fish and game licenses, the
marine gas tax, penalties, recoveries, federal grants-in-aid related to fish and game management and other funding as approved by the
Legislature.
Capital Projects Fund - used to account for certain capital improvement appropriations which are or will be primarily funded by the issuance
of State bonds or notes, other than bonds and notes for highway or turnpike purposes, or by the application of certain federal matching grants.
Permanent Funds – report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes
that benefit the State or its citizenry.
Proprietary Fund
Internal Service Fund - provides services primarily to employees and retirees of the State, rather than to the general public. These services include
health-related fringe benefits. In the government-wide financial statements, internal service funds are included with governmental activities.
Fiduciary Fund Types
Pension (and Other Employee Benefits) Trust Funds – report resources that are required to be held in trusts for the members and beneficiaries of
the State’s contributory defined benefit plans, and post employment benefit plan. The NHRS and NHJRP are component units of the State.
Investment Trust Fund - accounts for the transactions, assets, liabilities and fund equity of the New Hampshire Public Deposit Investment Pool
(NHPDIP or the Pool), an external investment pool. The NHPDIP was established, in accordance with RSA 383:22-24, for the purpose of
investing funds of the State of New Hampshire, funds under the custody of all governmental units, pooled risk management programs established
pursuant to RSA 5-B, agencies, authorities, commissions, boards, political subdivisions, and all other public units within, or instrumentalities of
the State of New Hampshire. As of June 30, 2021, the State held an investment position in NHPDIP, which is reported as the State’s share of the
overall pool and not by investment type based on the underlying investment securities held by the pool. In accordance with GAAP, the external
portion of the NHPDIP is reported as an investment trust fund in the Fiduciary Funds using the economic resources measurement focus and accrual
basis of accounting. In accordance with GASBS 79, the pool’s portfolio securities are valued at amortized cost, which approximates fair value.
NHPDIP’s investment detail and audited financial statements can be obtained by visiting www.nhpdip.com or contacting the Client Services
Team at 1-844-4NH-PDIP.
Private Purpose Trust Funds - report resources of all other trust arrangements in which principal and income benefit individuals, private
organizations, or other governments.
Custodial Funds - report resources identified as a fiduciary activity which are not held in a trust or equivalent arrangement.
Reporting Periods
The accompanying financial statements of the State are presented as of June 30, 2021, and for the year then ended, except for the New Hampshire
Judicial Retirement Plan which is as of December 31, 2020, and for the year then ended.
D. CASH EQUIVALENTS
For the purposes of reporting in the Statement of Net Position, Statement of Fiduciary Net Position and the Statement of Cash Flows, cash
equivalents represent short-term investments with original maturities less than three months from the date acquired by the State and are valued at
cost, which approximates fair value, or net asset value. Cash equivalents include certain money market and demand deposit accounts, a
government-sponsored enterprise (GSE) instrument, the external portion of the NHPDIP holdings classified as cash equivalents and funds on
deposit with the U.S. Treasury for the Unemployment Compensation Fund.
E. INVESTMENTS
Primary Government
Investments are reported at fair value. In determining fair value, the State utilizes valuation techniques that maximize the use of observable inputs
and minimize the use of unobservable inputs to the extent possible. If an investment is in an active market where quoted prices exist, the market
price of an identical security is used to report fair value. Corporate fixed income securities and certain U.S. government securities utilize pricing
that may involve estimation using similar securities or trade dates. As these investments are generally not traded in an active market, fair value
measurements are determined using market data and matrix pricing. Fair values for shares in registered mutual funds and exchange-traded funds
are based on published share prices. Money market mutual funds are generally reported at net asset value (NAV) reported by the fund managers
and assessed as reasonable by the State, which is used as a practical expedient to estimate the fair value.
Non Pension Fiduciary Funds
In accordance with GASB 79, NHPDIP portfolio securities are valued at amortized cost, which approximates fair value. All other non pension
trust fund investments are reported at fair value.
C-37
NEW HAMPSHIRE l 53
Pension Trust Funds and Major Component Unit
See Note 2 for further discussion of fair value techniques.
F. RECEIVABLES
Receivables in the government-wide financial statements represent amounts due to the State at June 30, recorded as revenue, which will be
collected sometime in the future and consist primarily of accrued taxes and federal grants receivable. In the governmental fund financial
statements, taxes receivable are primarily taxpayer-assessed revenues where the underlying exchange has occurred in the period ending June 30 or
prior, and for federal grants, which reimburse the State for expenditures incurred pursuant to federally funded programs. Tax and grant revenues
are susceptible to accrual in accordance with measurable and available criteria under the modified accrual basis of accounting.
Other Receivables - Restricted includes loans receivable made to public water systems and local governments under the State Revolving Fund
(SRF) for wastewater treatment facilities and safe drinking water systems. Loans are funded by federal grants from programs by the U.S.
Environmental Protection Agency, with federal grants and partially matching state funds. Loan funds are disbursed to borrowers on a cost
reimbursement basis, and interest begins accruing when funds are disbursed. After construction is completed, the borrower can elect to add the
construction period interest to the loan amount, or they can pay it in total with the first loan repayment. Loans are typically repaid over periods of
five, ten, fifteen or twenty years, and repayment of the loans must begin within one year of construction completion. Repayments are credited to
special accounts and then used to lend out more funds to communities and qualified private water organizations. In addition to interest, portions of
loan repayment and federal grants are allowed to be allocated to administrative costs. There is no provision for uncollectible accounts, as all
repayments are current, and management believes all loans will be repaid according to the loan terms. Loan amounts classified currently represent
those loan amounts expected to be satisfied within the forthcoming fiscal year.
Under federal regulations, a portion of each federal grant award is required to be provided as additional subsidy to borrowers. This additional
subsidy comes in the form of principal forgiveness and ranges from 12% for CWSRF federal loans to a range of between 20-30% for DWSRF
federal loans. Borrowers must meet selected criteria to be eligible for the additional subsidy. Principal forgiveness eligibility and amount is
calculated when the loan is finalized and goes into repayment status. For CWSRF loans, principal forgiveness is recognized with the first loan
repayment. For DWSRF loans, principal forgiveness is recognized on a payment by payment basis. If a borrower defaults on a loan, the total
amount unpaid is deemed owed.
G. INVENTORIES
Inventories for materials and supplies are determined by physical count. Both the Lottery and Liquor Commissions use the lower of cost or market
to value their inventories. Lottery uses the first-in, first-out (FIFO) method and Liquor uses the average cost method. All other inventories in the
governmental and proprietary funds are stated at average cost.
Governmental fund inventories are recorded under the purchase method. Reported inventory balances in the governmental funds are offset by a
nonspendable fund balance designation that indicates they do not constitute available spendable resources.
H. CAPITAL ASSETS
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, bridges and similar items), are reported in the
applicable governmental or business-type activities columns in the government-wide financial statements and in the proprietary fund financial
statements. Such assets, whether purchased or constructed, are recorded at historical cost or estimated historical cost. Donated capital assets are
recorded at acquisition value.
Equipment is capitalized when the cost of individual items exceeds $10,000, and all other capital assets are capitalized when the cost of individual
items or projects exceeds $100,000. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized.
Capital assets of the primary government and the component units are depreciated using the straight-line method over the following useful lives:
Equipment 5 years
Buildings 40 years
Building improvements 20 years
Infrastructure 50 years
Computer software 5 years
I. UNEARNED REVENUE
In the government-wide financial statements, governmental fund financial statements and proprietary fund financial statements, unearned revenue
is recognized when cash, receivables or other assets are recorded prior to their being earned. As of June 30, 2021, unearned revenue reported in
governmental funds was $874.8 million, and in business-type activities was $17.3 million. The governmental funds includes the Coronavirus
Relief Fund, which reflects unearned revenue of $66.7 million. This represents the remainder of the $1.25 billion allocation received in fiscal
2020, for which revenue and corresponding expenditures to date have not yet been recognized.
C-38
54 l NEW HAMPSHIRE
J. ACCOUNTS PAYABLE
Accounts payable represent the gross amount of expenditures or expenses incurred as a result of normal operations, but for which no actual
payment has yet been issued to vendors/providers as of June 30.
K. COMPENSATED ABSENCES
All full-time State employees in classified service earn annual and sick leave. In previous fiscal years, additional leave (bonus days) may be
awarded based on the amount of sick leave taken during the year. Accrued compensatory time, earned for overtime worked, should generally be
taken within one year or in accordance with applicable collective bargaining agreements.
The State’s compensated absences liability represents the total liability for the cumulative balance of employees’ annual, bonus, compensatory, and
sick leave based on years of service rendered along with the State’s share of social security, Medicare and retirement contributions. The current
portion of the leave liability is calculated based on the characteristics of the type of leave and on a last-in, first-out (LIFO) basis, which assumes
employees use their most recent earned leave first. The accrued liability for annual leave does not exceed the maximum cumulative balance
allowed which ranges from 32 to 50 days based on years of service. The accrual for sick leave is made to the extent it is probable that the benefits
will result in termination payments rather than be taken as absences due to illness. The liability for compensated absences is recorded on the
accrual basis in the government-wide and proprietary fund financial statements.
In the governmental fund financial statements, liabilities for compensated absences are accrued when they are due and payable.
L. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES
Deferred outflows of resources are defined as a consumption of net assets by the government that is applicable to a future reporting period.
Deferred inflows of resources are defined as an acquisition of net assets by the government that is applicable to a future reporting period. Deferred
outflows of resources increase net position, similar to assets, and deferred inflows of resources decrease net position, similar to liabilities.
M. POSTEMPLOYMENT LIABILITIES
The State participates in two defined benefit pension plans, the State of New Hampshire Retirement System (NHRS) and the New Hampshire
Judicial Retirement Plan (NHJRP). The State also participates in two other postemployment benefit (OPEB) plans, a funded plan administered by
NHRS, hereafter referred to as the Trusted OPEB Plan, and a nonfunded plan, hereafter referred to as the Non Trusted OPEB Plan. See footnote
11 for activity related to these plans.
For purposes of measuring the total/net Pension and OPEB liabilities, deferred outflows of resources and deferred inflows of resources related to
these liabilities and related expense, information about the fiduciary net position of the NHRS and NHJRP, and additions to/deductions from the
fiduciary net position has been determined on the same basis as it is reported by NHRS, NHJRP and the State OPEB Plan. For this purpose,
benefit payments are recognized when due and payable in accordance with the benefit terms, and investments are reported at fair value.
N. FUND BALANCES
Fund balances for all governmental funds are classified as nonspendable, restricted, or unrestricted (committed, assigned, or unassigned).
Restricted represents those portions of the fund balance where constraints placed on the resources are either externally imposed or imposed by law
through constitutional provisions or enabling legislation. Committed fund balance represents the amount that can only be used for specific
purposes pursuant to constraints imposed by formal action of the Legislature. Assigned fund balance is constrained by the Legislature’s or other
executive authority’s intent to be used for specific purposes.
The State maintains a stabilization account referred to as the Revenue Stabilization Account (the “Rainy Day Fund”) in the general fund and
reported as unassigned fund balance. See Note 16 for additional information about fund balances and the stabilization account.
O. BOND DISCOUNTS AND PREMIUMS
In the government-wide and proprietary fund financial statements, bond discounts/premiums are deferred and amortized over the term of the bonds
using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.
In the governmental fund financial statements, bond discounts and premiums are recognized in the period the bond proceeds are received. The face
amount of the debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while
discounts are reported as other financing uses.
P. REVENUES AND EXPENDITURES/EXPENSES
In the government-wide Statement of Activities, revenues and expenses are segregated by activity (governmental or business-type), then further by
function (e.g. general government, education, etc.). Additionally, revenues are classified between program and general revenues. Program revenues
include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital
grants and contributions. Internally dedicated resources are reported as general revenues, rather than as program revenue. General revenues include
all taxes. Certain indirect costs are included in the program expenses reported for individual functions.
C-39
NEW HAMPSHIRE l 55
When an expenditure/expense is incurred for purposes for which both restricted and unrestricted resources are available, it is the State’s general
policy to use restricted resources first. In the governmental funds, when expenditures are incurred for purposes for which unrestricted (committed,
assigned, and unassigned) resources are available, and amounts in any of these unrestricted classifications could be used, it is the State’s general
policy to spend committed resources first followed by assigned and unassigned resources, respectively.
In the governmental fund financial statements, expenditures are reported by character: “Current”, “Debt Service” or “Capital Outlay.” Current
expenditures are subclassified by function and are for items such as salaries, grants, supplies and services. Debt service includes both interest and
principal outlays related to bonds and notes. Capital outlay includes expenditures for equipment, real property or infrastructure including the
Highway Fund’s capital outlays for the 10-year state capital highway construction program.
Revenues and expenses of proprietary funds are classified as operating or nonoperating and are subclassified by object (e.g. administration and
depreciation). Operating revenues and expenses generally result from providing services and producing and delivering goods. All other revenues
and expenses are generally reported as nonoperating.
Other Financing Sources (Uses) – These additions to and reductions from resources in governmental fund financial statements normally result
from transfers from/to other funds and financing provided by bond proceeds. Transfers are reported when incurred as “Transfers In” by the
receiving fund and as “Transfers Out” by the disbursing fund.
Reimbursements - Various departments charge fees on a user basis for such services as centralized data processing, accounting and auditing,
purchasing, personnel, and maintenance and telecommunications. These transactions, when material, have been eliminated in the government-wide
and governmental fund financial statements.
Q. INTERFUND ACTIVITY AND BALANCES
Interfund Activity – As a general rule, the effect of interfund activity has been eliminated from the government-wide statements. Exceptions to
this rule include activities between funds reported as governmental activities and funds reported as business-type activities (e.g. transfers of profits
from the Liquor Commission to General Fund and the Lottery Commission to the Education Trust Fund). Elimination of these activities would
distort the direct costs and program revenues for the functions concerned.
In the fund financial statements, transfers represent flows of assets (such as goods or cash) without equivalent flows of assets in return or a
requirement for repayment. In addition, transfers are recorded when a fund receiving revenue provides it to the fund which expends the resources.
Interfund Balances – Interfund receivables and payables have been eliminated from the government-wide Statement of Net Position, except for
the amounts due between governmental and business-type activities.
R. ENCUMBRANCES AND CAPITAL PROJECTS
Contracts and purchasing commitments are recorded as encumbrances when the contract or purchase order is executed. Upon receipt of goods or
services, the encumbrance is liquidated and the expenditure and liability are recorded.
Governmental activities generally records the resources obtained and used for the acquisition, construction, or improvement of certain capital
facilities in the Highway Fund and the Capital Projects Fund.
Resources obtained to finance capital projects include federal grants and general obligation bonds. General obligation bonds are recorded as
liabilities and as other financing sources, as appropriate in the funds that receive the proceeds.
S. BUDGET CONTROL AND REPORTING
The statutes of the State of New Hampshire require the Governor to submit a biennial budget to the Legislature for adoption. This budget, which
includes a separate budget for each year of the biennium, consists of three parts: Part I is the Governor’s program for meeting all expenditure needs
and estimating revenues. There is no constitutional or statutory requirement that the Governor propose, or the Legislature adopt, a budget that does
not resort to borrowing. Part II is a detailed breakdown of the budget at the department level for appropriations to meet the expenditure needs of
the government. Part III consists of draft appropriation bills for the appropriations made in the proposed budget.
The operating budget is prepared principally on a modified cash basis and adopted for the governmental funds, with the exception of the Capital
Projects Fund, and certain proprietary funds. The Capital Projects Fund budget represents individual projects that extend over several fiscal years.
Since the Capital Projects Fund comprises appropriations for multi-year projects, it is not included in the budget and actual comparison statements.
Fiduciary funds and permanent funds are not budgeted.
In addition to the enacted biennial operating budget, state departments may submit to the Legislature and Governor and Council, as required,
supplemental budget requests necessary to meet expenditures during the current biennium. Appropriation transfers can be made within a
department with the appropriate approvals; therefore, the legal level of budgetary control is generally at the expenditure class level within each
accounting unit within each department.
Both the Executive and Legislative Branches of government maintain additional fiscal control procedures. The Executive Branch, represented by
the Commissioner of the Department of Administrative Services, is directed to continually monitor the State’s financial operations, needs, and
resources, and to maintain an integrated financial accounting system. The Legislative Branch, represented by the Fiscal Committee, the Joint
C-40
56 l NEW HAMPSHIRE
Legislative Capital Budget Overview Committee, and the Office of Legislative Budget Assistant, monitors compliance with the budget and the
effectiveness of budgeted programs.
Unexpended balances of appropriations at year end will generally lapse to assigned or unassigned fund balance and be available for future
appropriations unless they have been encumbered or legally defined as non-lapsing, which means the balances are reported as restricted,
committed or assigned fund balance. The balance of unexpended encumbrances are brought forward into the next fiscal year. Capital Projects Fund
unencumbered appropriations lapse in two years unless extended or designated as non-lapsing by law.
Budget to Actual Comparisons and additional budgetary information are included as Required Supplementary Information.
T. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the basic financial statements and accompanying notes. Actual results could differ from those
estimates.
U. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
During the fiscal year ended June 30, 2021, the State adopted the following new accounting standards issued by the GASB:
GASB No. 84: Fiduciary Activities. The objective of this standard is to improve guidance regarding the identification of fiduciary activities for
accounting and financial reporting purposes and how those activities should be reported. The implementation of this standard resulted in the
reclassification of certain balances between governmental and fiduciary financial statements. The standard also resulted in the elimination of the
previously presented Agency Fund: Combining Statement of Assets and Liabilities and Combining Statement of Changes in Assets and Liabilities,
and the incorporation of a new component of the Fiduciary Fund Financial Statements reflecting activity in custodial accounts.
Other Private
Governmental Permanent Governmental Purpose Custodial
(Expressed in Thousands) Activities Funds Funds Funds Funds
Net Position, as previously reported $304,016 $26,944 $13,907
GASB 84 Implementation Adjustment 12,086 (3,023) 15,109 (4,990) 5,732
Net Position, as restated $316,102 $23,921 $15,109 $8,917 $5,732
GASB No. 89: Accounting for Interest Cost Incurred before the End of a Construction Period; The objectives of this standard are (1) to enhance
the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting
for interest cost incurred before the end of the construction period. The effective date for implementation is June 30, 2022 and should be applied
prospectively. Early implementation of this standard did not have a material effect on the State's financial statements and prior period restatements
are not applicable.
GASB No. 90, Majority Equity Interests - an amendment of GASB Statements No. 14 and No. 61 was implemented during fiscal year 2021 and
had no material effect on the State's financial statements.
GASB No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance, (GASB 95) addresses the temporary relief to governments
and other stakeholders in the light of the COVID-19 pandemic by postponing the effective dates of certain GASB pronouncements that first
became effective or are scheduled to become effective for periods beginning after June 25, 2018 and later. The effective dates for certain
pronouncements are postponed by one year and GASB Statement 87 Leases is postponed by eighteen months. The primary government and
component units have implemented GASB 95. As a result, the implementation of GASB No. 87 Leases will be implemented during fiscal year
2022.
C-41
NEW HAMPSHIRE l 57
2. CASH, CASH EQUIVALENTS, AND INVESTMENTS
PRIMARY GOVERNMENT AND NON PENSION FIDUCIARY FUNDS
The State pools cash and investments except for separate cash and investment accounts maintained in accordance with legal restrictions. Each
fund’s equity share of the total pooled cash and investments and restricted assets is included on the statements of financial position under the
captions “Cash and Cash Equivalents” and “Investments.”
The table below presents the cash, cash equivalents, and investments as reflected in the financial statements (expressed in thousands):
Unrestricted Restricted
Cash and Cash Cash and Cash
Equivalents Investments Equivalents Investments Total
Per Statement of Net Position Primary Government $ 1,641,055 $ 25,143 $ 365,808 $ 748,044 $ 2,780,050
Per Statement of Fiduciary Net Position Private Purpose 3,236 15,789 19,025
Investment Trust 136 213,885 214,021
Custodial Funds 61,155 283 61,438
Total per Financial Statements $ 1,705,582 $ 255,100 $ 365,808 $ 748,044 $ 3,074,534
INVESTMENTS:
The State’s Treasury Department (State Treasury) is responsible for managing certain State cash and investments in accordance with policies to
ensure reasonable rates of return on investments while minimizing risk factors. Approved investments are defined in statute (RSA 6:8 and 383-
B:3-303). Additionally, investment guidelines exist for operating funds as well as trust and custodial funds. All investments are denominated in
U.S. dollars.
Fair Value Hierarchy of Investments: In accordance with GASBS 72, except for investments measured using net asset value (NAV) as a
practical expedient to estimate fair value, the State categorizes the fair value measurements of its investments within the fair value hierarchy
established by U.S. GAAP. The fair value hierarchy categorizes the inputs to valuation techniques used for fair value measurement into the
following levels:
• Level 1 inputs reflect quoted prices (unadjusted) in active markets for identical assets or liabilities that the State has the ability to access
at the measurement date. Most of the State’s directly held marketable equity securities would be examples of Level 1 investments.
• Level 2 inputs are other than quoted prices that are observable for assets or liabilities either directly or indirectly, including inputs in
markets that are not considered to be active. Because they most often are priced on the basis of transactions involving similar but not
identical securities or do not trade with sufficient frequency, certain directly held fixed income securities, as well as the State’s holdings
in U.S. government obligations and corporate bonds, are categorized in Level 2.
• Level 3 inputs are significant unobservable inputs. The State held no Level 3 investments as of June 30, 2021.
The fair value hierarchy gives the highest priority to Level 1 inputs. In certain instances where the determination of the fair value measurement is
based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy is based on the lowest level of input that is
significant to the fair value measurement. If an investment is held directly by the State and an active market with quoted prices exists, such as for
domestic equity securities, registered mutual funds and exchanged traded funds, those securities are classified in Level 1. Corporate fixed income
securities and certain governmental securities utilize pricing that may involve estimation using market data and matrix pricing.
Investments in money market mutual funds are generally reported at the net asset value (NAV) reported by the fund managers, which is used as a
practical expedient to estimate the fair value of the State’s interest therein, unless it is probable that all or a portion of the investment will be sold
for an amount different from NAV. At June 30, 2021 the State had no plans or intentions to sell investments at amounts different from NAV.
NAVs determined by fund managers generally consider variables such as operating results, comparable earnings multiples, projected cash flows,
recent sales prices, and other pertinent information, and may reflect discounts for the illiquid nature of certain investments held. Because of the
inherent uncertainties of valuation, the estimated fair values used in NAV calculations may differ significantly from values that would have been
used had a ready market existed, and the differences could be material.
C-42
58 l NEW HAMPSHIRE
The following table summarizes the State's investments and cash equivalents, by type, as of June 30, 2021 (expressed in thousands):
Investments Classified in the
Fair Value Hierarchy
Quoted Prices in
Active Markets for Significant Other
Identical Assets Observable Inputs
(Level 1) (Level 2) Total
Investments measured at fair value:
U.S. Government Obligations $ 374,341 $ 374,341
Equity Securities $ 23,332 23,332
Corporate Bonds 1,960 1,960
Total Investments measured at fair value 23,332 376,301 399,633
Investments measured at the Net Asset Value (NAV):
Money Market Mutual Funds 243,352
Equity Open Ended Mutual Funds 27,971
Fixed Income Open Ended Mutual Funds 20,985
Total Investments measured at the Net Asset Value (NAV) 292,308
Investments and Cash Equivalents not measured at fair value:
External portion of NH Public Deposit Investment Pool 213,885
Internal Investment in NH Public Deposit Investment Pool 5,787
Investment CDs greater than 90 days; repurchase agreement 91,531
Cash and Cash Equivalents 2,071,390
Total Investments and Cash Equivalents not measured at fair value 2,382,593
Grand Total $ 23,332 $ 376,301 $ 3,074,534
Note to the table above: Rates range from 0.0% to 5.95% and maturities from fiscal year 2021 to 2028.
Equity Securities and Mutual Funds:
The State’s policy relative to operating funds and mitigation of concentration and credit risk does not permit investing in equity securities.
Although not issuer specific, individual investment guidelines for trust and custodial funds include overall asset allocation limits that are consistent
with sound investment principles and practices. All equity mutual funds are open ended and not exposed to custodial credit risk. There is no credit,
custodial, or concentration risk to the State for the amounts held in the State's abandoned property program. These assets represent securities
remitted to the State simply for safe-keeping with the goal of eventual return to the rightful owner.
Credit Risk: The risk that the issuer or other counterparty will not fulfill its obligations. The NHPDIP is rated AAAm by Standard & Poor’s
Rating Services. The AAAm principal stability rating is the highest assigned to principal stability government investment pools. Money market
funds to be considered and utilized are those funds invested in the U.S. Treasury, Agency or other securities commonly referred to as being "within
first tier categories" and/or which have the highest rating available from at least one nationally recognized rating agency.
Debt Securities: The State invests in several types of debt securities including corporate and municipal bonds, and securities issued by the U.S.
Treasury and Government Agencies.
There is no credit, interest rate, custodial, or concentration risk to the State for amounts held in the State's abandoned property program. These
assets represent securities remitted to the State simply for safe-keeping with the goal of eventual return to the rightful owner.
Credit Risk: The risk that the issuer will not fulfill its obligations. The State invests in only investment grade securities which are defined as
those with a grade B or higher. Obligations of the U.S. Government or obligations backed by the U.S. Government are not considered to have
credit risk. All commercial paper must be from issuers having an A1/P1 rating or better and an AA- or better long-term debt rating from one or
more of the nationally recognized rating agencies.
Interest Rate Risk: The risk that changes in interest rates will adversely affect the fair value of an investment. Interest rate risk is primarily
measured and monitored by defining or limiting the maturity of any investment or weighted average maturity of a group of investments. Fixed
income mutual funds which consist of shares of funds which hold diversified portfolios of fixed income securities for operating purposes are
limited to those with average maturity not to exceed 3 years. Trust and custodial funds manage and monitor interest rate risk primarily through a
weighted average maturity (WAM) approach. The State’s WAM is dollar-weighted in terms of years. The specific target or limits of such
maturity and percentage allocations are tailored to meet the investment objective(s) and defined in the investment guidelines associated with those
funds.
Custodial Credit Risk: The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, an
investor will not be able to recover the value of investments that are in the possession of an outside party. Open ended mutual funds and external
pools are not exposed to custodial credit risk because their existence is not evidenced by securities that exist in physical or book entry form. The
State’s selection criteria are aimed at investing only with high quality institutions where default is extremely unlikely.
C-43
NEW HAMPSHIRE l 59
Concentration Risk: The risk of loss attributed to the magnitude of the State’s investment in a single issuer. The State does not have a formal
policy relative to operating funds and mitigation of concentration of credit risk. This risk is applicable to the State's investments in corporate bonds
which are held in certain trust and custodial accounts. Although not issuer specific, individual investment guidelines for trust and custodial funds
include overall asset allocation limits that are consistent with sound investment principles and practices.
The State's exposed risks at June 30, 2021 are noted below:
Credit Risk and Interest Rate Risk (expressed in thousands)
Governmental & Business Type Fiduciary
Interest Rate Interest Rate
Type Credit Risk Risk Credit Risk Risk
Investment Investment
Grade Unrated WAM in years Grade Unrated WAM in years
Corporate Bonds $ 1,882 3.3
U.S. Government Obligations Held in
Permanent Funds 1,175 3.9
U.S. Government Obligations Held in
Governmental and Business Type Activities 373,166 1.3
Fixed Income Open Ended Mutual Funds 8,858 3.4 $ 10,080 5.4
Municipal Bonds
DEPOSITS:
The following statutory requirements and State Treasury policies have been adopted to minimize risk associated with deposits:
RSA 6:7 establishes the policy the State Treasurer must adhere to when depositing public monies. Operating funds are invested per investment
policies that further define appropriate investment choices and constraints as they apply to those investment types.
Custodial Credit Risk: The custodial credit risk for deposits is the risk that in the event of a bank failure, the State’s deposits may not be
recovered.
Custodial credit risk is managed in a variety of ways. Although state law does not require deposits to be collateralized, the Treasurer does utilize
such arrangements where prudent and/or cost effective. All banks, where the State has deposits and/or active accounts, are monitored as to their
financial health through the services of Veribanc, Inc., a bank rating firm. In addition, ongoing reviews with officials of depository institutions are
used to allow for frequent monitoring of custodial credit risk.
All deposits at FDIC-insured depository institutions (including noninterest bearing accounts) are insured by the FDIC up to the standard maximum
amount of $250,000 for each deposit insurance ownership category.
All commercial paper must be from issuers having an A1/P1 rating or better and an AA- or better long-term debt rating from one or more of the
nationally recognized rating agencies. Certificates of deposits must be with state or federally chartered banking institutions with a branch in New
Hampshire. The institution must have the highest rating as measured by Veribanc, Inc.
Whereas all payments made to the State are to be in U.S. dollars, foreign currency risk is essentially nonexistent on State deposits.
The table below details the State's bank balances at June 30, 2021 exposed to custodial credit risk and excludes $0.1 million in cash and cash
equivalents held by the Investment Trust Fund (expressed in thousands):
Governmental & Business-Type Fiduciary
Collateral & held Collateral & held
Type Insured in State's name Uncollateralized Insured in State's name Uncollateralized
Demand Deposits $ 2,414 $ 1,928,648 $ 26,158 $ 64,724 $ 71
Money Mkt/Svgs Acct 4,692 16 178
Total $ 2,414 $ 1,933,340 $ 26,158 $ 64,740 $ 249
C-44
60 l NEW HAMPSHIRE
FIDUCIARY COMPONENT UNIT (New Hampshire Retirement System – NHRS)
Investments in both domestic and non-U.S. marketable securities traded on a national or international exchange are valued at quoted market prices.
Domestic and non-U.S. securities not traded on a national or international exchange are based upon quoted prices for comparable instruments with
similar yields and risk in active and inactive markets. NHRS uses a trade-date accounting basis for both domestic and non-U.S. securities and
values are expressed in U.S. dollars. Investments in non-registered commingled funds are valued at net asset value (NAV) as a practical expedient
to estimate fair value.
Real estate includes investments in commingled funds which are reported at NAV. The NAVs for real estate investments recorded in this report
were obtained from statements provided by the general partners of commingled funds. Real estate commingled funds are selected by NHRS’s
discretionary real estate manager.
Alternative investments include investments in private equity, private debt and absolute return strategies which are reported at NAV. The NAVs
for alternative investments recorded in this report were obtained from statements provided by the investment managers.
Cash and cash equivalents are valued at cost, which approximates fair value. Cash and cash equivalents primarily represent investments in the
pooled short term investment fund managed by NHRS’s master custodian. This fund invests mainly in high-grade money market instruments with
maturities averaging less than three months. The fund provides daily liquidity.
The Plan holds no investments, either directly or indirectly, nor participates in any loans or leases, nor other party-in-interest transactions with any
NHRS officials, New Hampshire State Government officials, or parties related to these officials.
RSA 100-A:15, I, provides separate and specific authorities to the Board of Trustees and the Independent Investment Committee for the
management of the funds of the Plans and charges them with exercising the judgment and care under the circumstances then prevailing, which
persons of prudence, discretion and intelligence, acting in a like capacity and familiar with such matters, would use in the conduct of a pension
plan of like character and with like aims of the Plans.
To aid in the prudent investment of the Plans’ assets, NHRS has adopted an Investment Manual which includes an investment policy. Primary
components of the investment policy include the delineation of roles and responsibilities of the Board of Trustees, Independent Investment
Committee, staff, and service providers; investment objectives; asset allocation policy; and asset class performance measurement and monitoring
policy. This policy may be modified by the Board of Trustees as deemed necessary. In addition, the Investment Manual includes asset class
guidelines which provide parameters for investment management.
Professional investment managers are bound by policy and contract to a standard of care that establishes a fiduciary relationship, to the extent
permitted by law, requiring the manager to act prudently and solely in the best interest of the Plans and beneficiaries. Investment guidelines
provide portfolio-level standards for separate account management including permissible investment types; security concentration thresholds;
investment restrictions; and benchmarks for performance measurement and monitoring. NHRS utilizes a custodial bank compliance system to
monitor the marketable investment portfolios against their respective guidelines.
NHRS's asset allocation as of June 30, 2021, as recommended by the Independent Investment Committee and adopted by the NHRS Board of
Trustees, is as follows:
ASSET ALLOCATION 2021
Asset Class: Target Range
Large Cap Equities 22.5 %
Small/Mid Cap Equities 7.5 %
Total Domestic Equity 30.0 % 20–40%
Int’l Equities (Unhedged) 13.0 %
Emerging Int’l Equities 7.0 %
Total International Equity 20.0 % 15–25%
Core Bonds 4.5 %
Short Duration 2.5 %
Global Multi-Sector Fixed Income 11.0 %
Absolute Return Fixed Income 7.0 %
Total Fixed Income 25.0 % 20–30%
Private Equity 10.0 %
Private Debt 5.0 %
Total Alternative Investments 15.0 % 5–25%
Real Estate 10.0 %
Total Real Estate 10.0 % 5-20%
TOTAL 100.0 %
Custodial Credit Risk - Deposits: Custodial credit risk for deposits is the risk that in an event of a bank failure, deposits may not be recovered.
NHRS does not have a deposit policy to manage custodial credit risk on deposits. At June 30, 2021, NHRS held deposits of $8.7 million in the
local custodian bank. These deposits are fully insured or collateralized and are used to support the daily working capital needs of NHRS.
C-45
NEW HAMPSHIRE l 61
Custodial Credit Risk - Investments: Investment securities are exposed to custodial credit risk if the investment securities are uninsured, are not
registered in the name of the Plan, and are held by either:
a. The counterparty to a transaction or,
b. The counterparty’s trust department or agent but not in the Plan’s name.
All of NHRS’s securities are held by NHRS’s bank in NHRS’s name.
Concentration of Credit Risk: Concentration of credit risk is the risk of loss attributable to the magnitude of the Plans’ investments in a single
issuer. NHRS policy is expressed through individual separate account manager guidelines which limit investments in a single issuer to 10%, or
less, of the portfolio value in order to control the overall risk of loss on a total portfolio level. This threshold is set as an upper limit, and in actual
practice, managers generally do not reach this limit. Certain securities may be excluded from this limitation due to the nature of the investments
(such as U.S. government securities, government-sponsored enterprise obligations, and supranational debt). NHRS fixed income managers have
consistently adhered to the established guidelines for issuer concentration. The fixed income commingled fund managers have established
investment guidelines regarding concentration of credit risk. The total portfolio is broadly-diversified across equities, fixed income, cash
equivalent securities, real estate and alternative investments. Due to this diversification, the concentration of credit risk in a single issuer is below
5% at the total portfolio level.
Interest Rate Risk - Fixed Income Investments:Interest rate risk is the effect on the fair value of fixed income investments from changes in
interest rates. Duration measures a debt investment’s change in fair value arising from a change in interest rates.
Interest rate risk is illustrated below using the effective duration or option-adjusted methodology. This methodology is widely-used in the
management of fixed income portfolios to quantify the risk associated with interest rate changes. The effective duration methodology takes into
account the most likely timing and magnitude of variable cash flows, such as callable options, prepayments and other factors, and scales the risk
of price changes on bonds depending upon the degree of change in rates and the slope of the yield curve.
The NHRS policy on duration is expressed through individual portfolio guidelines with each investment manager in lieu of a broad, plan-level
policy. Duration guidelines have been established with each fixed income manager in order to manage interest rate risk within the separate account
portfolios. The fixed income commingled fund managers also have established investment guidelines regarding duration. These provisions specify
that the duration of each individual fixed income portfolio will be managed within a specified percentage or number of years relative to its
benchmark index. NHRS fixed income managers follow the established guidelines for duration. If there is an occasional exception, the manager
prudently remedies the guideline breach.
The following effective duration table quantifies the interest rate risk of the Plan’s fixed income assets, as of June 30, 2021 (dollars expressed in
thousands):
Weighted
Percentage of Effective Average
Fair Value June Fixed Income Duration in Effective
Investment Type 30, 2021 Investments Years Duration Years
Collateralized/Asset Backed Obligations $ 243,843 11.1 % 3.5 0.4
Corporate Bonds 574,226 26.2 % 7.9 2.1
Government and Agency Bonds 509,853 23.2 % 5.7 1.3
Commingled Fund 220,193 10.0 % 3.5 0.4
Commingled Fund 386,434 17.6 % 6.5 1.1
Commingled Fund 260,239 11.9 % 1.2 0.1
Totals $ 2,194,788 100.0 % 5.4
Credit Risk - Fixed Income Securities: Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations.
NHRS controls credit risk on debt securities by establishing requirements for average credit quality at the separate account portfolio level and
through credit quality standards for individual securities. The NHRS policy on credit quality is expressed through individual portfolio guidelines
with each investment manager in lieu of a broad, plan-level policy. The investment guidelines are customized to the individual manager’s strategy.
NHRS fixed income managers follow established guidelines for credit quality. If there is an occasional exception, the manager prudently remedies
the guideline breach. NHRS applies standards with regard to securities rated by nationally recognized statistical rating organizations (“NRSRO”)
and uses the lowest agency ratings for evaluating the credit quality of a specific security. The fixed income commingled fund managers have
established investment guidelines regarding credit risk.
C-46
62 l NEW HAMPSHIRE
The following schedule illustrates the Plan’s fixed income investments as of June 30, 2021, including the distribution of those investments by
Standard & Poor’s quality credit ratings (dollars expressed in thousands):
Quality Ratings1
Fair Value June BBB or
Investment Type 30, 2021 AAA AA A Lower Unrated
Collateralized/Asset Backed Obligations $ 243,843 $ 152,550 $ 6,004 $ 17,387 $ 28,728 $ 39,174
Corporate Bonds 574,226 4,675 26,024 135,751 397,849 9,927
2
Government and Agency Bonds 125,942 5,775 21,275 20,619 71,732 6,541
3
Commingled Fund 260,239 260,239
Commingled Fund 3 386,434 386,434
3
Commingled Fund 220,193 220,193
Totals $ 1,810,877 $ 163,000 $ 53,303 $ 173,757 $1,365,175 $ 55,642
Percent of Total Fair Value 9.00 % 2.94 % 9.60 % 75.39 % 3.07 %
1
Ratings were derived primarily from Standard & Poors (S&P). In instances where S&P did not rate a security, the Moody's rating was used.
2
Government and Agency Bonds exclude U.S. government securities and securities explicitly guaranteed by the U.S. government ($383,911) because these
securities are not considered to have credit risk.
3
Average credit quality ratings for the commingled funds was provided by Blackrock SIO, Fidelity, and Manulife respectively.
Investments in asset-backed and mortgage-backed securities are reported at fair value. Although not generally considered to be derivatives, asset-
backed and mortgage-backed securities receive cash flows from interest and principal payments on the underlying assets and mortgages. As a
result, they are exposed to prepayment risk. As of June 30, 2021, the Plan’s combined investment in asset-backed and mortgage-backed securities
held in separate account portfolios totaled $816.9 million.
Foreign Currency Risk - Investments: Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an
investment.
NHRS manages its foreign currency risk primarily through its strategic asset allocation policy. As of June 30, 2021, investments in non-U.S. equity
securities have a target asset allocation of 20% of total investments with a target range of 15–25%. As of June 30, 2021, non-U.S. fixed income
securities represent 0.9% of the total investments as a result of the managers’ security selection process. Non-U.S. investments are permitted in the
alternative investment asset class, which includes private equity, private debt and absolute return strategy investments. The target allocation for
alternative investments is 15% and the NHRS investment policy does not set limits for foreign investments in this asset class. The target allocation
for real estate investments is 10%, and up to 35% of the Plan’s real estate allocation may be invested in non-U.S. investments.
In addition, foreign currency risk is mitigated through the investment guidelines. NHRS manages its foreign exposure by requiring that separate
account managers diversify their non-U.S. portfolios by country, sector and issuer to limit both foreign currency risk and security risk. Managers of
commingled funds have discretion over their respective investment guidelines which must be consistent with strategies approved by NHRS. In
certain instances, where permitted in the investment guidelines, investment managers may also use foreign currency forward contracts to hedge
against foreign currency risk.
The Plan's exposure to foreign currency risk at June 30, 2021 is presented on the following schedule (expressed in thousands):
Real Estate and
Alternative Cash and Cash
Currency Equity Fixed Income Investments Equivalents Totals
Total investments subject to foreign currency risk $ 1,098,477 $ 1,246,643 $ 132,192 $ 631,455 $ 3,108,767
Derivatives: Derivative instruments are contracts whose values are based on the valuation of an underlying asset, reference rate or index.
Derivatives include futures, options, forward contracts and forward foreign currency exchanges. NHRS managers may enter into certain derivative
instruments primarily to enhance the efficiency and reduce the volatility of the portfolio. There were no investments in options within the separate
account portfolios. The NHRS investment policy and certain investment manager guidelines allow for the use of derivative instruments. The use of
futures, options, or forward contracts is not permitted for any speculative hedging or leveraging of the portfolios and is prohibited in separate
account mandates. Managers of commingled funds have discretion over their respective investment guidelines which may allow for the use of
derivative instruments.
The Plans could be exposed to risk if the counterparties to the contracts are unable to meet the terms of the contracts. To mitigate this risk,
investment managers conduct assessments of their counterparties and utilize exchanges which have trading standards.
NHRS managers may use futures, options, and foreign currency exchange contracts in order to manage currency risk or initiate transactions in non-
U.S. investments. NHRS may be positively or negatively impacted by foreign currency risk due to fluctuations in the value of different currencies.
NHRS may also be positively or negatively impacted by interest rate risk due to changes in interest rates. The Plans could be exposed to risk if the
counterparties to the contracts are unable to meet the terms of the contracts. To mitigate this risk, investment managers conduct assessments of
C-47
NEW HAMPSHIRE l 63
their counterparties and utilize exchanges which have trading standards. The fair value of open foreign currency exchange contracts including
unrealized appreciation or depreciation is recorded on the Statements of Fiduciary Net Position as Due from Brokers for Securities Sold and as
Due to Brokers for Securities Purchased.
Foreign currency exchange contracts open at June 30, 2021 are summarized below (expressed in thousands):
FOREIGN CURRENCY EXCHANGE CONTRACTS PURCHASED & SOLD
Unrealized Appreciation Unrealized (Depreciation)
Totals $ 1,610 $ (2,174)
Fair Value: NHRS categorizes the fair value measurements of its investment within the fair value hierarchy established by generally accepted
accounting principles as described in detail earlier in Note 2. The hierarchy is based on the valuation inputs used to measure the fair value of the
asset and give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to
unobservable inputs (level 3).
Level 1 - Unadjusted quoted prices for identical instruments in active markets.
Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not
active; and model-derived valuations in which all significant inputs are observable.
Level 3 - Valuations derived from valuation techniques in which significant inputs are unobservable. NHRS had no level 3 investments as of
June 30, 2021.
Investments that are measured at fair value using the net asset value (NAV) as a practical expedient are not classified in the fair value hierarchy. At
June 30, 2021 NHRS had no plans or intentions to sell investments at amounts different from NAV.
The categorization of investments within the hierarchy is based on the pricing transparency of the investment and should not be perceived as the
particular investment’s risk.
The following table summarizes NHRS's investments measured at fair value, by type, as of June 30, 2021 (expressed in thousands):
2021
Fair Value Measurements Using (in thousands)
Quoted Prices in
Active Markets for Significant Other Net Asset
Identical Assets Observable Inputs Value Unfunded
Investments at Fair Value Total (Level 1) (Level 2) (NAV) Commitments
Fixed Income:
U.S Government Obligations (1) $ 388,029 $ 327,309 $ 60,720
Domestic Fixed Income (2) 841,129 841,129
Commingled Funds (3) 866,867 866,867
International Fixed Income (4) 98,763 98,763
Equity:
Domestic Equity Securities 3,954,960 3,949,226 5,734
Commingled Funds (5) 589,378 589,378
International Equity Securities 1,121,309 1,121,309
Real Estate:
Real Estate Funds (6) 1,129,863 1,129,863 261,723
Alternative Investments:
Private Equity (7) 1,643,888 1,643,888 731,325
Private Debt (8) 572,100 572,100 357,701
Total Investments $ 11,206,286 $ 5,397,844 $ 1,006,346 $ 4,802,096 $ 1,350,749
Notes to the table above:
(1) Fiscal 2021 rates range from 0.125% to 5.490%, and maturities from 2022 to 2050. Fiscal 2020 rates range from 0.125% to 5.490%, and
maturities from 2021 to 2050.
(2) Fiscal 2021 rates range from 0.00% to 8.375%, and maturities from 2022 to 2069. Fiscal 2020 rates range from 0.00% to 9.250%, and
maturities from 2021 to 2069.
(3) This represents investments in three commingled fixed income funds that invest globally in both developed and emerging markets with
investments consisting primarily of corporate bonds (investment grade and high yield), sovereign bonds and securitized bonds. These
funds may also invest in convertible bonds and currencies. The redemption frequency for these investments range from daily to monthly
with one to 30 business days’ prior written notice.
(4) Fiscal 2021 rates range from 3.00% to 10.000%, and maturities from 2021 to 2048. Fiscal 2020 rates range from 1.00% to 10.000%, and
maturities from 2021 to 2050.
(5) This represents investments in three commingled equity funds that invest primarily in common stock of companies located outside the
U.S., including emerging markets. These investments have daily liquidity and require up to 10 business days’ notice for redemption.
C-48
64 l NEW HAMPSHIRE
(6) This represents investments in 65 real estate vehicles consisting of 12 strategic open-end funds and 53 tactical non-core investments.
Redemption from the open-end funds can be requested on a quarterly basis with 45-90 days’ notice periods. The tactical non-core
investments are not redeemable. NHRS has no direct property investments as of June 30, 2021.
(7) This represents 41 investments in private partnerships focused primarily on the following strategies: buyouts, growth equity, secondaries
and energy. These private partnerships typically have 10 to 15 year life cycles during which limited partners are unable to redeem their
positions, but instead, receive distributions as the partnerships liquidate their underlying assets.
(8) This represents 28 investments in private partnerships focused primarily on the following strategies: direct lending, mezzanine and
distressed debt. These private partnerships typically have 6 to 10 year life cycles during which limited partners are unable to redeem
their positions, but instead, receive distributions from coupon payments and/or as the partnerships liquidate their underlying asset.
FIDUCIARY COMPONENT UNIT (New Hampshire Judicial Retirement Plan - NHJRP)
Investments are reported at fair value. Investments in mutual funds are valued at current market prices. Alternative investments include
investments in limited partnerships valued at net asset value (NAV) as a practical expedient to estimate fair value. The NAVs for alternative
investments were obtained from statements provided by the investment managers in good faith by the funds' managers or underlying investments'
general partners. These values may not reflect the amount that would be realized upon an immediate sale due to lack of liquidity or other market
conditions. Due to the uncertainty of valuation, the investment manager's estimated values may differ from the values that would have been used
had a ready market existed for the fund's investments, and the difference could be material. The net appreciation (depreciation) in the fair value of
investments held by NHJRP is based on the valuation of investments as of the date of the statement of fiduciary net position.
The investment philosophy of the Board of Trustees of NHJRP flows from its responsibility as fiduciary with respect to the NHJRP members and
beneficiaries. As such, the Plan's assets are invested and managed for the exclusive purpose of providing plan benefits and are invested pursuant to
RSA 100-C:12. The Board of Trustees pursues an investment strategy designed to meet the long-term funding requirements of NHJRP as
determined by the NHJRP’s actuary.
The Board's investment policy permits NHJRP assets to be invested in U.S. and non-U.S. equities, U.S. and non-U.S. fixed income securities, and
certain hedge funds and alternative fund-of-funds, subject to certain portfolio restrictions. Asset allocations among various classes are as follows as
of December 31, 2020:
ASSET ALLOCATION
Asset Class: Target Policy Range
Large Cap Equities 31.000 %
Small Cap Equities 4.000 %
Domestic Equity 35.000 % 35–45%
International Equity 15.500 % 8–20%
Core Fixed Income 37.000 %
Fixed Income 37.000 % 10–33%
U.S. REITs 2.500 %
Alternatives 9.000 %
Alternatives 11.500 % 0–33%
Cash and cash equivalents 1.000 % 0-15%
Custodial Credit Risk - Deposits: At times, NHJRP maintains cash balances in excess of the amount insured by the Federal Deposit Insurance
Corporation. NHJRP has not experienced any losses in such accounts. NHJRP believes it is not exposed to any significant risk with respect to these
accounts held at Bank of New Hampshire.
Custodial Credit Risk - Investments: Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a
transaction, NHJRP will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party.
Investment securities are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of NHJRP and are held by
either the counterparty, or the counterparty’s trust department or agency, but not in NHJRP’s name.
NHJRP does not have a written policy in place to address custodial credit risk on investments. As of December 31, 2020, NHJRP’s investments
included in the Statement of Fiduciary Net Position were exposed to custodial credit risk. The investments were held by the counterparty, not in the
name of NHJRP.
Concentration of Credit Risk: NHJRP's investment policy prohibits more than 5% of the portfolio, at fair value, to be invested in the securities of
any one company. These guidelines mitigate the magnitude of risk and loss attributable to a single issuer.
Interest Rate Risk - Fixed Income Investments: Interest rate risk associated with adverse effects of changes in the fair value of fixed income
securities is not addressed in the policy by NHJRP. While policies do exist to limit the percentage of market value in a single issue at any one time
and of the total percentage held of any issuer's debt instruments, the duration of the remaining life of individual securities is not subject to any
limitations and may therefore introduce a measure of interest rate risk.
Credit Quality Risk - Fixed Income Investments: The investment policy uses quality ratings by Standard & Poor's and Moody's as the primary
guide for corporate fixed income investments. There are no limits on the use of U.S. Government, agency or guaranteed issues. In addition, there
are no limits on the use of issues of Canadian, British, Japanese, Australian, or European monetary systems bloc governments and their agencies
C-49
NEW HAMPSHIRE l 65
and supranational borrowers in local currency or European Currency Unit. A 15% limit is placed on all other issues. NHJRP’s fixed income
investments are in mutual funds for which ratings are not available.
Fair Value: NHJRP categorizes the fair value measurements of its investments within the fair value hierarchy established by generally accepted
accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the investment. Level 1 inputs are quoted
prices in active markets for identical assets. Level 2 inputs are other significant observable inputs. Level 3 inputs are unobservable inputs. NHJRP
has the following recurring fair value measurements as of December 31, 2020 (expressed in thousands):
Fair Value Measurements as of December 31, 2020 Using:
Quoted Prices in Significant
Active Markets for Other Significant
Identical Assets Observable Unobservable Net Asset Value
(Level 1) Inputs (Level 2) Inputs (Level 3) (NAV) Total
Investments at fair value
Domestic equity $ 30,208 $ 30,208
International equity 14,792 14,792
Fixed income 22,954 22,954
Alternatives 2,024 328 2,352
$ 69,978 $ 328 $ 70,306
NHJRP’s alternative investments valued at NAV are subject to redemption restrictions. At December 31, 2020, the alternative investment at NAV
is subject to quarterly redemption with 65 days notice. The alternative investment at NAV seeks consistent stable returns by allocation of the fund's
assets to a wide range of alternative investment strategies across the global financial markets. NHJRP’s assets are managed primarily through
investments in other corporations and other investment vehicles, as well as indirectly through segregated portfolio companies. The alternative
investment at NAV is a globally diversified, multi-strategy, multi-manager portfolio that seeks to maximize expected active return from investing
in hedge funds while minimizing passive risk and managing exposure to shock risk. Shock risk is a portfolio’s exposure to losses that occur when
markets function poorly. The alternative investment at NAV does not use formal targets for strategy allocations; rather, it focuses efforts on
continuously driving strategy allocations toward areas of greater opportunity, subject to all the normal constraints (portfolio risk management,
manager capacity availability, liquidity constraints and expected fund flows).
MAJOR COMPONENT UNIT (University System of New Hampshire - USNH)
Cash, cash equivalents, and short-term investments are recorded at fair value. USNH's investment policy and guidelines specify permitted
instruments, durations, required ratings and insurance of USNH cash, cash equivalents and short-term investments. The investment policy and
guidelines are intended to mitigate credit risk on investments individually and in the aggregate through restrictions on investment type, liquidity,
custodian, dollar level, maturity, and rating category. Money market funds are placed with the largest national fund managers. These funds must be
rated AA/Aa by Standard & Poor’s and Moody’s Investor Service and comply with Securities and Exchange Commission Rule 2A-7. Repurchase
agreements must be fully collateralized at 102% of the face value by U.S. Treasuries, or 103% of the face value by US Government-backed or
guaranteed agencies or government sponsored enterprises. In addition, USNH investments may not exceed 5% of any institution’s total deposits or
20% of any institution’s net equity.
Cash equivalents represent amounts invested for the purpose of satisfying current operating liabilities and include repurchase agreements, money
market funds and other mutual funds. Repurchase agreements are limited to overnight investments only. Short-term investments are highly liquid
amounts held to support specific current liabilities. Cash, cash equivalents and short-term investments are generally uninsured and uncollateralized
against custodial credit risk, and the related mutual funds are not rated. Cash and cash equivalents totaled $85.7 million and short-term
investments totaled $130.4 million at June 30, 2021.
The components of cash, cash equivalents and short-term investments are summarized below ($ in thousands):
Level 1 Level 2 Total Weighted Average Maturity
Cash balance $42,166 $42,166 Less than 1 year
Repurchase agreements $4,845 4,845 Less than 1 year
Money market funds 76,896 76,896 Less than 1 year
Domestic equity 795 795 Less than 1 year
Mutual funds 91,407 91,407 1-5 years
U.S. government and agencies, other 38 38 1-5 years
Total cash, cash equivalents and short-term investments $211,264 $4,883 $216,147
USNH’s investment policy and guidelines specify permitted instruments, duration and required ratings for pooled endowment funds. The policy
and guidelines are intended to mitigate risk on investments individually and in the aggregate while maximizing total returns and supporting
intergenerational equity of spending levels. Illiquid investments are limited to 20% of the USNH consolidated endowment pool. Credit risk is
mitigated by due diligence in the selection and continuing review of investment managers as well as diversification of both investment managers
and underlying investments. Except in unusual circumstances, no more than 15% of total portfolio assets may be invested in any one actively
managed strategy. If an investment manager is retained to manage more than one strategy, that manager will be limited to 20% of total portfolio
assets. Passively managed investment strategies will not be limited within the portfolio; however, any one manager of passive strategies will be
C-50
66 l NEW HAMPSHIRE
limited to 20% of total portfolio assets. Any manager positions exceeding these limits will be reviewed by the Finance Committee for Investments
and this committee will decide the appropriate course of action to bring active manager exposures back in line with the concentration limit. Private
global equity investments are limited to 20% of the endowment pool. No USNH endowment investments were denominated in foreign currencies
as of June 30, 2021.
Endowment and similar investments are reported at estimated fair value in accordance with the following hierarchy. For investments classified in
Level 1, the fair value is based on quoted prices (unadjusted) in active markets for identical assets that are accessible at the measurement date.
Investments classified in Level 2 consist of investments that have valuations based on inputs other than quoted prices that are observable for an
asset either directly or indirectly. For investments classified in Level 3 the fair value is based on unobservable inputs for an asset.
In determining fair value of investment assets, USNH utilizes valuation techniques that maximize the use of observable inputs and minimize the
use of unobservable inputs to the extent possible. As a practical expedient to estimate the fair value of USNH’s interests, certain investments in
commingled funds and limited partnerships are reported at the net asset value (NAV) determined by the respective fund managers, without
adjustment when assessed as reasonable by USNH, unless it is probable that all or a portion of the investment will be sold for an amount different
from NAV. Because these investments are not readily marketable, their estimated fair values may differ from the values that would have been
assigned had a ready market for such investments existed, and such differences could be material. As of June 30, 2021, USNH had no plans or
intentions to sell such investments at amounts different from NAV. Investments reported at NAV as a practical expedient are not categorized in
the fair value hierarchy.
The following tables summarize USNH's investments by type (expressed in thousands):
Investments Classified in the Fair Value Investments
Hierarchy Measured at Total
Level 1 Level 2 Level 3 NAV
Endowment and similar investments - campuses
Money market $ 27,188 $ 27,188
Domestic equity 137,688 105,340 243,028
International equity 23,994 62,684 86,678
Global equity 10,851 10,851
Global fixed income 62,876 62,876
Inflation hedging assets 12,784 12,671 25,455
Hedge funds:
Fund of Funds 2,009 2,009
Event-Driven 70,436 70,436
Equity Hedge 43,887 43,887
Distressed/Restructuring 21,319 21,319
Private equity & non-marketable real assets 68,977 68,977
Funds held in trust 19,725 19,725
Total endowment and similar investments - campuses 264,530 19,725 398,174 682,429
Endowment and similar investments - affiliated entities
Money market 12,399 12,399
Domestic equity 19,815 59,346 79,161
International equity 9,825 44,043 53,868
Global equity 569 26,760 27,329
Global fixed income 16,771 3,017 4,292 24,080
Inflation hedging assets 4,311 6,313 10,624
Hedge funds:
Equity Hedge 30,549 30,549
Distressed/Restructuring 39,918 39,918
Diversified 7,251 7,251
Private equity & non-marketable real assets 33,639 33,639
Total endowment and similar investments - affiliated 63,690 9,330 4,292 241,506 318,818
entities
Total endowment and similar investments $ 328,220 $ 29,055 $4,292 $ 639,680 $ 1,001,247
The majority of USNH’s investments are units of institutional commingled funds and limited partnerships invested in equity, fixed income, hedge,
natural resources, private equity, or real estate strategies. Hedge strategies involve funds whose managers have the authority to invest in various
asset classes at their discretion, including the ability to invest long and short. Funds with hedge strategies generally hold securities or other
financial instruments for which a ready market exists and may include stocks, bonds, put or call options, swaps, currency hedges and other
instruments which are valued by the investment manager. To the extent quoted prices exist the manager would use those; when these are not
available, other methodologies maximizing observable inputs would be used for the valuation, such as discounted cash flow analysis, capitalization
of current or stabilized net operating income, replacement costs, or sales contracts and recent sales comparable in the market. Private equity funds
employ buyout, growth, venture capital and distressed security strategies. Real asset funds generally hold interests in private real estate. As of June
30, 2021, fixed income securities had maturities up to 7 years and carried ratings ranging from AAA to Baa3. The mutual fund investments held in
the endowment pools are not rated.
C-51
NEW HAMPSHIRE l 67
As of June 30, 2021, USNH had 1 equity hedge fund and 1 global fixed income fund in a lock-up period set to expire in nine months. As of June
30, 2021, UNHF had one year lock up periods for three of its funds, one global equity and two of its hedge funds. Fixed income, private equity
and real estate funds classified as illiquid have no ability to be redeemed at this time. For USNH, of the 36 funds classified as illiquid, 11 are
currently in liquidation; 1 is expected to start liquidation within the next year; 18 are expected to start liquidation in 2 to 15 years, and 6 currently
have no expected liquidation dates. For UNHF, 16 funds are classified as illiquid and are expected to be liquidated over the next 1 to 10 years.
As of June 30, 2021, USNH has one outstanding investment liquidation request which has been limited by the respective fund managers. USNH’s
estimated fair values of these investments at June 30, 2021 are $50,000. It is uncertain when, or if, the funds will be fully collected at the NAV
recorded.
Unfunded commitments with various private equity and similar alternative investment funds totaled $42.4 million for USNH and $17.9 million for
UNHF at June 30, 2021.
3. RECEIVABLES AND OTHER RECEIVABLES-RESTRICTED
The following is a breakdown of receivables at June 30, 2021 (expressed in thousands):
Governmental Business-Type Major
Activities Activities Total Component Unit
Short-Term Receivables
Taxes:
Meals and Rooms $ 48,285 $ 48,285
Business Taxes 328,013 328,013
Tobacco 33,144 33,144
Real Estate Transfer 21,765 21,765
Interest & Dividends 34,610 34,610
Communications 3,553 3,553
Utility Property Tax 19,900 19,900
Gasoline Road Toll 10,971 10,971
Subtotal 500,241 500,241
Other Receivables:
Turnpike System $ 89,814 89,814
Liquor Commission 7,315 7,315
Lottery Commission 6,175 6,175
Unemployment Trust Fund 161,515 161,515
Internal Service Fund 15,311 15,311
Federal Grants 486,871 486,871 $ 22,983
Local Grants 31,727 31,727
Miscellaneous 55,727 55,727 7,530
Short Term Portion Of SRF Loans Receivable 27,731 27,731
Short Term Portion Of Note/Pledge Receivable 4,291
Subtotal 589,636 292,550 882,186 34,804
Total Current Receivables (Gross) 1,089,877 292,550 1,382,427 34,804
Long-Term Receivables
SRF Loans Receivable 475,698 475,698
Other Loan Receivable 29,695 167 29,862
Note/Pledge Receivable 18,043
Total Long Term Receivables (Gross) 29,695 475,865 505,560 18,043
Allowance for Doubtful Accounts (65,454) (164,442) (229,896) (6,065)
Total Receivables (Net) $ 1,054,118 $ 603,973 $ 1,658,091 $ 46,782
State Revolving Fund (SRF):
Business-type activities include loans made under a program with the U.S. Environmental Protection Agency to improve cleanliness and potability
of the State’s water supplies. The SRF lends funds to municipalities and qualified private water organizations for the purpose of constructing
wastewater and drinking water treatment facilities. The loans, based on specific federal criteria, may allow for forgiveness of portions of the
principal. Amounts recorded as principal forgiveness totaled approximately $9.1 million for the year ended June 30, 2021.
C-52
68 l NEW HAMPSHIRE
4.CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2021, was as follows (expressed in thousands):
Beginning Balance Increases Decreases Ending Balance
Governmental Activities:
Capital Assets not being depreciated:
Land & Land Improvements $ 576,483 $ 11,554 $ (1,058) $ 586,979
Construction in Progress 253,937 111,297 (221,242) 143,992
Work in Progress Computer Software 16,863 9,259 (14,189) 11,933
Total Capital Assets not being depreciated 847,283 132,110 (236,489) 742,904
Other Capital Assets:
Equipment & Computer Software 538,129 54,622 (16,160) 576,591
Buildings & Building Improvements 1,018,167 40,234 (302) 1,058,099
Land Improvements 126,595 5,746 132,341
Infrastructure 4,085,797 170,176 (1,620) 4,254,353
Total Other Capital Assets 5,768,688 270,778 (18,082) 6,021,384
Less accumulated depreciation for:
Equipment & Computer Software (420,244) (57,306) 16,092 (461,458)
Buildings & Building Improvements (506,838) (29,149) 166 (535,821)
Land Improvements (104,315) (2,132) (106,447)
Infrastructure (2,259,400) (61,154) 751 (2,319,803)
Total Accumulated Depreciation (3,290,797) (149,741) 17,009 (3,423,529)
Other Capital Assets, Net 2,477,891 121,037 (1,073) 2,597,855
Governmental Activities Capital Assets, Net $ 3,325,174 $ 253,147 $ (237,562) $ 3,340,759
Business-Type Activities:
Turnpike System:
Capital Assets not being depreciated:
Land & Land Improvements $ 102,069 $ 102,069
Construction in Progress 34,933 17,164 (5,400) 46,697
Capital Assets not being depreciated 137,002 17,164 (5,400) 148,766
Other Capital Assets:
Equipment & Computer Software 75,667 6,818 (23,531) 58,954
Buildings & Building Improvements 17,876 211 18,087
Land Improvements 2,003 2,003
Infrastructure 1,169,760 6,523 (172) 1,176,111
Total Other Capital Assets 1,265,306 13,552 (23,703) 1,255,155
Less accumulated depreciation for:
Equipment (61,520) (5,720) 23,419 (43,821)
Buildings & Building Improvements (3,904) (464) (4,368)
Land Improvements (599) (100) (699)
Infrastructure (404,425) (22,975) 98 (427,302)
Total Accumulated Depreciation (470,448) (29,259) 23,517 (476,190)
Turnpike Capital Assets, Net $ 931,860 $ 1,457 $ (5,586) $ 927,731
Liquor:
Capital Assets not being depreciated:
Land $ 1,984 $ 1,984
Construction In Progress 106 341 (41) 406
Work In Progress Computer Software 14,465 4,487 (1,013) 17,939
Total Capital Assets not being depreciated 16,555 4,828 (1,054) 20,329
Other Capital Assets:
Equipment 10,924 162 (888) 10,198
Buildings & Building Improvements 48,996 2,360 (316) 51,040
Land Improvements 743 33 776
Total Other Capital Assets 60,663 2,555 (1,204) 62,014
Less accumulated depreciation for:
Equipment (9,115) (1,135) 853 (9,397)
Buildings & Building Improvements (15,832) (1,736) 228 (17,340)
Land Improvements (593) (10) (4) (607)
Total Accumulated Depreciation (25,540) (2,881) 1,077 (27,344)
Liquor Capital Assets, Net $ 51,678 $ 4,502 $ (1,181) $ 54,999
Lottery Commission:
Land & Buildings 2,999 2,999
Equipment 717 103 820
Less Accumulated Depreciation for Land & Buildings: (100) (77) (177)
Less Accumulated Depreciation for Equipment: (632) (24) (656)
Lottery Capital Assets, Net $ 2,984 $ 2 $ 2,986
C-53
NEW HAMPSHIRE l 69
Current period depreciation expense was charged to functions of the primary government as follows (expressed in thousands):
Governmental Activities:
General Government $ 15,278
Administration of Justice and Public Protection 24,996
Resource Protection and Development 4,703
Transportation 77,491
Health and Social Services 27,054
Education 219
Total Governmental Activities Depreciation Expense $ 149,741
The State possesses certain capital assets that have not been capitalized and depreciated. These assets include works of art and historical treasures
such as statues, monuments, paintings and miscellaneous capitol-related artifacts and furnishings. These collections meet all of the following
criteria:
A.Held for public exhibition, education, or research in furtherance of public service, rather than financial gain.
B.Protected, kept unencumbered, cared for, and preserved.
C.Subject to an organizational policy that requires the proceeds from the sales of collection items to be used to acquire other items for the
collection.
Major Component Unit: The following is a rollforward of Capital Assets for the University System of New Hampshire (expressed in thousands):
Beginning Balance Additions Deletions Ending Balance
Land and Land Improvements $ 17,962 $ (2,706) $ 15,256
Building and Building Improvements 1,858,870 49,096 (7,721) 1,900,245
Equipment 152,326 10,259 (1,929) 160,656
Construction in Progress 66,152 43,208 (49,096) 60,264
Subtotal 2,095,310 102,563 (61,452) 2,136,421
Less: Accumulated Depreciation (975,385) (68,861) 9,265 (1,034,981)
Total $ 1,119,925 $ 33,702 $ (52,187) $ 1,101,440
Contractual Obligations for major construction projects totaled approximately $66.0 million at June 30, 2021.
5. LONG-TERM DEBT
PRIMARY GOVERNMENT
Bonds/Notes Authorized and Unissued: Bonds/Notes authorized and unissued amounted to $573.1 million at June 30, 2021. The proceeds of
the bonds/notes will be applied to the following funds when issued (expressed in millions):
Capital Projects Fund $ 224.1
Federal Highway/Garvees 298.8
Turnpike System 50.2
Total $ 573.1
Turnpike System: The Legislature has established a 10-year highway construction and reconstruction plan for the Turnpike System to be funded
from Turnpike revenues. This legislation also authorized the Treasurer with the approval of the Governor and Executive Council to issue up to
$766.0 million of bonds to support this project. The State has issued $715.8 million of revenue bonds for these projects.
Advance Refunding: The following is a summary of general obligation bonds and revenue bonds defeased by the primary government. The
proceeds from each advance refunding issue were placed in an irrevocable trust to provide for all future debt service payments on the old bonds.
Accordingly, the trust account assets and the liability for the defeased bonds are not included in the State's financial statements (expressed in
thousands):
Amount Outstanding at
Date of Advance Refunding June 30, 2021
Governmental Fund Types (General Obligation Bonds):
November 30, 2016 $12,775
Subtotal $12,775
C-54
70 l NEW HAMPSHIRE
Bond/Note Issuances:
Effective July 1, 2014, Chapter 17 of the Laws of 2014 and as amended by Chapter 276:210 and 276:211, Laws of 2015, authorized the use of a
$0.042 cent increase in motor vehicle fuel fees (referred to as a ‘road toll’ in New Hampshire laws) to fund $200 million in general obligation
bonds or revenue bonds, or both, to complete the I-93 Salem to Manchester widening project. Subsequent legislation specifically authorized a
Federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan as an alternative to a traditional general obligation bond issue
including, without limitation, a pledge of the revenue collected from adjustments under RSA 260:32-a for rates that exceed $0.18 per gallon less
required distributions under RSA 235:23, I, on said revenues.
The State, through the State Treasurer and the NH Department of Transportation (Department) was approved for a TIFIA loan in May of 2016.
The TIFIA loan resulted in $200.0 million of funding at a favorable 1.09% interest rate that will allow the Department to perform additional bridge
repair and pavement maintenance and completion of the I-93 project within the time frame of the law. This increase under Chapter 17 of the Laws
of 2014, as amended, will expire once all debt service payments for the I-93 project have been made or 20 years after the initial issuance of such
bonds, whichever is earlier. As of June 30, 2021, $196.2 million of TIFIA proceeds had been received under this arrangement, representing a
long-term note payable. This compares to $174.9 million as of June 30, 2020. The TIFIA obligation is payable on an interest-only basis initially,
with principal payments beginning in 2025. A final principal payment schedule will be established once all proceeds have been drawn against the
loan. Interest paid during the fiscal year ended June 30, 2021 was $2.0 million.
The TIFIA loan agreement also requires that the State expend certain annual amounts of the increased road toll revenues on non-federally aided
highway projects in the State. In the event, the State does not meet these requirements the interest rate on the loan will increase to 2.17% until the
spending requirements are met. In addition, the TIFIA loan agreement provides for a default rate of interest equal to 3.09%.
The State issued $2.3 million General Obligation Capital Improvement Bonds, 2020 Series A (Series B Bonds”) on August 18, 2020. The 2020
Series B Bonds were issued through a private placement with the New Hampshire Municipal Bond Bank (NHMBB). The NHMBB purchased the
Series B Bonds to use as an investment in its required debt service reserve fund. The Series B Bonds are structured to pay interest every six
months with two maturities, $0.3 million on 8/15/2029 and the second and final maturity on 8/15/2040. The State uses the proceeds to fund its
ongoing capital program while benefiting from a reduced cost of capital compared to that of a conventional “new money” issue. This transaction
resulted in a net true interest cost of 1.55%.
The State issued $47.2 million General Obligation Capital Improvement Bonds, 2020 Series C through a competitive sale on December 15, 2020
that closed on December 22, 2020, of which $45.7 million was for governmental activities and $1.5 million was for Liquor projects. This sale
resulted in an overall true-interest-cost (TIC) to the State of 1.59% with coupons ranging from 1.00% to 5.00% and with final maturity on
12/01/2040. The proceeds of these bonds will be used to fund all or part of various capital projects of the State.
Also on December 15, 2020 the State issued two separate series of refunding bonds. The first was a tax exempt current refunding issuance of $49.5
million General Obligation Refunding Bonds, 2020 Series D which were issued to refinance a total of $60.3 million in previously issued and
currently outstanding bonds at an overall true-interest-cost (TIC) to the State of .45% and achieving present value savings of just over $4.7 million
or 7.8% of the refunded bonds. Directly following that sale, the State issued taxable advance refunding bonds, $37.6 million General Obligation
Refunding Bonds, Series E (Federally Taxable ) of which $36.1 million was for governmental activities and $1.5 million was for Liquor projects,
to advance refund $35.6 million of previously issued and currently outstanding bonds ($34.1 million of governmental activities and $1.5 million of
Liquor projects) at an overall true-interest-cost (TIC) to the State of .23% and achieving present value savings of nearly $6.7 million or 18.8% of
the refunded bonds. Both refunding series closed on December 22, 2020. Neither refunding extended maturities beyond the refunded bonds. In
the aggregate, these refinancings produced savings of approximately $10.8 million over ten years with the majority coming in the first two years,
specifically $2.1 million in state fiscal year 2021 and $8.7 million in state fiscal year 2022.
The State does not have any other debt arrangements that need to be disclosed regarding direct placement debt or other debt related to (1) lines of
credit, (2) assets pledged as collateral, (3) terms specified in debt agreements related to significant (a) events of default with financial
consequences, (b) termination events with financial consequences, (c ) subjective acceleration clauses.
C-55
NEW HAMPSHIRE l 71
Changes in Long-Term Liabilities: The following is a summary of the changes in the long-term liabilities as reported by the primary
government during the fiscal year (expressed in thousands):
Beginning Ending
Governmental Activities Balance Increases Decreases Balance Current Non-Current
General Obligation Bonds Payable $ 649,839 $ 131,263 $ 174,323 $ 606,779 $ 67,804 $ 538,975
Direct Placement Bonds Payable 29,564 2,270 31,834 1,295 30,539
Federal Highway Grant Anticipation Bonds 90,800 15,000 75,800 14,400 61,400
Premium on Bonds 91,166 25,839 14,575 102,430 102,430
Notes Payable 174,917 21,321 196,238 196,238
Compensated Absences 97,530 2,842 1,604 98,768 10,944 87,824
Claims Payable 48,678 305,984 303,600 51,062 30,451 20,611
Net Pension Liability 897,841 370,212 94,314 1,173,739 1,173,739
Other Postemployment Benefits Payable 1,703,228 388,115 3,537 2,087,806 2,087,806
Pollution Remediation Obligation 72,460 8,478 2,247 78,691 16,206 62,485
Capital Lease 16,925 2,527 2,552 16,900 3,705 13,195
Federal Highway Administration Liability 27,846 27,846 8,000 19,846
Total Governmental $ 3,872,948 $ 1,286,697 $ 611,752 $ 4,547,893 $ 152,805 $ 4,395,088
Business-Type Activities
Turnpike System
Revenue Bonds $ 317,692 $ 27,482 $ 290,210 $ 26,285 $ 263,925
Pollution Remediation Obligation 4,867 111 626 4,352 269 4,083
Compensated Absences 1,234 33 47 1,220 135 1,085
Claims Payable 2,337 315 728 1,924 627 1,297
Other Postemployment Benefits Payable 22,734 8,138 1,221 29,651 29,651
Net Pension Liability 10,559 3,868 937 13,490 13,490
Total $ 359,423 $ 12,465 $ 31,041 $ 340,847 $ 27,316 $ 313,531
Liquor Commission
General Obligation Bonds Payable $ 38,590 $ 1,582 $ 3,078 $ 37,094 $ 3,460 $ 33,634
Capital Lease 93 93
Compensated Absences 2,342 131 2,211 245 1,966
Claims Payable 2,945 1,833 1,050 3,728 905 2,823
Other Postemployment Benefits Payable 49,734 11,349 2,751 58,332 58,332
Net Pension Liability 23,464 9,684 2,153 30,995 30,995
Total $ 117,168 $ 24,448 $ 9,256 $ 132,360 $ 4,610 $ 127,750
Lottery Commission
Compensated Absences $ 588 $ 540 $ 431 $ 697 $ 70 $ 627
Claims Payable 2 1 1 2 2
Mortgage Loan Payable 2,815 111 2,704 115 2,589
Other Postemployment Benefits Payable 12,438 2,640 822 14,256 14,256
Net Pension Liability 3,835 1,944 375 5,404 5,404
Total $ 19,678 $ 5,125 $ 1,740 $ 23,063 $ 187 $ 22,876
State Revolving Fund Programs
General Obligation Bonds Payable $ 11,227 $ 2,072 $ 9,155 $ 2,072 $ 7,083
Compensated Absences Payable 1,219 111 1,108 167 941
Other Postemployment Benefits Payable 5,214 2,520 129 7,605 7,605
Net Pension Liability 5,722 2,361 525 7,558 7,558
Total $ 23,382 $ 4,881 $ 2,837 $ 25,426 $ 2,239 $ 23,187
Total Business-Type $ 519,651 $ 46,919 $ 44,874 $ 521,696 $ 34,352 $ 487,344
The General Fund and Highway Fund are primarily responsible for financing governmental activities long-term liabilities other than debt.
Bond and Revenue Anticipation Notes: In general, the State Treasurer, with the approval of the Governor and Council, is authorized to issue
bond anticipation notes maturing within five years of their dates of issue. Refunding notes must be paid within five years of the dates of issue of
the original notes. Also, to the extent monies in the General Fund, Highway Fund, or Fish and Game Fund are at any time insufficient for the
payment of obligations payable from such funds, the State Treasurer, under the direction of the Governor and Council, is authorized to issue notes
to provide funds to pay such obligations. Outstanding revenue anticipation notes issued for the General Fund may not exceed $200 million; for the
Highway Fund, $15 million; and for the Fish and Game Fund, $0.5 million. As of June 30, 2021, the State had no bond or revenue anticipation
notes outstanding.
Pollution Remediation Obligations: Under the federal Superfund law, the State is responsible for sharing remediation costs at sites where the
U.S. Environmental Protection Agency expends superfund trust monies for cleanup. Currently there are several sites in various stages of cleanup,
from initial assessment to cleanup activities. In addition, the State has other sites for which it is responsible for cleanup and monitoring, including
C-56
72 l NEW HAMPSHIRE
underground fuel storage facilities. Per GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations,
pollution liabilities of $78.7 million and $4.4 million were reported for governmental activities and business-type activities, respectively, at June
30, 2021. These liabilities were measured using the actual contract cost, where no changes in cost are expected, or a method that is materially
close to the expected cash flow technique. Liability estimates are subject to change due to price increases or reductions, technology, or changes in
applicable laws or regulations governing the remediation efforts. The State does not anticipate recovering reimbursements from the parties who
caused the pollution.
Debt Maturity: All bonds issued by the State, except for Turnpike revenue bonds as well as Federal Highway Grant Anticipation Bonds and
TIFIA note payable, are general obligation bonds, which are backed by the full faith and credit of the State. Interest rates on these issues range
from 2.0% to 7.2%. Debt service payments on “self supporting” debt are funded by reimbursements from component units for debt issued by the
State on their behalf and through user fees and other revenues statutorily earmarked to fund debt service payments on specific projects. The
anticipated source of repayment and annual maturities including expected federal interest subsidies described earlier are as follows (expressed in
thousands):
SOURCE OF PRINCIPAL PAYMENTS DEBT SERVICE
Governmental Activities Business-Type Activities TOTAL ALL FUNDS
Liquor Turnpike
Commission SRF Funds System
Less:
Federal Federal
Payable June General Direct Highway Highway Self General General Interest
30, Fund Placement Fund (GARVEE) Supporting Total Obligations Obligations Revenue Principal Interest Subsidy Net Total
2022 $ 50,436 1,295 $ 9,628 $ 14,400 $ 7,740 $ 83,499 $ 3,460 $ 2,072 $ 26,285 $ 115,316 $ 46,246 $ 4,926 $ 156,636
2023 52,059 9,543 14,790 6,981 83,373 3,498 2,072 21,650 110,593 40,046 4,360 146,279
2024 48,550 9,753 15,145 7,066 80,514 2,867 557 18,795 102,733 35,582 3,724 134,591
2025 44,775 10,067 15,530 7,144 77,516 2,668 557 12,840 93,581 30,888 3,073 121,396
2026 35,895 2,300 9,101 15,935 6,944 70,175 2,548 557 9,465 82,745 26,769 2,461 107,053
2027-2031 131,290 11,230 28,968 24,992 196,480 10,846 1,671 55,735 264,732 88,395 8,718 344,409
2032-2036 56,726 11,604 13,214 3,907 85,451 8,037 1,669 56,205 151,362 42,265 5,137 188,490
2037-2041 25,093 5,405 5,927 980 37,405 3,170 58,510 99,085 12,415 1,367 110,133
2042-2046 12,300 12,300 497 12,797
Subtotal 444,824 31,834 96,201 75,800 65,754 714,413 37,094 9,155 271,785 1,032,447 323,103 33,766 1,321,784
Unamortized
(Discount) /
Premium 100,230 2,200 102,430 18,425 120,855 120,855
Total $ 545,054 $ 34,034 $ 96,201 $ 75,800 $ 65,754 $816,843 $ 37,094 $ 9,155 $ 290,210 $ 1,153,302 $323,103 $ 33,766 $ 1,442,639
Revenue Bond Resolutions: Turnpike System revenue bonds are secured by a pledge of substantially all Turnpike System revenues and monies
deposited into accounts created by the bond resolutions, subject only to the payment of operating expenses.
The bond resolutions require the Turnpike System to establish and collect tolls which are adequate at all times, when combined with other
available sources of revenues, to provide for the proper operation and maintenance of the Turnpike System and for the timely payment of the
principal and interest on all bonds, notes, or other evidences of indebtedness. The resolutions further require the Turnpike System to collect
sufficient tolls so that in each fiscal year net revenues as defined by the resolutions will be at least equal to the greater of: (a) 120% of current year
debt service on the revenue bonds, or (b) 100% of current year debt service on the revenue bonds and on all general obligation or other bonds,
notes or other indebtedness, and the additional amount, if any, required to be paid from the revenue bond general reserve account to satisfy the
Renewal & Replacement (R&R) requirement for the fiscal year.
The resolutions further require the Turnpike System to request payment from the Revenue Bond Construction Account and an Authorized Officer
shall sign a written order and file the request with the State Treasurer.
The Turnpike System is required to review the adequacy of its tolls after each fiscal year. If this review indicates that the tolls and charges are, or
will be, insufficient to meet the requirements described above, then the Independent Engineer of the Turnpike System will make a study and
recommend a schedule of tolls and charges which will provide revenues sufficient to comply with the requirements described above. For fiscal
year 2021, the toll rate schedule was deemed to be sufficient to meet all required payments in connection with the Turnpike System, and as such,
no Independent Engineer’s study was necessary.
The resolutions establish an R&R requirement with respect to each fiscal year. R&R costs consist of rehabilitation, renewals, replacements, and
extraordinary repairs necessary for the sound operation of the Turnpike System or to prevent loss of revenues, but not costs associated with new
construction, additions or extensions. Total R&R costs for fiscal year 2021 were $20.3 million, of which $9.0 million were recorded as current year
expenses and $11.3 million were capitalized.
Management believes the Turnpike System has complied with all of its material financial bond covenants as set forth in the resolutions.
C-57
NEW HAMPSHIRE l 73
MAJOR COMPONENT UNIT
Changes in Long-Term Liabilities: The University System of New Hampshire's long-term liabilities include: Revenue Bonds Payable of $406.3
million; capital lease obligations of $5.4 million; deferred obligations interest swaps of $22.3 million; accrued employee benefits and compensated
absences of $71.4 million; other postemployment benefits of $86.0 million; and other liabilities of $32.9 million (expressed in thousands):
Beginning Ending
Increases Decreases Current Long-Term
Balance Balance
University System of NH $614,096 $86,910 $76,622 $624,384 $81,816 $542,568
* Current portion includes $8.3 million reported as accounts payable.
Debt Maturity: The table below is a summary of the annual principal payments and total debt service relating to the debt of the University
System of New Hampshire and includes revenue bonds and capital leases (expressed in thousands):
UNIVERSITY SYSTEM OF N.H.
Payable June 30, Principal Interest Total
2022 28,760 15,320 44,080
2023 23,902 14,277 38,179
2024 24,598 13,350 37,948
2025 25,675 12,381 38,056
2026 18,986 11,472 30,458
2027-2031 95,106 45,916 141,022
2032-2036 99,785 25,571 125,356
2037-2041 40,555 9,870 50,425
2042-2046 28,065 3,528 31,593
2047 1,695 26 1,721
Subtotal 387,127 151,711 538,838
Unamortized Discounts/Premium, net 24,551 24,551
Total $411,678 $151,711 $563,389
6. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES
The components of deferred outflows and inflows of resources in the government-wide financial statements related to the primary government at
June 30, 2021 are as follows (expressed in thousands):
Governmental Business-Type Primary
Activities Activities Government
Deferred outflows of resources:
Pension related amounts:
New Hampshire Retirement System $ 308,014 $ 16,007 $ 324,021
New Hampshire Judicial Retirement Plan 6,933 6,933
Total pension related amounts 314,947 16,007 330,954
OPEB related amounts:
Trusted OPEB Plan 10,411 10,411
Non Trusted OPEB Plan 299,483 18,333 317,816
Total OPEB related amounts 309,894 18,333 328,227
Loss on refunding of debt, net 8,631 315 8,946
Total deferred outflows of resources $ 633,472 $ 34,655 $ 668,127
Deferred inflows of resources:
Pension related amounts:
New Hampshire Retirement System $ (40,702) $ (3,580) $ (44,282)
New Hampshire Judicial Retirement Plan (4,643) (4,643)
Total pension related amounts (45,345) (3,580) (48,925)
OPEB related amounts:
Trusted OPEB Plan (675) (675)
Non Trusted OPEB Plan (463,579) (33,163) (496,742)
Total OPEB related amounts (464,254) (33,163) (497,417)
Total deferred inflows of resources $ (509,599) $ (36,743) $ (546,342)
C-58
74 l NEW HAMPSHIRE
The components of deferred inflows of resources related to the governmental funds at June 30, 2021 are as follows (expressed in thousands):
Total Governmental
General Highway Education Funds
Deferred inflows of resources:
Taxes considered unavailable $ 177,389 $ 116,415 $ 293,804
Local assistance 18,576 18,576
Other loans 917 917
Indigent representation advances 851 851
Banking assessments 887 887
Miscellaneous fees & fines 1,036 1,306 2,342
Total deferred inflows of resources $ 199,656 $ 1,306 $ 116,415 $ 317,377
MAJOR COMPONENT UNIT
The University System of New Hampshire's deferred outflows and deferred inflows of resources at June 30, 2021 are as follows (expressed in
thousands):
Deferred outflows of resources: Deferred inflows of resources:
Accumulated decrease in fair value of hedging derivatives $22,280 Accounting gain on debt financing, net $100
Accounting loss on debt refinancing, net 6,585 Annuities unconditional remainder interest 2,161
Changes of assumptions: Changes of assumptions:
Operating Staff Retirement Plan 29 Operating Staff Retirement Plan 15
Postretirement Medical Plan 11,891 Postretirement Medical Plan 6,192
Additional Retirement Contribution Program 80 Additional Retirement Contribution Program 23
Net Difference between projected and actual earnings: Net Difference between projected and actual earnings:
Operating Staff Retirement Plan 124 Operating Staff Retirement Plan 697
Difference between expected and actual experience: Difference between expected and actual experience:
Postretirement Medical Plan 616 Operating Staff Retirement Plan 136
Benefit payments subsequent to the measurement date: Postretirement Medical Plan 1,734
Postretirement Medical Plan 2,965 Additional Retirement Contribution Program 288
Additional Retirement Contribution Program $675
Asset retirement obligations $1,218
Total deferred outflows of resources $46,463 Total deferred inflows of resources $11,346
7. RISK MANAGEMENT AND INSURANCE
The State is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to
employees; employee health benefits; and natural disasters.
Principle of Self-insurance
As a general operating rule, the State self-insures against all damages, losses and expenses except to the extent that provisions of law require the
purchase of commercial insurance or a risk assessment has indicated that commercial insurance is economical and beneficial for the State or the
general public. In such instances, the State may elect to purchase commercial insurance. There are approximately 26 such commercial insurance
programs in effect. These include, but are not exclusive to, state owned real property insurance, fleet automobile liability, watercraft insurance,
foster parent liability, ski area liability for Cannon Mountain, data security and privacy cyber liability insurance, and a fidelity and faithful
performance bond. In general, claims settled in the past three years under the insurance programs have not exceeded commercial insurance
coverage; however, one fleet claim was settled in excess of policy limits during fiscal year 2016. As of June 30, 2021, there are no outstanding
fleet claims that are currently expected to exceed the policy coverage. The State’s exposure per claimant is limited by law to a total of $475
thousand under RSA 541-B:14 and the State’s current fleet policy coverage is $250 thousand per claimant.
Employee and Retiree Health Benefits
During fiscal year 2004, the State established an Employee Benefit Risk Management Fund (the Fund), an internal service fund, to account for its
uninsured risks of loss related to employee and retiree health benefits. Currently, the State retains all of the risk associated with the self-funded
benefits, and utilizes an actuarially-established IBNR (incurred but not reported) claims reserve, which totaled $20.8 million as of June 30, 2021.
In addition, state law requires the Fund to maintain a reserve in the amount of at least 3% of estimated annual self-funded claims and
administrative costs, for unexpected costs. For fiscal year 2021, this reserve equaled $17.6 million for the Fund. The State maintains a reserve for
four plans in the Fund: Actives, Troopers, Retirees, and Dental. The Trooper plan is reported as part of the Active plan, however, the Trooper
component of the Active reserve amount represents 67% of the estimated annual claims and administrative expenses for the Trooper health plan
account due to its small member size (approximately 800 members), which equaled $2.9 million for fiscal year 2021. The Active (without
C-59
NEW HAMPSHIRE l 75
Trooper), Retiree, and Dental reserves totaled $10.4 million, $4.0 million, and $0.4 million, respectively. Outside of the Trooper component, the
Active, Retiree, and Dental accounts maintained a reserve of 5%, 5%, and 3%, respectively, of the estimated annual claims and administrative
expenses. Health and Dental Plan Rates are established annually, by actuaries, based on an analysis of past claims, State and other medical trend,
and annual projected plan claims and administrative expenses. The process used in estimating claim liabilities may not result in an exact payout
amount due to variables such as medical inflation, or changes in law, enrollment or plan design.
Workers' Compensation
Since February 2003, the State has been self-insured for its workers' compensation exposures, retaining all of the risk associated with workers'
compensation claims. The State utilizes an actuarial study that provides an annual estimate of the outstanding liabilities for the prior years’ claims.
The study also contains assumptions about loss development patterns, trends, and other claim projections based upon the State’s historical loss
experience. According to the fiscal year 2021 actuarial study, the Estimated Workers' Compensation Unpaid Loss and Allocated Loss Adjustment
Expense (ALAE), which comprises past claims, claim trends, and future estimated loss experience, is $32.8 million as of June 30, 2021.
The following table presents the changes in claim liabilities during the fiscal years ending June 30, 2020 and 2021 (expressed in thousands):
6/30/2019 6/30/2020 6/30/2021
Governmental Activities Balance Increases Decreases Balance Increases Decreases Balance Current Long-Term
Workers Compensation Claims Payable $ 29,436 $ 3,257 $ 4,899 $ 27,794 $ 6,847 $ 7,539 $ 27,102 $ 6,491 $ 20,611
Health Claims Payable* 23,152 269,151 271,419 20,884 299,137 296,061 23,960 23,960
Total 52,588 272,408 276,318 48,678 305,984 303,600 51,062 30,451 20,611
Business-Type Activities
Turnpike System
Workers Compensation Claims Payable 1,592 1,989 1,244 2,337 315 728 1,924 627 1,297
Total 1,592 1,989 1,244 2,337 315 728 1,924 627 1,297
Liquor Commission
Workers Compensation Claims Payable 2,485 970 510 2,945 1,833 1,050 3,728 905 2,823
Total 2,485 970 510 2,945 1,833 1,050 3,728 905 2,823
Lottery Commission
Workers Compensation Claims Payable 11 9 2 1 1 2 2
Total 11 9 2 1 1 2 2
Total Business-Type $ 4,088 $ 2,959 $ 1,763 $ 5,284 $ 2,149 $ 1,779 $ 5,654 $ 1,534 $ 4,120
* Health Claims Payable is recorded in the Internal Service Fund
8. INTERFUND RECEIVABLES AND PAYABLES
Due From or To Other Funds for the primary government on the fund financial statements represent amounts resulting from the time lag between
the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting
system, and (3) payments between funds are made, and consist of the following as of June 30, 2021 (expressed in thousands):
RECEIVABLES / DUE FROM AMOUNT PAYABLES / DUE TO AMOUNT
Highway Fund $ 1,151 Turnpike System $ 1,151
General Fund 7,999 Turnpike System 7,999
General Fund 8,013 Unemployment Compensation 8,013
General Fund 5,457 Liquor Commission 5,457
General Fund 28,467 Non-Major Fund 28,467
Non-Major Fund 3,432 Liquor Commission 3,432
Liquor Commission 80 General Fund 80
Turnpike System 1,424 General Fund 1,424
Turnpike System 2 Highway Fund 2
Turnpike System 223 Liquor Commission 223
Education Fund 2,117 Lottery Commission 2,117
Lottery Commission 400 Liquor Commission 400
Total $ 58,765 Total $ 58,765
The net due from or to other funds for the primary government has been reported as "internal balances" in the government-wide financial
statements. The governmental activities receivable of $26.7 million from business-type activities represents the "internal balances" amount on the
statement of net position. The $28.5 million between governmental funds, and the $0.6 million between enterprise funds has been eliminated on
the government-wide financial statements.
C-60
76 l NEW HAMPSHIRE
9. INTERFUND TRANSFERS
Interfund transfers during the current fiscal year were as follows (expressed in thousands):
Transfer to
Total Total
General Highway Education Non-Major Governmental Unemployment Enterprise
Transferred From Fund Fund Fund Funds Funds Compensation Funds Total
Governmental Funds
General Fund $ 43,247 $ 1,639 $ 44,886 $ 44,886
Coronavirus Relief 50,000 50,000 50,000
Highway Fund 3,275 3,275 3,275
Education Fund 1,173 1,173 1,173
Non-Major Funds 6,513 6,513 6,513
Total Governmental Funds 10,961 43,247 1,639 55,847 * 50,000 50,000 105,847
Proprietary - Enterprise Funds
Liquor Commission 182,451 182,451 182,451
Lottery Commission 144,237 144,237 144,237
Unemployment Compensation 23,097 23,097 23,097
Turnpike
Total Proprietary - Enterprise Funds $205,548 $ 144,237 $ 349,785 $ 349,785
* These amounts have been eliminated within governmental activities on the government-wide financial statements
The following transfers represent sources of funding identified through the State’s operating budget:
◦ Transfer of Lottery Commission profits of $144.2 million to fund education
◦ Transfer of Liquor Commission profits of $163.9 million to the General Fund for government operations, $10.0 million to the General
Fund pursuant to RSA 176:16, III for the Alcohol Abuse Prevention and Treatment Fund and $8.5 million pursuant to RSA 126-AA:3,
IV for the Granite Advantage Health Care Fund.
Pursuant to RSA 260:60, $1.0 million of unrefunded gas tax in the Highway Fund was transferred to the General Fund.
Transfer of OHRV license fees of $6.5 million to the General Fund for Natural and Culture Resources from Fish & Game Fund.
Transfer of Unemployment Compensation Contingency Fund of $23.1 million to the General Fund.
Pursuant to RSA 186-C:18, $1.2 million was transferred from the Education Trust fund to the General Fund.
Consistent with HB 3, funding of $36.2 million from the General Fund was transferred to support the Highway Fund and $2.3 million was
transferred from the Highway Fund to the General Fund.
In October 2020 the Governor authorized $50 million of CARES Act Relief Funds to be transferred into the Unemployment Compensation fund,
in order to stabilize that fund going forward.
Transfer of General Fund appropriations of $7.0 million to the Highway Fund for Federal Highway Administration repayment.
10. CONTRACTUAL COMMITMENTS
Contractual Commitments: The State Department of Transportation has estimated its share of contractual obligations for construction contracts
to be $77.2 million at June 30, 2021. This represents total obligations of $207.6 million less $130.4 million in estimated federal aid.
Other Contractual Commitments: Encumbrances by fund for the State at June 30, 2021, excluding contractual commitments noted above, were
as follows:
Expressed in Millions
General Fund $ 104.5
Highway Fund 8.5
Non-Major Governmental Funds 0.2
$ 113.2
C-61
NEW HAMPSHIRE l 77
11. EMPLOYEE BENEFIT PLANS
NEW HAMPSHIRE RETIREMENT SYSTEM
Plan Description: The New Hampshire Retirement System is the administrator of a cost-sharing multiple-employer Public Employee Retirement
System ("NHRS") established in 1967 by RSA 100-A:2 and is qualified as a tax-exempt organization under Sections 401 (a) and 501 (a) of the
Internal Revenue Code. NHRS is a contributory defined-benefit plan providing service, disability, death, and vested retirement benefits to
members and beneficiaries. NHRS covers substantially all full-time State employees, public school teachers and administrators, permanent
firefighters, and police officers within the State of New Hampshire. Full-time employees of political subdivisions, including counties,
municipalities, and school districts, are also eligible to participate as a group if the governing body of the political subdivision has elected
participation. NHRS is divided into two membership groups. Group I consists of State and local employees and teachers. Group II consists of
firefighters and police officers. All assets are in a single trust and are available to pay retirement benefits to its members and beneficiaries.
Group I members at age 60 (age 65 for members beginning service on or after July 1, 2011) qualify for a normal service retirement allowance
based on years of creditable service and average final compensation (AFC). The yearly pension amount is 1/60 (1.667%) of average final
compensation multiplied by years of creditable service (1/66 of AFC times creditable service for members beginning service on or after July 1,
2011). AFC is defined as the average of the three highest salary years for members vested as of January 1, 2012 and five years for members not
vested as of January 1, 2012. At age 65, the yearly pension amount is recalculated at 1/66 (1.515%) of AFC multiplied by years of creditable
service.
Members in service with 10 or more years creditable service who are between age 50 and 60 or members in service with at least 20 or more years
of service, whose combination of age and service is 70 or more, are entitled to a retirement allowance with appropriate graduated reduction based
on years of creditable service.
Group II members who are age 60, or members who are at least age 45 with a minimum of 20 years of creditable service (age 50 with a minimum
of 25 years of creditable service or age 60 for members beginning service on or after July 1, 2011) can receive a retirement allowance at a rate of
2.5% of AFC for each year of service not to exceed 40 years (2% of AFC times creditable service up to 42.5 years for members beginning service
on or after July 1, 2011). A member who began service on or after July 1, 2011 shall not receive a service retirement allowance until attaining age
52.5, but may receive a reduced allowance after age 50 if the member has at least 25 years of creditable service. However, the allowance will be
reduced by ¼ of one percent for each month prior to age 52.5 that the member receives the allowance.
Group II members hired prior to July 1, 2011 who have non-vested status as of January 1, 2012 are subject to graduated transition provisions for
years of service required for regular service retirement, the minimum age for service retirement, and the multiplier used to calculate the retirement
annuity, which shall be applicable on January 1, 2012.
Members of both groups may qualify for vested deferred allowances, disability allowances, and death benefit allowances subject to meeting
various eligibility requirements. Benefits are based on AFC or earnable compensation, service, or both.
Pursuant to RSA 100-A:52, RSA 100-A:52-a and RSA 100-A:52-b, NHRS also provides a postretirement medical premium subsidy for Group I
employees and teachers and Group II police officers and firefighters.
NHRS issues publicly available financial reports that can be obtained by writing to them at 54 Regional Drive, Concord, NH 03301-8507 or from
their web site at http://www.nhrs.org
Funding Policy: NHRS is financed by contributions from the members, the State and local employers, and investment earnings. By statute,
Group I members contributed 7.0% of gross earnings. Group II firefighter members contributed 11.80% of gross earnings and group II police
officers contributed 11.55% of gross earnings. Employer contributions required to cover that amount of cost not met by the members’
contributions are determined by a biennial actuarial valuation by the NHRS actuary using the entry age normal funding method and are expressed
as a percentage of gross payroll. The State contributed 10.88% of gross payroll for Group I members, 26.43% of gross payroll for Group II
firefighter members, and 24.77% of gross payroll for Group II police officer members.
The State's required and actual contributions for the year ended June 30, 2021 were $94.8 million, which included an amount for other
postemployment benefits of $9.5 million.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions:
As of June 30, 2021, the State reported a liability of $1,192.5 million for its proportionate share of the net pension liability of NHRS. This net
pension liability is measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2019, with update procedures used to roll the total pension liability forward to June 30, 2020. The State’s
proportion of the net pension liability was based on the State’s share of contributions to NHRS relative to the contributions of all participating
employers, actuarially determined. As of the measurement date, the State’s proportion was 18.64%, which was a decrease of 15 basis points from
its proportion measured as of the previous measurement date. For the year ended June 30, 2021, the State recognized total pension expense of
$166.1 million.
C-62
78 l NEW HAMPSHIRE
As of June 30, 2021, the State reported deferred outflows and inflows of resources on its government-wide financial statements related to pensions
in the primary government of $238.7 million (excluding $85.3 million in contributions subsequent to the measurement date) and $44.3 million,
respectively, from the following sources:
Deferred Deferred
(in thousands) Outflows of Inflows of
Resources Resources
Net difference between projected and actual earnings on
pension plan investments 73,755
Differences between expected and actual experience 32,203 (12,803)
Changes in assumptions 117,962
Changes in employer proportion 13,200 (29,896)
Changes in internal proportion 1,583 (1,583)
Contributions subsequent to the measurement date 85,318
Total $ 324,021 $ (44,282)
Amounts reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date
will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Remaining amounts reported as deferred outflows of
resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended June 30, Amount (in thousands)
2022 $32,211
2023 47,203
2024 61,118
2025 53,889
$194,421
Actuarial Assumptions: NHRS total pension liability, measured as of June 30, 2020, was determined by a roll forward of the actuarial valuation
as of June 30, 2019, for which the following actuarial assumptions were used:
Inflation 2.0%
Salary increases 5.6% average, including inflation
Investment rate of return 6.75%, net of pension plan investment expense, including inflation
Mortality rates were based on the Pub-2010 Healthy Retiree Mortality Tables with creditability adjustments for each group and projected fully
generational mortality improvements using Scale MP-2019.
The actuarial assumptions used in the June 30, 2019 valuation were based on the results of the most recent actuarial experience study, which was
for the period July 1, 2015 - June 30, 2019.
C-63
NEW HAMPSHIRE l 79
Long-Term Rates of Return: The long-term expected rate of return on pension plan investments was selected from a best estimate range
determined using the building block approach. Under this method, an expected future real return range is calculated separately for each asset
class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return net of
investment expenses by the target asset allocation percentage and by adding expected inflation. Following is a table presenting target allocations
and long-term rates of return for 2020:
Weighted average
long-term
expected geometric
real rate of return:
Target
Asset Class Allocation 2020
Large Cap Equities 22.50 % 3.71 %
Small/Mid Cap Equities 7.50 % 4.15 %
Total domestic equity 30.00 %
International Equities (unhedged) 13.00 % 3.96 %
Emerging International Equities 7.00 % 6.20 %
Total international equity 20.00 %
Core Bonds 9.00 % 0.42 %
Global Multi-Sector Fixed Income 10.00 % 1.66 %
Absolute return fixed income 6.00 % 0.92 %
Total fixed income 25.00 %
Private equity 10.00 % 7.71 %
Private debt 5.00 % 4.81 %
Total alternative investments 15.00 %
Real estate 10.00 % 2.95 %
Total real estate investments 10.00 %
Total 100.00 %
Discount Rate: The discount rate used to measure the collective total pension liability was 6.75%. The projection of cash flows used to
determine the discount rate assumed that member contributions will be made at the current contribution rate and that employer contributions will
be made at rates equal to the difference between actuarially determined contribution rates and the member rate. For purposes of the projection,
member contributions and employer service cost contributions are determined based on the expected payroll of current members only. Employer
contributions are determined based on NHRS's actuarial funding policy and as required by RSA 100-A:16. Based on those assumptions, NHRS’s
fiduciary net position was projected to be available to make all projected future benefit payments to current members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine total pension liability.
The following table illustrates the sensitivity of the State’s proportionate share of NHRS’s net pension liability to changes in the discount rate. In
particular, the table presents the State’s proportionate share of NHRS’s net pension liability measured at June 30, 2020 assuming it was calculated
using a single discount rate that is one-percentage-point lower or one-percentage-point higher than the single discount rate (in millions):
1% Decrease to Current single rate 1% Increase to
5.75% assumption 6.75% 7.75%
$1,543.8 $1,192.5 $905.4
C-64
80 l NEW HAMPSHIRE
Pension Allocations: The Statewide amounts for net pension liability, deferred outflows of resources, deferred inflows of resources, and pension
expense detailed above were allocated among governmental and business-type activities based on each reporting unit’s share of the Statewide
employer contribution to NHRS. Pension-related amounts for each reporting unit are as follows (expressed in thousands):
State
Governmental Turnpike Liquor Lottery Revolving Business-type Primary
Activities System Commission Commission Fund Activities Government
Proportionate share of Statewide amount 95.19 % 1.13 % 2.60 % 0.45 % 0.63 % 4.81 % 100.00 %
Net pension liability $ 1,135,038 $ 13,490 $ 30,995 $ 5,404 $ 7,558 $ 57,447 $ 1,192,485
Pension expense 158,221 1,589 4,416 734 1,105 7,844 166,065
Deferred outflows of resources representing
contributions subsequent to the measurement
date 81,254 916 2,198 411 539 4,064 85,318
Deferred outflows of resources representing the
changes in employer proportion 12,564 149 343 60 84 636 13,200
Deferred outflows of resources representing the
net difference between projected and actual
earnings on pension plan investments 70,203 834 1,917 334 467 3,552 73,755
Deferred outflows of resources representing
changes in assumptions 112,278 1,335 3,066 535 748 5,684 117,962
Deferred outflows of resources representing the
differences between expected and actual
experience 30,652 364 837 146 204 1,551 32,203
Deferred inflows of resources representing the
differences between expected and actual
experience (12,187) (144) (333) (58) (81) (616) (12,803)
Deferred inflows of resources representing the
changes in employer proportion (28,455) (338) (777) (136) (190) (1,441) (29,896)
Deferred outflows of resources representing
change in proportion within the entity 1,063 168 66 214 72 520 1,583
Deferred inflows of resources representing change
in proportion within the entity (60) (1,191) (143) (142) (47) (1,523) (1,583)
Amortization of deferred amounts:
2022 31,142 (14) 747 105 231 1,069 32,211
2023 45,370 81 1,219 227 306 1,833 47,203
2024 58,250 564 1,602 326 376 2,868 61,118
2025 51,296 546 1,408 295 344 2,593 53,889
Total 186,058 1,177 4,976 953 1,257 8,363 194,421
Sensitivity analysis:
Net pension liability at 5.75% discount rate 1,469,412 17,463 40,126 6,996 9,784 74,369 1,543,781
Net pension liability at 7.75% discount rate 861,810 10,242 23,534 4,103 5,739 43,618 905,428
JUDICIAL RETIREMENT PLAN
Plan Description: The New Hampshire Judicial Retirement Plan (NHJRP), a single-employer plan, was established on January 1, 2005 pursuant
to RSA 100-C:2 and is intended for all time to meet the requirements of a qualified pension trust within the meaning of section 401(a) and to
qualify as a governmental plan within the meaning of section 414(d) of the United States Internal Revenue Code. NHJRP is a defined benefit plan
providing disability, death, and retirement protection for full-time supreme court, superior court, district court or probate court judges employed
within the State. Information and financial reports of the New Hampshire Judicial Retirement Plan can be obtained by writing to them at 54
Regional Drive, Concord, NH 03301, or from the State's website at http://www.nh.gov.
Members covered by benefit terms: As of December 31, 2020, the following members were covered by the benefit terms:
Inactive members or beneficiaries currently receiving benefits 76
Inactive members entitled to but not yet receiving benefits 2
Active or vested members 56
Total members 134
The NHJRP is administered by an appointed Board of Trustees (Board), separate from the New Hampshire Retirement System. The Board
consists of 7 members, 2 of which are appointed by the Governor and Council and 1 of whom the Governor shall designate to serve as chairman of
the Board of Trustees, and who shall be qualified persons with business experience and not members of NHJRP. The Chief Justice of the state
supreme court shall appoint 3 trustees, at least 2 of whom shall be active members of NHJRP and one of whom may be a retired member of
NHJRP. One member of the state senate and one member of the house of representatives shall be appointed biennially. Certain daily
administrative functions of NHJRP have been delegated by the Board to the New Hampshire Retirement System such as retirement request
C-65
NEW HAMPSHIRE l 81
processing, member record maintenance and serving as the NHJRP’s information center. The NHJRP has one employee. All employer and
member contributions are deposited into separate trust funds that are managed and controlled by the Board of Trustees of the NHJRP.
Any member of the NHJRP who has at least 10 years of creditable service and who is at least 65 years old is entitled to retirement benefits equal to
75% of the member’s final year’s salary. Any member who has at least 7 years of creditable service and who is at least 70 years old is entitled to
retirement benefits equal to 45% of the member’s final year’s salary. A member who is at least 70 years old shall be granted an additional 10%
over the 45% level for each year of creditable service that a member has over 7 years. A member who is at least 60 years old with at least 15 years
of creditable service is entitled to 70% of the member’s final year’s salary, plus an additional 1% for each year of additional service in excess of 15
years. However, under no circumstances shall any retirement benefit exceed 75% of the member’s final year’s salary. For purposes of
determining the above benefit, the member’s final salary is equal to compensation earned in the prior 12-month period in which the employee was
a member of the plan.
Funding Policy: The NHJRP is financed by contributions from the members and the State. Pursuant to Chapter 311, Laws of 2003, on January 19,
2005, the State issued $42.8 million of general obligation bonds in order to fund the NHJRP’s initial unfunded accrued liability. All eligible judges
are required to contribute 10% of their salaries to the NHJRP until they become eligible for a service retirement equal to 75% of their final year’s
salary. The State was required to and contributed 41% of the members’ salary through June 30, 2013. Effective July 1, 2013 the State was required
to and contributed 64.5% of the member's salary. The State's required contribution rate was 75.4% of the member's salary for the period July 1,
2017 through June 30, 2019. Effective July 1, 2019, the State's required contribution rate was 69.4% of the member's salary. For the year ended
June 30, 2021, State contributions to the NHJRP totaled $6.5 million.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions: As of
June 30, 2021, the State reported a net pension liability of $38.7 million for the NHJRP. The NHJRP’s net pension liability was measured as of
December 31, 2020. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1,
2018. Changes in the components of net pension liability for the measurement period ended December 31, 2020 are as follows (in thousands):
Changes in Net Pension Liability
Increase (Decrease)
Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
(a) (b) (a) - (b)
Balances as of December 31, 2019 $102,253 $65,186 $37,067
Changes for the year:
Service cost 4,333 4,333
Interest on total pension liability 6,872 6,872
Effect of differences between expected and actual experience 1,154 1,154
Effect of changes in actuarial assumptions 4,477 4,477
Benefit payments (7,396) (7,396)
Employer contributions 6,652 (6,652)
Member contributions 830 (830)
Net investment income 7,999 (7,999)
Administrative expenses (279) 279
Balances as of December 31, 2020 $111,693 $72,992 $38,701
For the year ended June 30, 2021, the State recognized pension expense of $6.4 million for the NHJRP. As of June 30, 2021, the State reported
deferred outflows and inflows of resources on its government-wide financial statements related to the NHJRP of $4.0 million (excluding $3.0
million in contributions subsequent to the measurement date) and $4.6 million, respectively, from the following sources (in thousands):
Deferred Outflows Deferred Inflows
of Resources of Resources
Net difference between projected and actual earnings on $ (4,643)
pension plan investments
Net difference between expected and actual experience 814
Change in assumptions 3,160
Contributions subsequent to the measurement date 2,959
Total $ 6,933 $ (4,643)
C-66
82 l NEW HAMPSHIRE
Amounts reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date
will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended June 30, Amount (in thousands)
2022 $ 309
2023 1,104
2024 (1,351)
2025 (731)
$ (669)
Actuarial Assumptions: The total pension liability in the January 1, 2018 actuarial valuation was determined using the following actuarial
assumptions:
Inflation 2.75%
Salary increases 2.25%
Investment rate of return 6.50%
Mortality rates were based on the PubG-2010 Mortality table with generational projection per the MP Ultimate scale as of January 1, 2020.
The actuarial assumptions used in the January 1, 2018 valuation were not based on the results of a recent actuarial experience study. The Plan has
not had a formal actuarial experience study performed since one performed for the period July 1, 2005 - June 30, 2010.
Long-Term Rates of Return: The long-term expected rate of return on NHJRP investments was selected from a best estimate range determined
by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. Following is a table
presenting target allocations and long-term rates of return for 2020:
Long-Term Expected
Asset Class Target Allocation Geometric Real Rate of
Return
Cash 1.000 % 0.87 %
Core Fixed Income 37.000 % 2.18 %
U.S. REITs 2.500 % 3.42 %
Large Cap US Equities 31.000 % 3.33 %
Small Cap US Equities 4.000 % 3.91 %
International equity 15.500 % 4.70 %
Alternatives 9.000 % 3.03 %
Discount Rate: The single discount rate used to measure the collective total pension liability was 6.50%, which is the same rate used for the prior
year measurement of total pension liability. The projection of cash flows used to determine the discount rate assumed that plan member
contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between
actuarially determined contribution rates and the member rate. Based on those assumptions, the NHJRP’s fiduciary net position was projected to
be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension
plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
The following table illustrates the sensitivity of the NHJRP’s net pension liability to changes in the discount rate. In particular, the table presents
the net pension liability of NHJRP, calculated using the discount rate of 6.50%, as well as what the NHJRP’s net pension liability would be if it
were calculated using a discount rate that is 1 percentage point lower (5.50%) or 1 percentage point higher (7.50%) than the current discount rate
(expressed in thousands):
Current
1% Decrease 1% Increase
Discount Rate
5.50% 7.50%
6.50%
$49,246 $38,701 $29,919
C-67
NEW HAMPSHIRE l 83
OTHER POSTEMPLOYMENT BENEFITS
General Information about the Trusted OPEB Plan
Plan Description: Pursuant to RSA 100-A:52, RSA 100-A:52-a and RSA 100-A:52-b, NHRS administers a cost-sharing multiple employer
defined benefit postemployment medical subsidy healthcare plan designated in statute by membership type. This plan has been previously defined
as the Trusted OPEB plan but is also commonly referred to as “medical subsidy plan”. The membership groups are Group II Police Officers and
Firefighters and Group I State Employees.
NHRS issues publicly available financial reports that can be obtained by writing to them at 54 Regional Drive, Concord, NH 03301-8507 or from
their web site at http://www.nhrs.org
Benefits Provided: The Trusted OPEB Plan provides a medical insurance subsidy to qualified retired members. The medical subsidy is a
payment made by NHRS to the former employers of its members, or their insurance administrator, toward the cost of health insurance for a
qualified retiree, spouse, and certifiably dependent children with a disability who is living in the household and being cared for by the retiree.
Under specific conditions, the qualified beneficiaries of members who die while in service may also be eligible for the medical subsidy. The
eligibility requirements for receiving Trusted OPEB Plan benefits differ for Group I and Group II members. Eligibility for the medical subsidy
payment is determined by the relevant RSA’s, however, the medical subsidy plan is closed to new entrants. The State is a recipient of these
medical subsidy payments on behalf of its former employees.
Contributions: Pursuant to RSA 100-A:16, III, and the biennial actuarial valuation, funding for the medical subsidy payment is via the
employer contribution rates set forth by NHRS. Employer contributions required to cover that amount of cost not met by the members’
contributions are determined by a biennial actuarial valuation by the NHRS actuary using the entry age normal funding method and are expressed
as a percentage of gross payroll. The State contributed 1.05% of gross payroll for Group I members, 3.66% of gross payroll for Group II
firefighter members, and 3.66% of gross payroll for Group II police officer members. Employees are not required to contribute to the Trusted
OPEB Plan.
The State Legislature has the authority to establish, amend and discontinue the contribution requirements of the medical subsidy plan. Employer
contributions made by the State to NHRS for the medical subsidy component amounted to $9.5 million in fiscal year 2021 and $9.3 million in
fiscal year 2020.
OPEB Liabilities, OPEB Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At June 30, 2021, the State reported a liability of $86.9 million for its proportionate share of the net Trusted OPEB Plan liability. The net Trusted
OPEB Plan liability was measured as of June 30, 2020, and the total Trusted OPEB Plan liability used to calculate the net Trusted OPEB Plan
liability was determined by an actuarial valuation as of June 30,2019 and rolled forward to June 30, 2020, utilizing procedures incorporating the
actuarial assumptions. The State’s proportion of the net Trusted OPEB Plan liability was based on the projection of the State’s long-term share of
contributions to the Trusted OPEB Plan relative to the projected contributions of all participating entities, actuarially determined. As of the
measurement date, the State’s proportionate share was 19.85 percent. For the year ended June 30, 2021, the State recognized OPEB expense of
$5.4 million.
As of June 30, 2021, The State reported deferred outflows and inflows of resources on its government-wide financial statements related to OPEB
in the primary government of $0.9 million (excluding $9.5 million in contributions subsequent to the measurement date) and $0.7 million,
respectively, from the following sources.
(in thousands) Deferred Outflows Deferred Inflows
of Resources of Resources
Net difference between projected and actual earnings on
pension plan investments $ 325
Differences between expected and actual experience $ (252)
Changes in employer proportion (423)
Changes in assumptions $ 559
Contributions subsequent to the measurement date 9,527
Total $ 10,411 $ (675)
C-68
84 l NEW HAMPSHIRE
Amounts reported as deferred outflows of resources related to the Trusted OPEB resulting from employer contributions subsequent to the
measurement date will be recognized as a reduction of the net Trusted OPEB Plan liability in the year ended June 30, 2022. Remaining amounts
reported as deferred outflows of resources and deferred inflows of resources related to Trusted OPEB Plan will be recognized in OPEB expense as
follows:
Year ended June 30, Amount (in thousands)
2022 $(91)
2023 96
2024 115
2025 89
$209
Actuarial Assumptions: The total Trusted OPEB Plan liability, measured as of June 30, 2020, was determined by a roll forward of the actuarial
valuation as of June 30, 2018, for which the following actuarial assumptions were used:
Inflation 2.0%
Salary increases 5.6% average, including inflation
6.75%, net of OPEB plan investment expense, including inflation
Investment rate of return for determining solvency contributions
Healthcare cost trend rates N/A - benefits are fixed cash stipends
Mortality rates were based on the Pub-2010 Healthy Retiree mortality tables credibility adjustments for each group (Police and Fire combined) and
projected fully generational mortality improvements using Scale MP-2019.
The actuarial assumptions used in the June 30, 2019 valuation were based on the results of the most recent actuarial experience study, which was
for the period July 1, 2015 - June 30, 2019.
Long-Term Rates of Return: The long-term expected rate of return on Trusted OPEB plan investments was selected from a best estimate range
determined using the building block approach. Under this method, an expected future real return range is calculated separately for each asset
class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return net of
investment expenses by the target asset allocation percentage and by adding expected inflation. Following is a table presenting target allocations
and long-term rates of return for 2020:
Weighted average
long-term
expected geometric
real rate of return:
Asset Class Target Allocation 2020
Large Cap Equities 22.50 % 3.71 %
Small/Mid Cap Equities 7.50 % 4.15 %
Total domestic equity 30.00 %
International Equities (unhedged) 13.00 % 3.96 %
Emerging International Equities 7.00 % 6.20 %
Total international equity 20.00 %
Core Bonds 9.00 % 0.42 %
Global Multi-Sector Fixed Income 10.00 % 1.66 %
Absolute return fixed income 6.00 % 0.92 %
Total fixed income 25.00 %
Private equity 10.00 % 7.71 %
Private debt 5.00 % 4.81 %
Total alternative investments 15.00 %
Real estate 10.00 % 2.95 %
Total real estate investments 10.00 %
Total 100.00 %
Discount Rate: The discount rate used to measure the collective total Trusted OPEB Plan liability was 6.75%. The projection of cash flows used
to determine the discount rate assumed that member contributions will be made at the current contribution rate and that employer contributions will
be made at rates equal to the difference between actuarially determined contribution rates and the member rate. For purposes of the projection,
C-69
NEW HAMPSHIRE l 85
member contributions and employer service cost contributions are determined based on the expected payroll of current members only. Employer
contributions are determined based on actuarial funding policy and as required by RSA 100-A:16. Based on those assumptions, the Trusted OPEB
Plan’s fiduciary net position was projected to be available to make all projected future benefit payments to current members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine total Trusted OPEB
Plan liability.
The following table illustrates the sensitivity of the State’s proportionate share of the net Trusted OPEB Plan liability to changes in the discount
rate. In particular, the table presents the State’s proportionate share of the Trusted OPEB Plan liability measured at June 30, 2020 assuming it was
calculated using a single discount rate that is one-percentage-point lower or one-percentage-point higher than the single discount rate (in
thousands):
1% Decrease to Current single 1% Increase to
5.75% rate assumption 7.75%
6.75%
$ 94,344 $ 86,882 $ 80,402
General Information about the Non Trusted OPEB Plan
Plan Description: RSA 21-I:30 specifies that the State provide certain health care benefits for retired employees and their spouses through a single
employer (primary government with component units) defined benefit postemployment benefit plan, previously defined as the Non Trusted OPEB
Plan. These benefits include group hospitalization, hospital medical care, surgical care and other medical care. Substantially all of the State’s
employees who were hired on or before June 30, 2003 and have 10 years of service, may become eligible for these benefits if they reach normal
retirement age while working for the State and receive their pensions on a periodic basis rather than a lump sum. During fiscal year 2004,
legislation was passed that requires State Group I employees hired on or after July 1, 2003 to have 20 years of state service in order to qualify for
health benefits. During fiscal year 2011, legislation was passed that requires Group II employees to have 20 years of State service to qualify for
retiree health benefits. Additionally, during fiscal year 2012, legislation was passed requiring Group I employees hired after July 1, 2011 to have
25 years of state service and increased the normal retirement age for Group I and Group II employees hired after July 1, 2011. These and similar
benefits for active employees and retirees are authorized by RSA 21-I:30 and provided through the Employee and Retiree Benefit Risk
Management Fund, previously defined as the Fund, a single-employer group health fund, which is the state’s self-insurance internal service fund
for active state employees and retirees. The Fund covers the cost of medical and prescription drug claims by charging actuarially developed
working rates to State agencies for participating employees, retirees and eligible spouses. An additional major source of funding for retiree benefits
is from the medical subsidy payment described earlier, which totaled approximately $10.6 million, $11.0 million and $11.4 million, respectively,
for the fiscal years ended June 30, 2021, 2020 and 2019. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement
75.
Employees covered by benefit terms: As of December 31, 2018 the following employees were covered by the benefit terms:
Retired members and beneficiaries currently receiving benefits 12,396
Retired employees entitled to but not yet receiving benefit payments 463
Active employees 10,374
23,233
Total OPEB Liability
The primary government’s proportionate share of the total Non Trusted OPEB Plan liability of $2,110.1 million was measured as of June 30, 2020,
and was determined by an actuarial valuation as of December 31, 2018, adjusted forward. The primary government’s proportionate share of the
total Non Trusted OPEB Plan liability is the ratio attributable to each fund/component unit based on each participant’s calculated liability. As of
the measurement date, the primary government’s proportion was 94.83%, which was a decrease from 94.85% as of the previous measurement date.
Changes in the total OPEB Liability: The total OPEB liability at June 30, 2021 is $2,225.9 million of which the primary government's
proportionate share is $2,110.1 million.
Total OPEB
(dollars in thousands)
Liability
Balance at 6/30/19 $ 1,795,462
Changes for the year:
Service cost 62,882
Interest 64,137
Differences between expected and actual experience (10,282)
Changes in assumptions 358,302
Benefit payments (44,600)
Net changes 430,439
Balance at 6/30/20 $ 2,225,901
C-70
86 l NEW HAMPSHIRE
Actuarial Assumptions and other inputs: The total Non Trusted OPEB Plan liability in the December 31, 2018 actuarial valuation was deter-
mined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.75%
Group I employees: 14.75% decreasing over 12 years to an ultimate level of 3.25% Group II employees:
Salary increases 27.75% decreasing over 8 years to an ultimate level of 4.25% (Police) and 3.75% (Fire)
Discount rate 2.21% as of June 30, 2020
Medical: Non-Medicare: -17.05% for one year, 17.20% for one year and then 5.5% decreasing by 0.25%
each year to an ultimate level of 4.5% per year. Medicare: -12.2% for one year then 4.5% per year. First-year
Healthcare cost trend rates Medicare medical trend reflects known Medicare Advantage rate guarantees through 2020
Prescription Drug: Non-Medicare: -12.17% for one year, 3.30% for one year then 7.50% decreasing by 0.25%
each year to an ultimate level of 4.5% per year. Medicare: 9.75% for one year, 6.20% for one year then 6.50%
decreasing by 0.25% each year to an ultimate level of 4.5% per year.
Contributions: Retiree contributions for 2020 were adjusted based on actual working rate changes and are
expected to increase with a blended medical and prescription drug trend.
The discount rate was based on the yield or index rate for 20-year, tax exempt general obligation municipal bonds with an average rate of AA/ Aa
or higher as shown in the Bond Buyer 20-Bond General Obligation Index. This determination is in accordance with GASB Statement No 75.
Other changes in assumptions reflect 1) the discount rate was decreased to 2.21%, 2) the trend assumptions were revised to reflect known changes
in claims experience, 3) the demographic and salary increase assumptions were updated consistent with the NHRS 4-year Experience Study July 1,
2015 through June 30, 2019, with the exception of using the headcount-weighted mortality tables rather than the amount-weighted mortality
tables , 4) the projection of the excise tax on high cost health plans was removed as the tax was repealed effective December 20, 2019.
Mortality rates were based on the PubG-2010 Headcount-Weighted Employee/Healthy Retiree General Mortality Tables for Group I and the
PubS-2010 Headcount-Weighted Employee/Healthy Retiree Safety Mortality Tables for Group II projected generationally for males and females
with Scale MP-2019 and the PubNS-2010 Headcount-Weighted Non-Safety Disabled Retiree Mortality Table for Group I and the PubS-2010
Headcount- Weighted Safety Disabled Retiree Mortality Table for Group II projected generationally for males and females with Scale MP-2019.
The assumptions used in the December 31, 2018 valuation were based on the results of an actuarial experience study by New Hampshire
Retirement System for the period July 1, 2015 through June 30, 2019.
Sensitivity of the total Non Trusted OPEB Plan liability to changes in the discount rate:
The following presents sensitivity of the primary government’s proportionate share of the total Non Trusted OPEB Plan liability to changes in the
discount rate. In particular, the table presents the primary government’s proportionate share of the Total Non Trusted OPEB Plan liability
measured at June 30, 2020 if it were calculated using a discount rate that is one-percentage-point lower or one-percentage-point higher than the
current discount rate (in thousand):
1% Decrease Current Discount Rate 1% Increase
$2,529,886 $2,110,767 $1,782,988
Sensitivity of the total Non Trusted OPEB Plan liability to changes in the healthcare cost trend rates:
The following presents sensitivity of the primary government’s proportionate share of the total Non Trusted OPEB Plan liability to changes in the
healthcare cost trend rates. In particular, the table presents the primary government’s proportionate share of the total Non Trusted OPEB Plan
liability measured at June 30, 2020, if it were calculated using healthcare cost trend rates that are one-percentage-point lower or one-percentage-
point higher than the current healthcare trend cost rates (in thousands):
1% Decrease Current Trend Rate 1% Increase
$1,732,936 $2,110,767 $2,609,104
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2021, the primary government recognized OPEB expense of $(14.9) million. As of June 30, 2021, the primary
government reported deferred outflows and inflows of resources on its government-wide financial statements related to the Non Trusted OPEB
Plan of $282.1 million (excluding $35.7 million in contributions subsequent to the measurement date) and $496.7 million, respectively, from the
following sources:
Deferred Outflows Deferred Inflows
(in thousands) of Resources of Resources
Differences between expected and actual experience $ (27,881)
Changes in assumptions 271,815 (460,423)
Changes in employer proportion 10,323 (8,438)
Contributions subsequent to the measurement date 35,678
Total $ 317,816 $ (496,742)
C-71
NEW HAMPSHIRE l 87
Amounts reported as deferred outflows of resources related to the Non Trusted OPEB Plan resulting from employer contributions subsequent to
the measurement date will be recognized as a reduction of the total Non Trusted OPEB Plan liability in the year ended June 30, 2022. Remaining
amounts reported as deferred outflows of resources and deferred inflows of resources related to the Non Trusted OPEB Plan will be recognized in
OPEB expense as follows:
Year ended June 30, Amount (in thousands)
2022 $ (135,389)
2023 (135,390)
2024 (9,922)
2025 66,097
$ (214,604)
OPEB Allocations: The Statewide amounts for the total Non Trusted OPEB Plan liability, deferred outflows or resources, deferred inflows of
resources, and OPEB expense detailed above were allocated among governmental activities, business-type activities, and component units based
on each reporting unit’s share of the participants within the Non Trusted OPEB Plan. OPEB related amounts for each reporting unit are as follows
(expressed in thousands):
State
Governmental Turnpike Liquor Lottery Revolving Business-type Primary
Activities System Commission Commission Fund Activities Government
Proportionate share of Statewide amount 89.89 % 1.33 % 2.62 % 0.64 % 0.34 % 4.93 % 94.83 %
Total OPEB liability $ 2,000,924 $ 29,651 $ 58,332 $ 14,256 $ 7,605 $ 109,844 $2,110,768
OPEB expense (12,561) (627) (1,583) (536) 366 (2,380) (14,941)
Deferred outflows of resources
representing contributions subsequent to
the measurement date 33,821 501 986 241 129 1,857 35,678
Deferred outflows of resources
representing changes in assumptions 257,670 3,818 7,512 1,836 979 14,145 271,815
Deferred inflows of resources representing
changes in assumptions (436,461) (6,468) (12,724) (3,110) (1,660) (23,962) (460,423)
Deferred inflows of resources representing
the differences between expected and
actual experience (26,430) (392) (771) (188) (100) (1,451) (27,881)
Deferred outflows of resources
representing change in proportion within
the entity 7,992 852 1,479 2,331 10,323
Deferred inflows of resources representing
change in proportion within the entity (688) (2,086) (4,095) (1,569) (7,750) (8,438)
Amortization of deferred amounts:
2022 (126,742) (2,318) (4,911) (1,350) (68) (8,647) (135,389)
2023 (126,742) (2,319) (4,911) (1,350) (68) (8,648) (135,390)
2024 (7,778) (697) (1,284) (484) 321 (2,144) (9,922)
2025 63,345 1,058 1,028 153 513 2,752 66,097
Total (197,917) (4,276) (10,078) (3,031) 698 (16,687) (214,604)
Sensitivity analysis:
Total OPEB liability at -1% discount rate 2,398,234 35,538 69,914 17,086 9,114 131,652 2,529,886
Total OPEB liability at +1% discount rate 1,690,203 25,046 49,274 12,042 6,423 92,785 1,782,988
Total OPEB liability at - 1% healthcare cost
trend rates 1,642,756 24,343 47,890 11,704 6,243 90,180 1,732,936
Total OPEB liability at + 1% healthcare cost
trend rates $ 2,473,329 $ 36,651 $ 72,104 $ 17,621 $ 9,399 $ 135,775 $2,609,104
C-72
88 l NEW HAMPSHIRE
Community
Pease Development Community
Development Finance College System of Component Total
Authority Authority New Hampshire Units Government
Proportionate share of Statewide amount 0.34 % 0.02 % 4.81 % 5.17 % 100.00 %
Total OPEB liability $ 7,652 $ 346 $ 107,136 $ 115,134 $ 2,225,902
OPEB expense (13) (4) (1,332) (1,349) (16,290)
Deferred outflows of resources representing
contributions subsequent to the measurement date 129 6 1,811 1,946 37,624
Deferred outflows of resources representing changes in
assumptions 985 45 13,797 14,827 286,642
Deferred inflows of resources representing changes in
assumptions (1,669) (75) (23,370) (25,114) (485,537)
Deferred inflows of resources representing the
differences between expected and actual experience (101) (5) (1,415) (1,521) (29,402)
Deferred outflows of resources representing change in
proportion within the entity 1,015 5 388 1,408 11,731
Deferred inflows of resources representing change in
proportion within the entity (776) (11) (2,506) (3,293) (11,731)
Amortization of deferred amounts:
2022 (449) (23) (7,446) (7,918) (143,307)
2023 (449) (23) (7,446) (7,918) (143,308)
2024 (71) (4) (1,285) (1,360) (11,282)
2025 423 9 3,071 3,503 69,600
Total (546) (41) (13,106) (13,693) (228,297)
Sensitivity analysis:
Total OPEB liability at -1% discount rate 9,171 414 128,409 137,994 2,667,880
Total OPEB liability at +1% discount rate 6,464 292 90,499 97,255 1,880,243
Total OPEB liability at - 1% healthcare cost trend rates 6,282 284 87,959 94,525 1,827,461
Total OPEB liability at + 1% healthcare cost trend rates 9,459 427 132,430 142,316 2,751,420
Summary of Employee Benefit Plans:
State University of Non-Major
(Expressed in Governmental Turnpike Liquor Lottery Revolving Business-type New Component Component
Thousands) Activities System Commission Commission Fund Activities Hampshire Units Units
Pension
New Hampshire
Retirement System $ 1,135,038 $ 13,490 $ 30,995 $ 5,404 $ 7,558 $ 57,447 $ 74,546 $ 74,546
New Hampshire
Judicial Retirement
Plan 38,701
Net Pension Liability $ 1,173,739 $ 13,490 $ 30,995 $ 5,404 $ 7,558 $ 57,447 $ 74,546 $ 74,546
OPEB
Trusted OPEB Plan $ 86,882 $ 4,712 $ 4,712
Non Trusted OPEB Plan 2,000,924 29,651 58,332 14,256 7,605 109,844 115,134 115,134
Other * 80,797 80,797
Post Employment
Benefits Payable $ 2,087,806 $ 29,651 $ 58,332 $ 14,256 $ 7,605 $ 109,844 $ 80,797 $ 119,846 $ 200,643
* Does not include short term portion of OPEB classified as other current liabilities on the Statement of Net Position
C-73
NEW HAMPSHIRE l 89
Summary of Employee Benefit Plans Expense:
State University of Non-Major
(Expressed in Governmental Turnpike Liquor Lottery Revolving Business-type New Component Component
Thousands) Activities System Commission Commission Fund Activities Hampshire Units Units
Pension Expense
New Hampshire
Retirement System 158,221 1,589 4,416 734 1,105 7,844 6,898 6,898
New Hampshire
Judicial Retirement
Plan 6,355
Pension Expense 164,576 1,589 4,416 734 1,105 7,844 6,898 6,898
OPEB Expense
Trusted OPEB Plan 5,428 368 368
Non Trusted OPEB Plan (12,561) (627) (1,583) (536) 366 (2,380) (1,349) (1,349)
Other (5,108) (5,108)
Post Employment
Benefits Expense (7,133) (627) (1,583) (536) 366 (2,380) (5,108) (981) (6,089)
12.CONTINGENT AND LIMITED LIABILITIES
PRIMARY GOVERNMENT
Nonexchange Financial Guarantees: The State of New Hampshire extends nonexchange financial guarantees to municipalities, political
subdivisions, and certain Authorities indefinitely within certain statutory limits. Guarantees may include, but not be limited to, bonds sold by
municipalities and school districts, first mortgages on industrial and recreational property, as well as airport and development projects.
Arrangements for the State to recover payments is described in the enabling statutes or in agreements authorized by the Governor and Executive
Council. Based on the review of qualitative factors and available historical data relative to the financial position of guaranteed entities, the State
determined that it is less than likely the State would have to make payments related to the nonexchange guarantees extended. The following table
includes the composition of the State's $66.7 million of financial guarantees outstanding and statutory limits as of June 30, 2021 (expressed in
thousands):
June 30, 2021
Guarantee Remaining
RSA Limit Capacity Principal Interest Total
Municipalities and Political Subdivisions
Water Pollution Bonds 485-A:7 $ 50,000 $50,000
School Construction Bonds 195-C:2 95,000 79,788 13,095 2,117 15,212
Solid Waste Bonds 149-M:31 10,000 10,000
Super Fund Site Cleanup Bonds 33:3-f 20,000 * 20,000
Related Organizations
Business Finance Authority (BFA) - Unified Contingent Credit Limit 162-A:22 115,000 * 63,534 51,307 159 51,466
Business Finance Authority (BFA) - Additional State Guarantee Laws of 2019 CH 346 30,000 30,000
Pease Development Authority - Guarantees for Loans 12-G:31 70,000 13,900
Housing Finance Authority - Child Care Loans 204-C:79 300 300
Totals $ 390,300 $ 267,522 $ 64,402 $ 2,276 $ 66,678
* Plus Interest
C-74
90 l NEW HAMPSHIRE
13. LEASE COMMITMENTS
OPERATING LEASES
The State has lease commitments for equipment and space requirements which are accounted for as operating leases. Rental expenditures for fiscal
year 2021 for governmental activities and business-type activities were approximately $24.2 million and $10.3 million, respectively. The leases
for space, which are subject to continuing appropriation, extend forward a number of years and may contain rent escalation clauses and renewal
options. The following is a schedule of future minimum space rental payments required under operating leases that have initial or remaining
noncancellable lease terms in excess of one year as of June 30, 2021 (expressed in thousands):
Payable Governmental Business-Type
June 30, Activities Activities
2022 $10,402 $8,431
2023 6,628 8,509
2024 5,960 8,286
2025 5,324 7,511
2026 4,070 6,082
2027-2031 7,099 19,195
2032-2036 14,360
2037-2041 9,441
2042-2046 1,511
Total $39,483 $83,326
CAPITAL LEASES
The State has entered into lease agreements as lessee for financing the acquisition of buildings and equipment. These leases qualify as capital
leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments. The future
minimum lease payments and the net present value of those payments at June 30, 2021 are as follows (expressed in thousands):
Payable Governmental
June 30, Activities
2022 $ 3,705
2023 3,374
2024 3,112
2025 2,779
2026 2,402
2027-2031 5,845
Total 21,217
Amount Representing Interest (4,317)
Present Value of Minimum Lease Payments $ 16,900
The assets acquired through capital leases and included in capital assets at June 30, 2021 include the following (expressed in thousands):
Governmental
Activities
Equipment $ 5,042
Buildings & Building Improvements 18,152
Total 23,194
Less: Accumulated Depreciation (4,854)
Net $ 18,340
C-75
NEW HAMPSHIRE l 91
14. TAX ABATEMENTS
For financial reporting purposes, a tax abatement is defined as an agreement between the government and an individual or entity through which the
government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to the
economic development or otherwise benefit the government or its citizens. The State has conducted an analysis of tax abatement programs that
meet the definition for disclosure, which are described below.
As a result of the statutory deadline of December 15th for the current fiscal year tax credit reporting, the state has elected to disclose tax credit
amounts and number of applicable taxpayers for the previous fiscal year. Fiscal year 2021 credits reported for the existing programs and any
newly established tax credit programs are not expected to have a material impact on the state’s financial position.
Economic Revitalization Zone Tax Credit (ERZTC) (RSA 162-N:7)
Description: The authority to enter into Community Reinvestment and Opportunity (CROP) Zone Credit Agreements became effective July 1,
2003. The CROP Zone tax credit was replaced with the ERZTC and shall be available to taxpayers only for tax liabilities arising during the five
consecutive tax periods following the signing of the agreement. ERZTC shall be applied against tax due under RSA 77-A, the Business Profits Tax
(BPT). Any unused portion may be applied against tax due under RSA 77-E, the Business Enterprise Tax (BET). For the purpose of the credit
allowed under RSA 77-A:5, XII, the BPT, the ERZTC shall be considered taxes paid under RSA 77-E. ERZTCs shall not be transferable. This
tax credit has carryforward provisions.
The ERZTC is a “cascading” tax credit that may be used to reduce a BET liability and, as considered “taxes paid” under RSA 77-E, may then be
used to reduce a BPT liability. The amount disclosed below is total the reduction in revenue to the State whether applied against BPT, BET, or
both tax liabilities. There were no other commitments made by the State other than the agreement to credit taxes.
Agreement: An agreement between the State and the taxpayer determines the amount of credit awarded and includes provisions such as quality and
quantity of full-time jobs to be created, duration of the taxpayer’s commitments with respect to the economic revitalization zone, the amount of the
taxpayer’s investment in the project, and a precise definition of the location of the facility eligible for the credit. There are no provisions to
recapture previous credits.
Methodology: Credit used is the amount actually reported by 50 taxpayers and used to offset a tax liability on the New Hampshire BPT return,
BET return, or both.
Tax returns filed in fiscal year 2020: The tax credit used against BPT, BET, or both totaled $524,000. The maximum aggregate credit amount
allowable for all taxpayers was $825,000.
Education Tax Credit (RSA 77-G)
Description: Chapter 287, Laws of 2012 (SB 372) enacted a law that allows a business organization and business enterprise to make a money
donation (up to $400,000 in the first year of the program and $600,000 in the second year of the program) to an approved scholarship
organization(s) for which the business organization or business enterprise will receive a tax credit against the BPT and/or BET for 85% of their
donation. The donations are used by an approved scholarship organization(s) to grant scholarships for children to attend private schools. The
Education Tax Credit Program began January 1, 2013. The program was extended to the I&D Tax and a five year carryforward provision was
added only for the BPT and BET, effective July 1, 2018.
This tax credit is not a “cascading” credit. The tax credit may only be used to offset tax liabilities incurred in the tax year in which the donation
was made.
The amount disclosed below is the total reduction in revenue to the State whether applied against BPT, BET, and/or I&D returns. There were no
other commitments made by the State other than the agreement to credit taxes.
Agreement: For each contribution made to a scholarship organization, a business organization or business enterprise may claim the credit on their
return per the allowable amount calculated by the Department of Revenue Administration. There are no provisions to recapture previous credits.
Methodology: Credit used is the amount actually reported by 110 taxpayers and used to offset a tax liability on the New Hampshire BET, BPT, and
I&D returns.
Tax returns filed in fiscal year 2020: The tax credit used against BPT, BET and I&D totaled $1,372,000. The maximum aggregate credit amount
allowable for all taxpayers was $5,100,000.
C-76
92 l NEW HAMPSHIRE
15. LITIGATION AND OTHER MATTERS
The State, its agencies, officials and employees are defendants in numerous lawsuits. Although the State is unable to predict the ultimate outcomes
of these suits, based on the information provided by the Attorney General's Office, it does not appear that such litigation resulting, either
individually or in the aggregate, in final judgments against the State, would materially affect its financial position. Immaterial provisions, if
appropriate, for such ultimate liability has been made in the financial statements. Notable cases that could potentially result in a material
transaction are described herein.
Department of Health and Human Services (DHHS)
Christopher Willott, Individually and as Administrator of the Estate of Sadence Willott v. Division of Children, Youth and Families (DCYF).
In August 2018, the plaintiff filed a lawsuit for the wrongful death of Sadence Willott, as well as loss of consortium. The plaintiff also alleges
negligence stemming from incidents of assault prior to her death. Sadie was murdered by her mother in September 2015. The plaintiff (Sadie’s
biological father), claims that DCYF was negligent in handling her case, which caused her death in September 2015, as well as various injuries that
predate her death. While this case would typically be subject to the statutory cap on damages—and the $50,000 statutory cap for loss of
consortium—the plaintiff alleges the Estate is entitled to damages for multiple incidents of harm. Following rulings on DCYF's motions to dismiss
based on statute of limitations and sovereign immunity defenses, and an interlocutory appeal of the dismissal, the New Hampshire Supreme Court
vacated the lower court’s order in light of a decision in another case, and returned it to the lower court for further proceedings, and DCYF's
renewed motion to dismiss was denied. The parties have structured the case and are now in the discovery phase. The Plaintiff's attorney has
recently requested to renew settlement discussions. At present, it is not possible to predict an outcome of this case.
A.A., et al. v. DCYF, et al., 217-2019-CV-676 (“A.A.”), C.M. p/n/f of M.M. & J.M. v. DCYF, et al., 217-2019-CV-677 (“C.M.”), C.W. v.
DCYF, 217-2019-CV-680 (“C.W.”), and Willmonton v. DCYF, 217-2019-CV-678 (“Willmonton”).
DCYF is currently defending these four suits, all filed contemporaneously by the same attorney, and relating to physical and sexual abuse of
children either directly or indirectly under the supervision of DCYF or reported to and investigated by DCYF. None of these claims appears to
individually exceed $2 million; however, the aggregate of the claims may be more than $2 million cumulatively. These lawsuits were stayed for
approximately a year, pending the outcome of several other cases then pending with the New Hampshire Supreme Court. All of the stays have
now been lifted, and the cases are now in the early stages of litigation.
In C.M., DCYF moved to dismiss the complaint in March 2021. The Superior Court denied the motion to dismiss on August 27, 2021. On
October 27, 2021, DCYF filed an answer to the complaint. The discovery phase of the case is open, but the parties have not yet engaged in any
discovery. On December 3, 2021, DCYF filed a petition for original jurisdiction with the Supreme Court of New Hampshire, seeking appellate
review of the Superior Court’s order denying DCYF’s motion to dismiss. Whether the Supreme Court accepts the petition is within the court’s
discretion. It is not possible to predict the outcome of this case at this time.
In Willmonton, DCYF moved to dismiss the complaint, and briefing on the motion was completed in March 2021. The Superior Court denied the
motion to dismiss on June 1, 2021. DCYF filed an answer to the complaint on July 1, 2021. The case is now in the discovery phase. It is not
possible to predict the outcome of this case at this time.
In A.A., the plaintiff filed an amended complaint. The motion to dismiss was filed pursuant to the briefing schedule entered by the court on
September 30, 2021. The objection is due December 20, 2021, with replies due January 7, 2021 and January 18, 2021. A hearing on the motion to
dismiss will take place on February 8, 2022. It is not possible to predict the outcome of this case at this time.
In C.W., a status conference was held on September 28, 2021, and the parties agreed to a schedule pursuant to which the plaintiff has amended the
complaint, and the State has renewed its motion to dismiss. Briefing remains ongoing. It is not possible to predict the outcome of this case at this
time.
Additionally, the same attorney recently filed two new cases. The first case is Z.K. f/k/a Z.S. (“Z.K.”), 217-2021-CV-00528 in Merrimack
Superior Court, which makes similar allegations to the above-referenced cases. In Z.K. we are preparing a motion to dismiss based upon the fact
that RSA chapter 541-B does not provide – expressly or otherwise – for any tolling or enlargement of this three year limited waiver of sovereign
immunity against the state for personal injury for minors. In the Complaint, the plaintiff acknowledged the date of his discovery under the
discovery rule of RSA 508:4, I, which will not save the suit if the trial court rejects the effort to enlarge RSA 541-B to permit minor tolling. Once
the motion to dismiss is filed, we expect it will be objected to and a hearing will be set sometime after April 2022. It is not possible to predict the
outcome of this case at this time.
The second new case is R.K. v. State of New Hampshire Department of Health and Human Services, Division of Children, Youth, and Families,
which was filed on December 14, 2021. The plaintiff alleges that she was abused by her adoptive mother and her boyfriend between June 2008
and October 2016. The plaintiff alleges that DCYF began receiving reports of alleged abuse or neglect of the plaintiff starting in 2010. The
plaintiff asserts claims of negligence and negligent supervision and training against DCYF, based on factual allegations that DCYF failed to
provide a safe atmosphere for the plaintiff and failed to appropriately respond to continuing reports of abuse or neglect. Service of the complaint
has not yet been effected. It is expected that DCYF’s answer or motion to dismiss will be due in mid to late January 2022. It is not possible to
predict the outcome of this case at this time.
C-77
NEW HAMPSHIRE l 93
Youth Development Center Child Abuse Litigation.
The Youth Development Center was New Hampshire’s juvenile detention facility, and housed both pre-trial detained and delinquent-committed
youth. In various locations, at current and now decommissioned and/or demolished physical facilities, and under different names or entities, these
types of facilities have existed in New Hampshire for decades. An active criminal investigation is ongoing into allegations of child abuse which
may have occurred at these facilities in past years, and a number of individuals have now been criminally charged. There is also a growing block
of civil liability claims related to these allegations, for which liability, in the aggregate, will likely exceed $2 million. The following matters are a
part of this block of claims.
Charles F. v. N.H. Youth Development Center. On August 2, 2019, the New Hampshire Attorney General’s Office received notice that an
individual known as Charles F. was seeking to recover damages against the N.H. Youth Development Center for personal injuries sustained from
1994-1995. It appears that this individual is now represented by a different attorney who has sent a request letter on his behalf, as described below.
Case Record and Facility File Requests. Beginning in October, 2019, and continuing until the present, DCYF is receiving requests for files from
formerly detained or committed individuals, all coming from the same attorney, which DHHS believes to related to this block of claims. The
requests currently number approximately 400, one of which appears to be Charles F., referenced above. It is not possible to know how many of
these will result in additional litigation. Some of these requestors have recently filed suit, as described below, and the plaintiffs’ attorney has
indicated he is not through filing cases.
David Meehan v. NH Dept. of Health and Human Services, et al. On January 11, 2020, the plaintiff filed a class action lawsuit against DHHS and
others alleging physical, sexual and mental/emotional abuse, solitary confinement, and deprivation of education while he resided at the Youth
Development Center from December 1, 1995 to 1999. The putative class was alleged to consist of men and women who, while minors in the care
custody and control of the defendants were victims of the same stated acts and treatment at the hands of defendants, their agents, employees, and/
or contractors. The State filed a limited motion to dismiss in the action, which was partially granted. The class allegations were dismissed and the
matter is now proceeding as a single party claim. The state defendants have answered and the matter is in the early stages of discovery. It is not
possible to predict the outcome of these cases at this time.
Michael Gilpatrick v. State of New Hampshire, New Hampshire Department of Health and Human Services, et al., and John Doe #1 v. State of
New Hampshire, New Hampshire Department of Health and Human Services, et al. These two additional cases were filed in Merrimack County
Superior Court on or about September 13, 2021. In both complaints, the plaintiff alleges, with no factual specificity, that he was subjected to “one
or more of the following by agents and employees” of the State of New Hampshire: physical abuse, sexual abuse, mental/emotional abuse,
medication without authorization/consent, excessive solitary confinement, unauthorized strip searches, excessive restraints, and/or discrimination
in education. Both complaints seek relief under state tort law, and for alleged violations of the plaintiff’s rights under the U.S. Constitution and
Title IX of the Education Amendments Act of 1972, as well as the recovery of reasonable attorneys’ fees and costs. The plaintiffs have also served
discovery requests which mirror those received in the Meehan case. The State has moved to dismiss the federal claims in this case as brought
against improper defendants, and has additionally moved to dismiss the remainder of the claims for failure to allege sufficient facts to comply with
New Hampshire’s notice pleading requirement. Additional grounds for dismissal have been reserved pending receipt of a more factually fulsome
pleading. The state defendants are also moving to stay discovery until it is determined whether these matters may proceed. It is not possible to
predict the outcome of these cases at this time.
Additional Suits by Maunsell, Murphy, John Does 2-90 and Jane Does 1-8. The State has also received an additional ninety-nine suits during
December 2021, which are identical to the Gilpatrick and John Doe #1 cases. The State will be making the same motions in these cases as in
Gilpatrick and John Doe #1, described above. As with all of the cases in this block of claims, it is not possible to predict the outcome of these
cases at this time.
John Doe, on behalf of himself and all others similarly situated v. Commissioner Jeffrey Myers, Southern New Hampshire Medical Center,
and the New Hampshire Circuit Court District Division.
An individual, who was admitted to Southern New Hampshire Medical Center’s Emergency Department after a suicide attempt, sued in the
Federal District Court for the State of New Hampshire alleging habeas corpus relief, declaratory judgment, and appointment of a class for
unconstitutional deprivation of liberty interests and lack of procedural due process based on an alleged systemic practice where individuals who
may be experiencing mental health crises are involuntarily detained in hospital emergency rooms without the State providing them with due
process, appointed counsel, or an opportunity to contest their “detention.” This practice is sometimes referred to as “psychiatric boarding.”
Plaintiff is represented by the New Hampshire American Civil Liberties Union (“ACLU”) who is also asking for class certification for similarly
situated individuals in New Hampshire. The ACLU alleges that, as of October 31, 2018, approximately 46 adults and 4 minors were “boarded” in
emergency rooms. The State will be defending both the Commissioner and the Circuit Court system.
The complaint includes 4 counts requesting relief: Count I, a class action claim alleging violations of the Fourteenth Amendment to the United
State Constitution for deprivation of liberty; Count II, a class action procedural due process claim under the New Hampshire Constitution Part I,
Article 15; Count III, a class action claim alleging violations of RSA 135-C:31, I; and Count IV, an individual claim on behalf of John Doe for
habeas corpus relief. On November 13, 2018, Count IV was voluntarily dismissed by Plaintiff as he moved to a voluntary stay status at the
hospital. The overall relief requested is declaratory judgments regarding the various counts and injunctions to discontinue the alleged violations.
There is also an accompanying motion for class certification.
The State subsequently moved to dismiss the amended complaint and amended complaint-in-intervenor on substantially the same grounds on
September 16, 2019. Thereafter, three of the four hospitals that had been sued for false imprisonment answered the plaintiffs’ amended complaint.
Two of those hospitals included cross-claims for indemnification, contribution, and a violation of certain provisions of NH RSA 135-C. The cross-
claims have been dismissed on Eleventh Amendment immunity grounds. The motions to dismiss were finally briefed in 2020; the district court
C-78
94 l NEW HAMPSHIRE
denied the Commissioner’s motions to dismiss and subsequently granted the plaintiffs’ class certification. In doing so, the district court interpreted
RSA 135-C in a manner contrary to how it has been implemented by the State. As a result, different state circuit courts have begun reading the
statute differently and reaching different outcomes as to whether a person has timely received a probable causes hearing under the involuntary
emergency commitment statutes.
The Commissioner has filed motions for judgment on the pleadings on sovereign immunity grounds. Those motions were denied. The
Commissioner appealed those decisions to the United States Court of Appeals for the First Circuit. While those motions were pending, the same
state statutory interpretation arose in the context of a writ of habeas corpus in state court. The circuit court found the petitioner’s involuntary
emergency admission to be lawful. In addressing the writ of habeas corpus, the superior court found the petitioner’s involuntary emergency
admission to be unlawful based on the reading of the statute endorsed by the federal district court. The Commissioner took an expedited appeal to
the New Hampshire Supreme Court. On May 11, 2021, the New Hampshire Supreme Court affirmed the superior court’s decision and statutory
interpretation.
The State began taking immediate action to conform the state mental health services system to the New Hampshire Supreme Court’s decision. On
May 20, 2021, in the federal case, the Commissioner filed a reply brief with the First Circuit arguing that the federal action is now moot in light of
the New Hampshire Supreme Court’s decision and the State’s actions in response to conform the state mental health services system to the new
interpretation of law. The plaintiffs and intervenors filed a surreply and oral argument was subsequently held. The First Circuit subsequently
issued an opinion finding that the plaintiff's case could proceed and reserved the question of mootness to the federal district court on remand. The
case is presently on remand and the parties are putting together a discovery and trial plan. It is not possible to predict the outcome of this case at
this time.
G.K., by their next friend, Katherine Cooper, et al. v. Sununu, et al.
On January 5, 2021, four minor children in the state foster care system with mental disabilities brought an action in the United States District Court
for the District of New Hampshire on behalf of themselves and all others similarly situated challenging the State’s foster care system as
unconstitutional and in violation of the Adoption Assistance and Child Welfare Act of 1980, Title II of the Americans with Disabilities Act,
Section 504 of the Rehabilitation Act of 1973. The defendants moved to dismiss the action. Following a hearing on the motion to dismiss, the
court dismissed a count from the complaint contending that all class members should receive court-appointed counsel in certain DCYF
proceedings. The parties submitted a joint proposed discovery plan in October 2021, upon which the Court has not taken any action. It is not
possible to predict the outcome of this case at this time.
Price, et al. v. Commissioner of the New Hampshire Department of Health and Human Services, et al.
On January 11, 2021, four persons with disabilities enrolled in the New Hampshire Choices for Independence Medicaid Waiver (“CFI Waiver”)
sued the Commissioner of the New Hampshire Department of Health and Human Services and the agency itself on behalf of a purported class of
similarly-situated persons, alleging a failure to provide them with community-based long-term care services available through the waiver program
in violation of the Fourteenth Amendment of the United States Constitution, the Americans with Disabilities Act, Section 504 of the Rehabilitation
Act, and the Medicaid Act. The plaintiffs claim the State has violated the integration mandate with the administration of the CFI Waiver. The
plaintiffs seek declaratory and injunctive relief, as well as the recovery of reasonable attorneys’ fees and costs. In March 2021, the plaintiffs filed
a Suggestion of Death as to one of the four plaintiffs. The defendants moved to dismiss the action, which was recently denied in its entirety by the
court. The court interpreted the integration mandate broadly and rejected the State’s arguments including that the Medicaid and Due Process claims
do not fail for lack of state action. However, the court indicated that the integration mandate does not impose strict liability on state actors, thus,
the plaintiffs will have to show that the alleged failures to deliver CFI Waiver services are caused by the acts / omissions of DHHS. All seven
counts continue to remain pending, however, the court indicated that one count may eventually be resolved easily or disposed of by a motion for
summary judgment. The parties have commenced discovery in the case. Discovery will be extensive and voluminous. It is not possible to predict
the outcome of this case at this time.
Verrill v. Commissioner Shibinette (Commissioner of the Dept of Health and Human Services)
The plaintiff, a 20-year old woman with severe developmental disabilities who is in school, filed a lawsuit in superior court seeking a declaration
that she is entitled to home and community-based services under RSA chapter 171-A. RSA 171-A:1-a states, in relevant part, that “[t]he
department of health and human services and area agencies shall provide services to eligible persons under this chapter . . . in a timely manner. The
department and area agencies shall provide services in such a manner that: (a) For persons in school and already eligible for services from the area
agencies, funds shall be allocated to them 90 days prior to their graduating or exiting the school system or earlier so that any new or modified
services needed are available and provided upon such school graduation or exit.” The Commissioner’s agency has interpreted this statute to apply
only to persons who are still in school and within 90 days of graduating, not to persons who are just generally in school. The superior court
disagreed and interpreted it to apply regardless of a person’s enrollment in school. The parties thereafter briefed the remaining request for
declaratory relief, the request for injunctive relief, and the request for attorney fees. The superior court granted the request for declaratory relief,
which is coterminous with the previous declaration, and the request for attorney fees, but denied without prejudice the request for injunctive relief.
The State has filed an appeal, which was accepted on December 17, 2021, and awaits briefing.
Estate of A.G. v. State of New Hampshire, Department of Health and Human Services, DCYF
On October 12, 2021, counsel for the Estate of A.G. provided DCYF and the Attorney General’s Office with notice that he intends to file a
wrongful death lawsuit in Superior Court against DCYF, on behalf of the estate of a toddler, A.G., who died from acute fentanyl intoxication in
November of 2020. The threatened lawsuit asserts, among other things, that DCYF was negligent in failing to promptly investigate allegations,
instances, and indications of physical and emotional abuse and neglect, and failing to comply with its own policies, procedures, and practices to
C-79
NEW HAMPSHIRE l 95
protect A.G. from foreseeable risks of harm. The parties have agreed to attempt to resolve this matter through mediation, and the mediation
session has been scheduled for January 14, 2022. It is not possible to predict the outcome of this case at this time.
Secretary of State
Frye, et al. v. Gardner, et al.
In July 2020, several persons with print-based disabilities, the Nation Federation of the Blind, Inc., the National Federation of the Blind of New
Hampshire, Inc., and Granite State Independent filed suit in the United States District Court for the District of New Hampshire challenging the
State’s absentee voting program as in violation of Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973.
The plaintiffs moved for a preliminary injunction in advance of the November 2020 general election. The parties settled the claims in the
complaint by implementing a process to permit persons with print-based disabilities to receive and complete an absentee registration and/or
absentee ballot.
Following the November 2020 general election, the defendants moved to dismiss the case on mootness grounds. The plaintiffs filed an amended
complaint adding new claims into the case, including a claim that the defendants must permit persons with print-disabilities to return their absentee
ballots electronically rather than through the mail or by a delivery agent and a claim that the defendants must remediate the election and voting
related pages on their website and bring them into compliance with the Americans with Disabilities Act and the Rehabilitation Act.
On October 1, 2021, the parties entered into a “Proposed Agreement” to resolve this matter. The Proposed Agreement includes provisions
requiring the defendants to: (a) retain as part of their absentee voting program a remote accessible vote-by-mail system that allows for the delivery
and marking of absentee ballots for voters with print disabilities; (b) implement a procedure for “Responding to Requests from Voters with Print
Disabilities for a Reasonable Accommodation Returning a Marked Absentee Ballot”; (c) continue to make all necessary forms for registering to
vote in a format that is accessible; (d) evaluate the feasibility of implementing a commercially available electronic method for delivering to print
disabled voters the election ballots and allowing them to be marked and returned to election officials using a secure cloud-based portal by
consulting with an expert in voting systems and technology in 2021 and 2023; and (e) ensure that all election and voting related webpages on the
defendants’ website comply with the relevant standards under the Americans with Disabilities Act and the Rehabilitation Act. On October 11,
2021, the district court dismissed the case without prejudice, while retaining jurisdiction for the purpose of enforcing the terms of the “Proposed
Agreement,” if necessary.
League of Women Voters of New Hampshire v. Gardner; New Hampshire Democratic Party v. Gardner
On July 2, 2021, the New Hampshire Supreme Court affirmed the trial court’s ruling that N.H. Laws 2017, chapter 205, also known as Senate Bill
3, was unconstitutional because it unreasonably burdens the right to vote in violation of Part I, Article 11 of the New Hampshire Constitution. The
underlying litigation took place over a three to four year period of time and involved two extensive, involved merits hearings. The plaintiffs were
entitled to, and sought an award of reasonable attorney’s fees from the State under the substantial benefit doctrine. Subsequent to fiscal year-end,
the State negotiated and paid $3 million to Counsel for the League of Women Voters of New Hampshire. The State also settled and paid the New
Hampshire Democratic Party's attorney's fees claim for $350 thousand. These amounts will be reflected in the fiscal year 2022 financial
statements.
Other Departments
Avery v. Hanks (Commissioner of the Department of Corrections)
On July 31, 2018, Edgar Avery, an inmate at the New Hampshire State Prison for Men, filed a breach of contract action alleging that the New
Hampshire Department of Corrections is in breach of an extensive settlement agreement known as the Laaman Settlement Agreement. Mr. Avery
sought specific performance of the settlement agreement based on many varied allegations. The agency moved to dismiss Mr. Avery’s suit as
barred by sovereign immunity, because the New Hampshire Supreme Court had interpreted RSA 491:8, the statute permitting suit against the State
on contracts, to be limited to suits seeking monetary damages only. Suits seeking equitable relief were barred. The trial court dismissed the case
on sovereign immunity and standing grounds. Mr. Avery appealed. While the case was pending on appeal, the legislature changed RSA 491:8 to
permit persons to seek equitable relief on contracts with the State. The New Hampshire Supreme Court issued its opinion on November 20, 2020.
In resolving the appeal, the New Hampshire Supreme Court held that RSA 491:8 now permits Mr. Avery to seek specific performance of the
Laaman Settlement Agreement, and, if the New Hampshire Department of Corrections lacks funding sufficient to cover what is ultimately ordered,
the judgment must be presented to the legislature for payment under RSA 491:8. The New Hampshire Supreme Court also held that Mr. Avery has
standing to maintain the lawsuit and reversed and remanded the case. On remand, the Commissioner has filed a renewed motion to dismiss which
remains pending for resolution. Mr. Avery filed a motion for preliminary injunction which was withdrawn. A hearing on the renewed motion to
dismiss was held on December 10, 2021 At this time, it is not possible to predict the outcome of the case.
Richard Simone, Jr. v. Andrew Monaco, et al (Department of Safety)
On May 11, 2016, Mr. Simone led police on a multi-state vehicle chase, ending in Nashua, NH. After Mr. Simone stopped and exited his vehicle, a
NH State Trooper, Andrew Monaco, and a Massachusetts State Trooper, Joseph Flynn, used excessive force in arresting Mr. Simone. Those two
troopers have been convicted of crimes associated with their use of force. Mr. Monaco is no longer a NHSP Trooper. Mr. Simone brought a civil
lawsuit relating to the incident, naming the NHSP Colonel and two NHSP Troopers as defendants. While Mr. Monaco is also named as a
defendant, the State is not providing defense or indemnification for him. The State is defending the New Hampshire State Police Colonel, and two
Troopers that did not participate in the use of force, but were alleged to be present at the scene of the arrest. Mr. Simone alleges that the State
Police Defendants failed to intervene to stop the use of force, and therefore are liable under 42 U.S.C. § 1983. Similarly, Mr. Simone alleges that
the State Police Colonel is liable under 42 U.S.C. § 1983 for a failure to properly train NHSP Troopers. The U.S. District Court dismissed the
Colonel from the case and dismissed all claims that are brought against the State Defendants that are alleged in their official capacity. The Court
C-80
96 l NEW HAMPSHIRE
denied the State’s Motion to Dismiss for failure to timely effect service on and failure to state a claim with respect to the two State Troopers.
Discovery is ongoing in this matter. If Mr. Simone is successful in his claims against the Troopers in their individual capacities, he is seeking
damages, punitive damages, and attorneys’ fees. The Plaintiff’s demand for settlement from all defendants in this matter was $6 million. However,
since the State is not defending and indemnifying Trooper Monaco, the risk to the State is only a fraction of this, if any.
On September 15, 2021, the Plaintiff, through counsel, acknowledged that he does not have enough factual and legal support to proceed with his
claims against Sgt. Lencki. Plaintiff’s counsel voluntarily dismissed the claims against Sgt. Lencki on October 8, 2021. The State filed a Motion
for Summary Judgment on behalf of Trooper Suttmeier on October 13, 2021 arguing that he was unable to intervene to prevent the harm to the
plaintiff and that he is entitled to qualified immunity. It is not possible to predict an amount of liability at this time.
Contoocook Valley School District v. State et al.
On March 13, 2019, several plaintiffs, including a school district and three individuals, sued the State claiming that it has failed to meet its
obligations to fund an adequate education. The plaintiffs assert that certain costs like transportation costs, school nurse costs, food services costs,
facilities costs, teacher benefits, and superintendent costs, must, as a matter of constitutional law, be funded by the State and are currently not
funded by the State. The plaintiff requests approximately $17 million for the school district to be provided by April 1, 2019. On June 5, 2019, the
trial court issued an order finding that RSA 198:40-a, II, the statutory mechanism the state uses to make adequate education payments to school
districts is unconstitutional. The court did not, however, require the State to pay the plaintiffs any amount of money, and denied the plaintiffs’
claims to that effect. Instead, the trial court required the legislature to fix the statute on a prospective basis. The State timely appealed the trial
court’s order. On March 23, 2021, the New Hampshire Supreme Court affirmed in part, reversed in part, and remanded the trial court’s decision. It
affirmed the trial court’s dismissal of the Governor and the Commissioner of the Department of Education in their individual capacities and
reversed the granting of plaintiffs’ motion for summary judgment and awarding attorney’s fees. It concluded that fact issues existed with respect
to which the State was entitled to discovery. The case was remanded to the trial court, where it remains pending. The plaintiffs recently filed a
third amended petition adding approximately 12 new school districts to the action. The defendants have answered the third amended petition, and
the parties are now engaged in discovery. It is not possible to predict the outcome of this case at this time.
Conservation Law Foundation, Inc. v. New Hampshire Fish and Game Department, et al.
On October 31, 2018, the Conservation Law Foundation (“CLF”) filed its Complaint pursuant to Section 505 of the Federal Water Pollution
Control Act (“Clean Water Act”) alleging violations by the Powder Mill State Fish Hatchery of the hatchery’s federal National Pollutant Discharge
Elimination System (“NPDES”) Permit. Specifically, the suit alleges the following violations: (1) discharging effluent that has resulted in state
water quality standards violations in the receiving waters; (2) discharging effluent that has impaired the use of receiving waters; (3) discharging
formaldehyde in concentrations exceeding the limits stated in the facility’s NPDES permit; (4) discharging effluent causing violation of the pH
limits stated in the facility’s NPDES permit; (5) discharging cleaning water in violation of the NPDES permit; and (6) failing to implement and
maintain a best management practices plan as required by the NPDES permit. CLF alleged that each separate violation of the Clean Water Act
subjects NHFG to a penalty of up to $52 thousand. In addition to civil penalties, CLF sought declaratory relief and injunctive relief to prevent
further violations of the Clean Water Act. CLF also seeks injunctive relief to remediate past effluent and seeks recovery of costs and fees
associated with this matter. A final NPDES permit was issued by EPA on October 13, 2020, and the Court postponed trial to allow further briefing
on the effect of the new permit on the remaining issues. The new permit imposed strict numeric phosphorus effluent limits on the Hatchery, which
became effective on January 1, 2021. Following a series of motions, the Court allowed CLF to amend its Complaint to assert claims under the new
permit, including the new numeric effluent limits. The Hatchery is currently unable to comply with the new phosphorus effluent limits without a
drastic reduction in fish production or the construction of a wastewater treatment system. Funds for capital improvements at the Hatchery were
included in the Governor’s budget proposal for the 2022-2023 biennium, but a system to achieve full compliance could exceed available funds.
In April 2021, EPA engaged with the parties to negotiate a compliance schedule for the State to achieve compliance with the new phosphorus
limits and to work toward a negotiated settlement of the case. EPA has indicated it may use its enforcement authority to compel remediation of
downstream phosphorus contamination, though the appropriateness, scope and cost of such potential remediation remains uncertain. As part of a
settlement, EPA seeks to have the State conduct a feasibility and alternatives study for remediation of downstream waters. CLF also seeks its
attorneys’ fees and costs, which are approximately $400 thousand, despite having prevailed on only one minor claim. The Court stayed the case to
allow settlement negotiations to proceed, with a status update due on January 28, 2022.
New Hampshire Lottery Commission v. William Barr, Attorney General
In January 2019, the United States Department of Justice (“USDOJ”) issued a memorandum adopting as an official position of the agency a very
broad interpretation of the federal Wire Act, 18 U.S.C. § 1084. This interpretation reverses a prior interpretation of the USDOJ from 2011 finding
that the Wire Act applies only to sports betting and therefore does not prohibit States from selling lottery tickets over the Internet. The USDOJ’s
recent reversal of the 2011 interpretation appears to prohibit the use of wire transmissions to engage in state conducted lottery activity. The New
Hampshire Lottery Commission had sued the Attorney General and the USDOJ in the United States District Court for the District of New
Hampshire to declare this new interpretation of law erroneous and for a declaration that the Wire Act does not extend to state-conducted lottery
activity. On June 3, 2019, the federal district court issued an order setting aside the USDOJ’s new interpretation of the Wire Act under the federal
Administrative Procedure Act. The USDOJ appealed. On January 20, 2021 the United States Court of Appeals for the First Circuit affirmed the
federal district court's ruling. The USDOJ did not seek further appellate review.
Cassandra Caron, et al. v. New Hampshire Employment Security
On August 27, 2021, four individuals filed a lawsuit in Superior Court against New Hampshire Employment Security and Commissioner George
Copadis. The plaintiffs are asking the Court to order NHES to re-enter an agreement with the United States Department of Labor for purposes of
administering retroactive payment of Pandemic Unemployment Assistance, a form of federal unemployment compensation that Congress created
C-81
NEW HAMPSHIRE l 97
under the CARES Act in March 2020 and that expired on September 6, 2021. Plaintiffs moved for provisional injunctive relief to which
defendants objected. A hearing on Plaintiffs’ motion for provisional relief was held on September 3, 2021 and the Court denied Plaintiff's motion
for provisional relief and dismissed the action sua sponte on September 27, 2021. Plaintiffs have appealed, with briefings due December 27, 2021
and Defendants' brief or memorandum of law due January 26, 2022. There have been numerous similar lawsuits in other states that terminated
PUA agreements with the DOL prior to the program’s September 6, 2021 expiration date. Outcomes in those states have been mixed to date, with
courts granting relief in some cases and denying it in others. If New Hampshire Employment Security is ordered to re-enter an agreement with
DOL to administer PUA retroactively, the PUA program provides that the United States will reimburse the State of New Hampshire for the costs
of the benefits it pays and for its administrative costs in doing so. An unfavorable outcome is unlikely.
Brian Collins v. Chris Sununu
On July 21, 2021, a complaint was filed against New Hampshire Employment Security in Superior Court by an individual who appears to be
challenging Governor Sununu’s decision to terminate the State of New Hampshire’s agreement with the United States Department of Labor to
administer various federal unemployment compensation programs created by the CARES Act in March 2020. Defendants moved to dismiss the
complaint and alternatively for the Court to order the plaintiff to file a more definite statement. The Court granted the motion to dismiss but
permitted Plaintiff to file an amended complaint, which he did. Defendants subsequently moved to dismiss and the Court granted the motion on
November 10, 2021. Plaintiff did not appeal.
State v. Purdue Pharma; State v. Janssen/Johnson & Johnson; State v. McKesson Corp and Cardinal Health; State v. Mallinckrodt; State v.
Richard S. Sackler, et al.
The State has filed suit against three opioid manufacturers (Purdue Pharma, Janssen, and Mallinckrodt), as well as against two opioid distributors
(McKesson and Cardinal Health) and on September 16, 2019 the State filed against four members of the Sackler family, owners of Purdue Pharma,
alleging unfair or deceptive business practices, nuisance and other common law counts. The Sackler complaint includes a fraudulent conveyance
count. All cases were filed in Merrimack County Superior Court. The Purdue, Janssen and Distributors’ cases survived motions to dismiss by the
defendants. The Mallinckrodt defendants filed for bankruptcy protection on October 11, 2020. Trial in the Purdue Pharma case was scheduled for
June 2020, however, on September 14, 2019, Purdue filed bankruptcy in the southern district of New York.
In September, 2021, the bankruptcy court confirmed a plan for reorganization of Purdue. New Hampshire and 8 other jurisdictions objected to the
plan. The plan calls for the Sackler family to give up ownership of Purdue and to pay approximately $4.25 billion in exchange for full releases of
all civil liability related to their operation of Purdue. The company would be transformed into a public benefit corporation with profits from
continued sale of OxyContin and its other products being distributed to creditors for opioid abatement purposes. A number of jurisdictions,
including the U.S. Trustee, CA, WA, CT, MD and DC have filed appeals of the confirmation order based, in part, on the nonconsensual third party
releases to the Sackler family. New Hampshire would receive 0.6489060374% of the national amount allocation for abatement purposes over a 9-
year period. Because of the pending appeals, it is not possible to predict when those payments would commence. A trial is scheduled in the
Janssen/Johnson & Johnson case for February, 2022. The State has indicated its willingness to join the national multistate settlement with
McKesson, Cardinal Health and Amerisource Bergen. That settlement would be in the amount of $21 billion paid over 18 years. Should that
settlement go forward after a sign-up period expires for political subdivisions on January 2, 2022, New Hampshire would receive 0.6258752503%
of the national amount allocated for abatement purposes. The State continues to participate in multistate settlement discussions, along with other
attorneys general, aimed at a global resolution with other opioid related defendants (manufacturers and major pharmacy chains). The State entered
into a multistate agreement with McKinsey & Co, a marketing firm, for its opioid promotional efforts on behalf of Purdue, Johnson & Johnson and
other manufacturers and in March, 2021 received an initial payment of $2.7 million which is reflected in these financial statements, with four
subsequent annual payments due in the amount of $142 thousand. It is not possible at this stage to predict any additional recovery amounts that
would come to the State.
State v. Volkswagen, et al
In September of 2015, a number of states engaged Volkswagen and related companies to discuss litigation related to the company’s “defeat
devices”. These devices disabled the emissions control systems on all affected vehicles during normal, “on road” conditions As part of a
settlement between Volkswagen, the California Air Resources Board (CARB) and the U.S. EPA, New Hampshire opted-in to provisions which
will provide it approximately $6 million to resolve state consumer claims and $31 million in environmental mitigation (restitution to owners was
covered separately through the plaintiffs’ steering committee and will result in recalls, buybacks, and cash payments). On September 15, 2016, the
State sued Volkswagen for the one remaining issue, environmental penalties. The parties reached a settlement on September 27, 2021 for $1.1
million and construction of a fast charging station. The monetary settlement was received subsequent to fiscal year-end and will be reflected in the
fiscal year 2022 financial statements.
OTHER MATTERS
During fiscal year 2017, the State recorded an expense of $21 million to recognize the impairment of certain assets that had been previously
capitalized as part of the state department of transportation’s project to upgrade the Conway, New Hampshire bypass corridor. This project had
multiple segments, some of which were completed, and some were not completed in the timeframes required by the U.S. Department of
Transportation Federal Highway Administration (“FHWA”). Capitalized expenses which met the State’s definition for impairment included both
preliminary engineering and right of way related expenses. The State continued to work with the FHWA in determining what portion, if any, of
right of way related expenses that were incurred utilizing federal funds, would result in a potential liability to FHWA. As certain segments of the
project were completed, only the bypass segment of the expenditures was at risk of being deemed ineligible by FHWA. As of July 1, 2021 the
State was notified by FHWA that right of way costs totaling $27.8 million are subject to payback, and agreed with the State's proposal to pay this
in increments over the next three fiscal years. The first payment of $8 million is due October 2021 and has been reflected as a governmental fund
liability in these financial statements. The remainder of $19.8 million has been reflected as a long-term liability in the Statement of Net Position.
C-82
98 l NEW HAMPSHIRE
16. GOVERNMENTAL FUND BALANCES AND STABILIZATION ACCOUNT
A summary of the nature and purpose of the constraints and related amounts by fund at June 30, 2021 follows:
Governmental Fund Balances - Restricted, Committed, Assigned and Unassigned
(expressed in thousands)
Restricted Committed Assigned Unassigned
General Fund:
General Government $ 47,037 $ 9,568 $ 77,802
Administration of Justice & Public Protection 68,724 20,030 34,430
Resources Protection & Development 344,229 2,989 14,851
Transportation 20,256 9,959
Health & Human Services 183,241 2,727 92,271
Education 2,882 95 12,103
Other Purposes * 257,799
Total 666,369 35,409 241,416 257,799
Highway Fund:
General Government 365
Administration of Justice & Public Protection 5,944
Transportation 130,578 26,000
Total 136,887 26,000
Education Trust Fund:
Education 77,054
Total 77,054
Non-Major Governmental Funds:
Resources Protection & Development 5,251 4,450 9,446
Other Purposes 34,691 (26,981)
Total $ 39,942 $ 4,450 $ 9,446 $ (26,981)
* Includes the Revenue Stabilization account
The deficit in the non-major governmental funds will be eliminated through future intergovernmental revenues and the future issuance of general
obligation bonds.
The State maintains a Revenue Stabilization account (the Rainy Day Fund) established by RSA 9:13-e. Pursuant to RSA 9;13-e, at the close of
each fiscal biennium, any General Fund Unassigned Fund Balance (Surplus) remaining, as determined by the official audit performed pursuant to
RSA 21-I:8, II(a), shall be transferred to this special non-lapsing account. According to the governing statute, transfers into the Rainy Day Fund
only occur in the second year of a biennium, which is fiscal year 2021. The total potential maximum balance allowable is defined by the statute as
10% of the actual general fund unrestricted revenues for the most recently completed fiscal biennium. In the event of an operating budget deficit at
the close of any fiscal biennium, as determined by the official audit, and upon approval of the Fiscal Committee of the General Court and the
Governor to the extent available, sufficient funds can be transferred from this account to eliminate such deficit. Such transfer shall occur only
when both of the following conditions are met:
1. A general fund operating budget deficit occurred for the most recently completed fiscal biennium and
2. Unrestricted general fund revenues in the most recently completed fiscal biennium were less than the budget forecast.
No available balance in the revenue stabilization reserve account shall be utilized for any purpose other than deficit reduction without specific
approval of 2/3 of each house of the General Court and the Governor.
During 2021, a transfer of $0.1 million for 10% of certain settlements, and a transfer of general fund surplus from the Fiscal 2020-2021 biennium
of $142.2 million, brought the Rainy Day fund at June 30, 2021 to $257.8 million.
17. JOINT VENTURES-LOTTERY COMMISSION
The New Hampshire Lottery Commission is an active participant in three separate joint venture arrangements: the Tri-State Lotto Commission
(Tri-State), the Multi-State Lottery Association (MUSL), and the Lucky for Life.
In September 1985, the Tri-State was established whereby the New Hampshire Lottery Commission (Lottery) entered into a joint venture with the
lotteries of the states of Maine and Vermont to promulgate rules and regulations regarding the conduct of lottery games and the licensing of
retailers. In addition, each of the member states contributes services towards the management and advisory functions. Each member state including
the Lottery shares in all joint venture sales and expenses, including prize expenses, based on its pro-rata share of sales. Direct charges, such as
advertising, vendor fees and the Lottery’s per-diem payments are charged to participating states based on services received. Prizes awarded under
Tri-State games are fully funded by deposit fund contracts and investments held by Tri-State. Accordingly, Lottery does not record a liability for
jackpot awards which are payable in installments from funds provided by Tri-State. For the year ended June 30, 2021, the Lottery recognized
C-83
NEW HAMPSHIRE l 99
$11.0 million of net income from Tri-State. At June 30, 2021 Tri-State reported total installment prize obligations owed to jackpot winners of
$15.1 million, payable through the year 2045.
In addition, Tri-State has established a Designated Prize Reserve, which acts as a contingency to protect Tri-State against unforeseen liabilities.
The Lottery’s share of deposits held as Tri-State prize reserves was $1.9 million at June 30, 2021. The Tri-State issues a publicly available annual
financial report, which may be obtained by writing to the Tri-State Lotto Commission, 1311 US Route 302 Suite 100, Barre, Vermont 05671.
In November 1995, the Lottery became a member of MUSL, which is currently comprised of 38 member state lotteries and administers the Multi-
State Lottery Powerball, Lotto America, and Mega Millions games. Each state lottery sells tickets, collects revenues and remits prize funds to
MUSL net of lower tier prize awards. Each member also pays for a share of MUSL’s operating expenses based upon the members' proportionate
share of game sales. Jackpot prizes that are payable in installments are satisfied through investments purchased by MUSL. Accordingly, the
Lottery does not record a liability for jackpot awards which are payable in installments from funds provided by MUSL. For the year ended
June 30, 2021, the Lottery recognized $24.2 million of net income from MUSL.
In addition, MUSL has established a contingency reserve to protect MUSL and its members against unforeseen liabilities. The Lottery’s share of
deposits held as MUSL prize reserves was $2.7 million at June 30, 2021. MUSL issues a publicly available annual financial report, which may be
obtained by writing to the Multi-State Lottery Association, 4400 NW Urbandale Drive, Urbandale, Iowa 50322.
The New Hampshire Lottery Commission became a member of the New England regional lottery game known as Lucky for Life beginning sales
on March 11, 2012, with the first drawing held on March 15, 2012. Lucky for Life is currently comprised of lotteries in twenty-five states and the
District of Columbia. The Lottery sells Lucky for Life tickets, collects all revenues, and remits prize funds and operating funds to MUSL. While
Lucky for Life is not a MUSL game, the party lotteries pay a fee to MUSL to act as the game administrator (clearinghouse agent). MUSL collects
and re-distributes funds to the party lotteries when funds are due and purchases insurance annuities for the top two highest prize tiers when a
winner does not choose a cash pay-out. The top two prize tiers are payable in installments and are satisfied through insurance annuities purchased
by MUSL when a winner chooses the annuity option. Accordingly, the Lottery does not record an obligation for jackpot awards which are payable
in installments from funds provided by MUSL or the other party lotteries. The Lottery does accrue a current amount due for its proportionate share
of prizes and expenses.
Each member state including the Lottery shares in all joint venture sales and expenses, including prize expenses, based on its pro-rata share of
sales. For the year ended June 30, 2021, New Hampshire’s total share of the net income for Lucky for Life was $1.4 million. The prize liability for
each Lucky for Life drawing is shared by each member Lottery based on an amount equal to a percentage of that member Lottery’s Lucky for Life
sales. Each member Lottery is responsible for a prize payout equal to a percentage of that member Lottery’s Lucky for Life sales, said percentage
being the proportion of total Lucky for Life prize liability to total Lucky for Life sales. There are no prize reserves held by MUSL for this game.
The State’s total share of accrued prize and operating amounts due at June 30, 2021 amounted to $2.7 million, representing MUSL prize reserves
which could be returned to the State’s Education Trust Fund.
18. SUBSEQUENT EVENTS
In preparing these financial statements, the State has evaluated events and transactions occurring subsequent to June 30, 2021 for adjustment or
disclosure, if deemed to materially impact the financial statements as presented.
Federal Transportation Infrastructure Finance and Innovation Act (TIFIA) Notes:
Under the TIFIA loan agreement, the State has the ability to draw up to $200 million in funds as described in Note 5 to the Financial Statements.
During the period July 1, 2020 through December 22, 2021, an additional $2.3 million of TIFIA proceeds had been requested/received under this
arrangement, representing a long-term note payable.
C-84
100 l NEW HAMPSHIRE
Required Supplementary Information
(Unaudited)
C-85
NEW HAMPSHIRE l 101
STATE OF NEW HAMPSHIRE
BUDGET TO ACTUAL (NON-GAAP BUDGETARY BASIS) SCHEDULE (Unaudited)
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
General Fund
Budgeted Amounts
Variance with Final
Actual Budget- Positive
Original Final (Budgetary Basis) (Negative)
REVENUES
General Property Taxes $ 290 $ 290 $ 291 $ 1
Special Taxes 1,403,846 1,382,565 1,526,100 143,535
Personal Taxes 112,652 112,652 153,050 40,398
Business License Taxes 23,032 23,033 27,316 4,283
Non-Business License Taxes 140,292 140,361 146,940 6,579
Fees 276,664 226,966 166,289 (60,677)
Fines, Penalties and Interest 5,591 9,067 13,430 4,363
Grants from Federal Government 1,800,012 3,527,810 2,445,595 (1,082,215)
Grants from Private and Local Sources 210,009 210,942 166,114 (44,828)
Rents and Leases 6,515 7,167 1,448 (5,719)
Interest Premiums and Discounts 40,940 41,860 21,617 (20,243)
Sale of Commodities 16,010 20,325 15,334 (4,991)
Sale of Services 50,614 50,505 27,383 (23,122)
Assessments 76,304 81,407 69,999 (11,408)
Grants from Other Agencies 345,600 828,798 627,451 (201,347)
Miscellaneous 656,914 817,752 480,702 (337,050)
Total Revenues 5,165,285 7,481,500 5,889,059 (1,592,441)
EXPENDITURES
GENERAL GOVERNMENT
Administrative Service Dept 150,756 190,228 127,364 62,864
Boxing & Wrestling Commission 10 10 6 4
Development Disabilities Council 685 1,068 643 425
Executive Council 265 254 242 12
Executive Dept 44,474 142,828 109,407 33,421
Housing Appeal Board 212 155 57
Information Technology Dept 114,342 119,360 90,659 28,701
Legislative Branch 20,490 36,701 18,383 18,318
Office of Child Advocate 551 516 484 32
Professional Licensure & Certification Office 14,144 15,828 9,579 6,249
Retirement System 12,290 14,436 10,154 4,282
Revenue Administration Dept 23,231 76,790 73,695 3,095
State Dept 10,603 21,424 14,920 6,504
Tax and Land Appeals Board 977 921 843 78
Treasury Dept 205,255 275,469 210,078 65,391
Total 598,073 896,045 666,612 229,433
C-86
102 l NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
BUDGET TO ACTUAL (NON-GAAP BUDGETARY BASIS) SCHEDULE (Unaudited) - continued
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
General Fund
Budgeted Amounts
Variance with Final
Actual Budget- Positive
Original Final (Budgetary Basis) (Negative)
JUSTICE AND PUBLIC PROTECTION
Agriculture, Markets & Food Dept 7,843 17,348 12,233 5,115
Banking Dept 6,679 6,693 5,358 1,335
Corrections Dept 143,418 150,823 138,280 12,543
Employment Security Dept 42,108 173,769 115,865 57,904
Human Rights Commission 935 823 680 143
Insurance Dept 13,299 13,746 10,680 3,066
Judicial Branch 101,671 110,609 91,376 19,233
Judicial Council 32,092 34,035 33,481 554
Justice Dept 94,822 104,533 48,509 56,024
Labor Dept 11,536 29,984 27,286 2,698
Military Affairs & Veteran Services Dept 40,936 45,605 28,599 17,006
Public Employee Relations Labor Board 487 472 455 17
Public Utilities Commission 34,779 46,946 37,454 9,492
Safety Dept 86,634 339,729 182,627 157,102
Total 617,239 1,075,115 732,883 342,232
RESOURCE PROTECTION AND DEVELOPMENT
Business and Economic Affairs Dept 41,703 52,279 22,534 29,745
Community Development Finance Authority 196 196 196
Environmental Services Dept 237,816 292,301 118,543 173,758
Fish and Game Dept 100 158 158
Natural & Cultural Resources Dept 58,279 86,961 46,259 40,702
Pease Development Authority 820 11,314 2,723 8,591
Total 338,914 443,209 190,413 252,796
TRANSPORTATION
Transportation Dept 65,808 130,443 44,792 85,651
Total 65,808 130,443 44,792 85,651
C-87
NEW HAMPSHIRE l 103
STATE OF NEW HAMPSHIRE
BUDGET TO ACTUAL (NON-GAAP BUDGETARY BASIS) SCHEDULE (Unaudited) - continued
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
General Fund
Budgeted Amounts
Variance with Final
Actual Budget- Positive
Original Final (Budgetary Basis) (Negative)
HEALTH AND SOCIAL SERVICES
Human Services 241,802 452,291 288,135 164,156
Behavioral Health 128,451 209,661 86,392 123,269
Community Based Care Svc 132 132 47 85
Health & Human Services Commissioner's 168,572 409,766 258,290 151,476
Developmental Services 438,175 504,434 370,516 133,918
Elderly & Adult Services 506,771 573,546 459,938 113,608
Glencliff Home 17,220 17,621 14,885 2,736
NH Hospital 89,140 169,354 81,128 88,226
Office of Medicaid & Business Policy 1,143,594 1,848,199 1,667,933 180,266
Public Health 129,583 360,731 147,051 213,680
Transitional Assistance 123,148 116,944 86,671 30,273
Veterans Home 41,158 42,122 30,159 11,963
Total 3,027,746 4,704,801 3,491,145 1,213,656
EDUCATION
Community College System of NH 55,360 55,360 55,360
Department of Education 264,283 878,336 297,505 580,831
Police Standards & Training Council 3,512 3,371 2,729 642
University System of NH 88,500 88,500 88,500
Total 411,655 1,025,567 444,094 581,473
Total Expenditures 5,059,435 8,275,180 5,569,939 2,705,241
Excess (Deficiency) of Revenues Over (Under) Expenditures 105,850 (793,680) 319,120 1,112,800
Fund Balance - July 1 671,117 436,948 1,038,394
Fund Balance - June 30 $ 776,967 $ (356,732) $ 1,357,514
C-88
104 l NEW HAMPSHIRE
STATE OF NEW HAMPSHIRE
BUDGET TO ACTUAL (NON-GAAP BUDGETARY BASIS) SCHEDULE (Unaudited)
HIGHWAY FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Highway Fund
Budgeted Amounts
Variance with Final
Actual Budget-Positive
Original Final (Budgetary Basis) (Negative)
REVENUES
Business License Taxes $ 305,758 $ 305,757 $ 170,992 $ (134,765)
Non-Business License Taxes 86,338 86,338 64,805 (21,533)
Fees 67,754 67,753 34,107 (33,646)
Fines, Penalties and Interest 6,101 6,100 4,475 (1,625)
Grants from Federal Government 190,975 203,553 176,324 (27,229)
Grants from Private and Local Sources 11,684 11,684 7,367 (4,317)
Rents and Leases 96 96 14 (82)
Sale of Commodities 4,299 4,299 2,309 (1,990)
Sale of Services 5,622 5,622 3,833 (1,789)
Grants from Other Agencies 14,915 15,193 10,159 (5,034)
Miscellaneous 78,456 82,097 31,059 (51,038)
Total Revenues 771,998 788,492 505,444 (283,048)
EXPENDITURES
General Government 173 173
Justice and Public Protection 117,481 121,506 86,800 34,706
Transportation 708,544 901,077 462,549 438,528
Total Expenditures 826,025 1,022,756 549,349 473,407
Excess (Deficiency) of Revenues and Other Sources Over
(Under) Expenditures and Other Uses (54,027) (234,264) (43,905) 190,359
Fund Balance - July 1 501,758 518,257 508,939
Fund Balance - June 30 $ 447,731 $ 283,993 $ 465,034
C-89
NEW HAMPSHIRE l 105
STATE OF NEW HAMPSHIRE
BUDGET TO ACTUAL (NON-GAAP BUDGETARY BASIS) SCHEDULE (Unaudited)
EDUCATION FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(Expressed in Thousands)
Education Trust Fund
Budgeted Amounts
Variance with Final
Actual Budget-Positive
Original Final (Budgetary Basis) (Negative)
REVENUES
General Property Taxes $ 407,299 $ 407,299 $ 401,267 $ (6,032)
Special Taxes 509,800 509,800 594,461 84,661
Personal Taxes 88,500 88,500 99,375 10,875
Fines, Penalties and Interest 1 1 (1)
Interest Premiums and Discounts 792 792
Miscellaneous 39,200 39,200 40,000 800
Total Revenues 1,044,800 1,044,800 1,135,895 91,095
EXPENDITURES
Education 1,217,570 1,217,570 1,122,658 94,912
Total Expenditures 1,217,570 1,217,570 1,122,658 94,912
Excess (Deficiency) of Revenues and Other Sources Over
(Under) Expenditures and Other Uses (172,770) (172,770) 13,237 186,007
Fund Balance - July 1 32,574 100,312 70,203
Fund Balance - June 30 $ (140,196) $ (72,458) $ 83,440
C-90
106 l NEW HAMPSHIRE
Note to the Required Supplementary Information - Budgetary Reporting (Unaudited)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
The Budget To Actual (Non-GAAP Budgetary Basis) Schedules depict budgeted to actual expenditures using the same format, terminology and
classification as in the statement of revenues, expenses and changes in fund balances with an additional expense level by department within each
functional expense category.
The comparison schedule presented for the General Fund, the Highway Fund, and the Education Trust Fund, presents the original and final
appropriated budgets for fiscal year 2021, as well as the actual resource inflows, outflows and fund balances stated on the budgetary basis.
The “original budget” and related estimated revenues represent the spending authority enacted into law by the appropriation bill for each biennial
budget. For fiscal year 2020, the operating budget proposed in HB1 and HB2, for fiscal years 2020-2021, was not passed by June 30, 2019. As a
result, the State entered a three-month continuing resolution budget based on appropriations from fiscal year 2019. On September 26, 2019, HB3
along with a companion bill, HB4, were signed into law as Chapters 345 and 346, Laws of 2019. These collective appropriations, effective
beginning July 1, 2019, represent the original budget, which includes balances and encumbrances carried forward from the prior year.
Generally accepted accounting principles (GAAP) require the final legal budget be reflected in the “final budget” column for those accounts
included in the original budget. Therefore, updated revenue estimates available for appropriations as of JUNE 30, 2021 rather than the amounts
shown in the original budget, are reported. The final appropriations budget represents the original budget (HB3), plus HB4 and supplemental
appropriations, carry-forwards, approved transfers, and any executive order reductions for budgeted accounts.
RECONCILIATION OF BUDGETARY TO GAAP
The State’s biennial budget is prepared on a basis other than GAAP. The “actual” results columns of the Budget To Actual (Non- GAAP
Budgetary Basis) schedules are presented on a “budgetary basis” under such standardized accounting methods and policies structured to provide a
meaningful comparison to budget.
The major differences between the budgetary basis and the GAAP basis are:
1. Expenditures (Budgetary) are recorded when cash is paid, rather than when the obligation is incurred (GAAP). Revenues (Budgetary)
are based on cash received plus estimated revenues related to the budgetary expenditures. Additional revenue accruals are made on a
GAAP basis only.
2. On a GAAP basis, major inter-agency and intra-agency transactions are eliminated in order to not double count revenues and
expenditures.
The following schedule reconciles the General and Major Special Revenue Funds of the primary government for differences between budgetary
accounting methods and the GAAP basis accounting principles for the year ended June 30, 2021 (expressed in thousands).
Education
General Fund Highway Fund Trust Fund
Excess/(Deficiency) of revenues and other
financing sources over/(under) expenditures
and other financing (uses) (Budgetary Basis) $ 319,120 $(43,905) $13,237
Adjustments and Reclassifications:
To record change in Accounts Payable and
Accrued Payroll 470,540 1,200 (3,050)
To record change in Accounts Receivable (581,603) (2,155) (146,254)
To record Other Financing Sources (Uses) 186,043 64,382 145,081
Excess/(Deficiency) of revenues and other
financing sources over/(under) expenditures
and other financing (uses) (GAAP Basis)
including change in inventory $ 394,100 $19,522 $9,014
C-91
NEW HAMPSHIRE l 107
Required Supplementary Information (Unaudited)
INFORMATION ABOUT THE TRUSTED OTHER POSTEMPLOYMENT BENEFITS PLAN
Schedule of the State’s Proportionate Share of the Net OPEB Liability (Trusted OPEB Plan)
(dollars in thousands) June 30, June 30, June 30, June 30,
2021 2020 2019 2018
State’s Proportion of the Net OPEB Liability 19.85% 20.62% 20.17% 19.10%
State’s Proportionate Share of the Net OPEB Liability $86,882 $90,417 $92,357 $87,317
State’s Covered Payroll $638,061 $621,426 $601,426 $587,542
State’s Proportionate Share of the Net OPEB Liability as a Percentage of its
Covered Payroll 13.62% 14.55% 15.36% 14.86%
NHRS Fiduciary Net Position as a Percentage of the Total OPEB Liability 7.74% 7.75% 7.53% 7.91%
Note: The amounts presented were determined as of and for the measurement period ended June 30, 2020, 2019, 2018, and 2017.
The schedule is intended to show 10 years. Additional years will be added as they become available.
Schedule of State Contributions
(dollars in thousands) June 30,
2021 2020 2019 2018 2017
Required State Contribution $9,527 $9,259 $9,460 $8,960 $11,996
Actual State Contributions 9,527 9,259 9,460 8,960 11,996
Excess/(Deficiency) of State Contributions
State’s Covered Payroll $649,270 $638,061 $621,182 $601,426 $587,542
State Contribution as a Percentage of its
Covered Payroll 1.47% 1.45% 1.52% 1.49% 2.04%
Note: The schedule is intended to show 10 years. Additional years will be added as they become available.
Notes to the Required Supplementary Information:
Changes in benefit terms: None
Changes in assumptions: Investment return reduced from 7.25% to 6.75%,
wage inflation reduced from 3.25% to 2.75%, price inflation reduced from 2.5%
to 2.0%, and updated demographic assumptions and mortality tables.
C-92
108 l NEW HAMPSHIRE
Required Supplementary Information (Unaudited)
INFORMATION ABOUT THE NON TRUSTED OTHER POSTEMPLOYMENT BENEFITS PLAN
2021 2020 2019 2018
Total OPEB Liability
Service cost $ 62,882 $ 63,317 $ 76,699 $ 111,334
Interest 64,137 75,265 81,507 84,315
Differences between expected and actual experience (10,282) (24,533) (7,653) (7,886)
Changes in assumptions 358,302 (177,243) (235,527) (784,281)
Changes in benefit terms (182,835)
Benefit payments (44,600) (51,333) (51,623) (49,772)
Net change in total OPEB liability 430,439 (114,527) (319,432) (646,290)
Total OPEB liability - beginning 1,795,462 1,909,989 2,229,421 2,875,711
Total OPEB liability - ending 2,225,901 1,795,462 1,909,989 2,229,421
Covered-employee payroll $ 638,061 $ 621,182 $ 601,426 $ 587,542
Total OPEB liability as a percentage of covered-employee payroll 348.85% 289.04 % 317.58 % 379.45 %
Note: The amounts presented were determined as of and for the measurement periods ended June 30, 2020, 2019, 2018, and 2017
Notes to Schedule:
Changes in assumptions reflect per capita health costs and administrative expenses based on more recent data, health cost trends were updated to
better reflect experience and future expectations, the projection of the exercise tax on high cost health plans beginning in 2022 was revised, the
marriage assumption for future retirees was lowered from 75% to 70%, as well as changes in the discount rate. The mortality, disabilty,
withdrawal, retirement and salary scale assumptions were updated to be consistent with the NHRS 4 Year Experience Study, 7/1/2015 through
6/30/19. The following are the discount rates used in each period.
2021 2.21%
2020 3.50%
2019 3.87%
2018 3.58%
2017 2.85%
Changes in benefits reflect the implementation of the Medicare Advantage Plan, a fully insured plan, as of January 1, 2020.
The schedule is intended to show 10 years. Additional years will be added as they become available.
C-93
NEW HAMPSHIRE l 109
Required Supplementary Information (Unaudited)
INFORMATION ABOUT THE NEW HAMPSHIRE RETIREMENT SYSTEM
Schedule of the State’s Proportionate Share of the Net Pension Liability
June 30, June 30, June 30, June 30, June 30, June 30, June 30,
(dollars in thousands) 2021 2020 2019 2018 2017 2016 2015
State’s Proportion of the Net Pension Liability 18.64% 18.80 % 18.42 % 19.83 % 19.47 % 20.07 % 19.60 %
State’s Proportionate Share of the Net
Pension Liability $1,192,485 $904,354 $886,972 $975,446 $1,035,370 $794,933 $735,869
State’s Covered Payroll $638,061 $621,182 $601,426 $587,542 $562,387 $563,322 $533,457
State’s Proportionate Share of the Net
Pension Liability as a Percentage of its
Covered Payroll 186.89% 145.59 % 147.48 % 166.02 % 184.10 % 141.12 % 137.94 %
NHRS Fiduciary Net Position as a Percentage
of the Total Pension Liability 58.72% 65.59 % 64.73 % 62.66 % 58.30 % 65.47 % 66.32 %
Note: The amounts presented were determined as of and for the measurement periods ended June 30, 2020, 2019, 2018, 2017, 2016, 2015, and
2014
The schedule is intended to show 10 years. Additional years will be added as they become available.
Schedule of State Contributions
(dollars in thousands) June 30,
2021 2020 2019 2018 2017 2016 2015 2014
Required State Contribution $85,318 $83,302 $82,370 $78,280 $72,680 $69,700 $67,450 $63,621
Actual State Contributions 85,318 83,302 82,370 78,280 72,680 69,700 67,450 63,621
Excess/(Deficiency) of State Contributions
State’s Covered Payroll $649,270 $638,061 $621,182 $601,426 $587,542 $562,387 $563,322 $533,457
State Contribution as a Percentage of its Covered Payroll 13.14 % 13.06 % 13.26 % 13.02 % 12.37 % 12.39 % 11.97 % 11.93 %
Note: The schedule is intended to show 10 years. Additional years will be added as they become available.
C-94
110 l NEW HAMPSHIRE
Required Supplementary Information (Unaudited)
INFORMATION ABOUT THE NEW HAMPSHIRE JUDICIAL RETIREMENT PLAN
June 30, June 30, June 30, June 30, June 30, June 30, June 30,
Fiscal Year Ended 2021 2020 2019 2018 2017 2016 2015
(dollars in thousands)
Total Pension Liability
Service cost $ 4,333 $ 4,008 $ 3,921 $ 3,513 $ 3,248 $ 2,693 $ 2,351
Interest on total pension liability 6,872 6,635 6,411 6,826 6,568 5,642 5,648
Effect of differences between expected and actual
experience 1,154 (10,003) 3,773
Effect of changes in actuarial assumptions 4,477 4,435 3,806
Benefit payments (7,396) (7,452) (6,682) (6,601) (6,192) (5,694) (5,775)
Net change in total pension liability 9,440 3,191 3,650 (1,830) 11,203 2,641 2,224
Total pension liability, beginning 102,253 99,062 95,412 97,242 86,039 83,398 81,174
Total pension liability, ending (a) 111,693 102,253 99,062 95,412 97,242 86,039 83,398
Fiduciary Net Position
Employer contributions 6,652 6,948 6,731 6,346 6,096 5,470 4,923
Member contributions 830 812 789 745 727 664 635
Investment income net of investment expenses 7,999 10,042 (3,422) 7,497 2,874 (249) 2,759
Benefit payments (7,396) (7,452) (6,682) (6,601) (6,192) (5,694) (5,775)
Administrative expenses (279) (214) (297) (228) (239) (208) (203)
Net change in plan fiduciary net position 7,806 10,136 (2,881) 7,759 3,266 (17) 2,339
Fiduciary net position, beginning 65,186 55,050 57,931 50,172 46,906 46,923 44,584
Fiduciary net position, ending (b) 72,992 65,186 55,050 57,931 50,172 46,906 46,923
Net pension liability, ending = (a) - (b) $ 38,701 $ 37,067 $ 44,012 $ 37,481 $ 47,070 $ 39,133 $ 36,475
Fiduciary net position as a % of total pension liability 65.35 % 63.75 % 55.57 % 60.72 % 51.59 % 54.52 % 56.26 %
Covered payroll $ 9,582 $ 9,624 $ 9,044 $ 8,359 $ 8,525 $ 8,031 $ 7,535
Net pension liability as a % of covered payroll 403.89 % 385.15 % 486.64 % 448.39 % 552.14 % 487.27 % 484.07 %
Note: The amounts presented above were determined as of and for the measurement period ended December 31, 2020, 2019, 2018, 2017, 2016, 2015 and
2014. The schedule is intended to show 10 years. Additional years will be added as they become available.
Schedule of Employer Contributions
(dollars in thousands)
Fiscal Year Ended June 30, 2021 2020 2019 2018 2017 2016 2015 2014
Actuarially Determined Contribution $ 6,507 $ 6,649 $ 6,984 $ 6,592 $ 6,151 $ 5,678 $ 5,100 $ 4,666
Contributions in Relation to the Actuarially Determined
Contribution 6,507 6,649 6,984 6,592 6,151 5,678 5,100 4,666
Excess/(Deficiency) of State Contributions
Covered Payroll $ 9,591 $ 9,659 $ 9,315 $ 8,825 $ 8,686 $ 8,209 $ 7,944 $ 7,348
Contribution as a Percentage of the Covered Payroll 67.84 % 68.84 % 74.98 % 74.70 % 70.82 % 69.17 % 64.20 % 63.50%
Note: The schedule is intended to show 10 years. Additional years will be added as they become available.
Notes to the Required Supplementary Information:
Actuarially determined contribution rates are calculated as of January 1, eighteen and thirty months prior
Valuation to the end of the fiscal year in which contributions are reported.
Investment rate of return 6.500%
Inflation 2.75%
Salary increases 2.25%
Cost of living adjustment 2.25%
Mortality PubG-2010 Mortality Table with generational projection per the MP Ultimate scale, as of January 1, 2020.
Actuarial cost method Entry Age Normal
Amortization method Level dollar, closed
Remaining amortization period 20 years as of January 1, 2020
Asset valuation method 5-year non-asymptotic +/- 20%
25% are assumed to retire at age 60 with 15 years of service; 50% are assumed to retire at age 65; 100%
Retirement age are assumed to retire at age 70 with 7 years of service; 5% are assumed to retire at each age between 60
and 65; 15% are assumed to retire at each age between 66 and 69.
C-95
See accompanying Independent Auditors' Report. The notes to the basic financial statements are an integral part of this statement.
THIS PAGE INTENTIONALLY LEFT BLANK
KPMG LLP
Two Financial Center
60 South Street
Boston, MA 02111
Independent Auditors’ 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 Fiscal Committee of the General Court
State of New Hampshire:
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 New Hampshire (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 December 22, 2021. Our report includes an
emphasis of matter paragraph regarding the State adopting the provisions of Governmental Accounting
Standards Board (GASB) Statement No. 84, Fiduciary Activities. Our report includes a reference to other
auditors who audited the financial statements of the Liquor Commission, Lottery Commission, the aggregate
discretely presented component units (University System of New Hampshire, Business Finance Authority of the
State of New Hampshire, Community Development Finance Authority, Pease Development Authority,
Community College System of New Hampshire), New Hampshire Retirement System, New Hampshire Judicial
Retirement Plan and the New Hampshire Public Deposit Investment Pool, as described in our report on the
State’s financial statements. This report does not include the results of the other auditors’ testing of internal
control over financial reporting or compliance and other matters that are reported on separately by those
auditors. The financial statements of the New Hampshire Public Deposit Investment Pool and the Business
Finance Authority of the State of New Hampshire were not audited in accordance with Government Auditing
Standards, and accordingly, this report does not include reporting on internal control over financial reporting or
instances of reportable noncompliance associated with the New Hampshire Public Deposit Investment Pool
and the Business Finance Authority of the State of New Hampshire.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the State’s internal control over
financial reporting (internal control) as a basis for designing 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’s internal control. Accordingly, we do not express an
opinion on the effectiveness of the State’s internal control.
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 combination 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. 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.
KPMG LLP, a Delaware limited liability partnership and a member firm of the
KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
D-1
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
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 were not
identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we
consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the
accompanying schedule of findings and questioned costs as item 2021-001 that we consider to be a significant
deficiency.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the State’s financial statements are free from material
misstatement, we 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. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
The State’s Response to Finding
The State’s response to the finding identified in our audit is described in the accompanying schedule of findings
and questioned costs. The State’s response was not subjected to the auditing procedures applied in the audit
of the financial statements and, accordingly, we express no opinion on the response.
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’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 State’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Boston, Massachusetts
December 22, 2021
D-2
KPMG LLP
Two Financial Center
60 South Street
Boston, MA 02111
Independent Auditors’ 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
the Uniform Guidance
To the Fiscal Committee of the General Court
State of New Hampshire:
Report on Compliance for Each Major Federal Program
We have audited the State of New Hampshire’s (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 for the year ended June 30, 2021. The State’s major federal programs are
identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned
costs.
The State’s basic financial statements include the operations of the University System of New Hampshire
(UNH), Pease Development Authority (PDA), the Community Development Finance Authority (CDFA), and the
Community College System of New Hampshire (CCSNH), which expended federal awards which are not
included in the State’s schedule of expenditures of federal awards for the year ended June 30, 2021. Our audit,
described below, did not include the operations of UNH, PDA, CDFA, and CCSNH because those component
units separately engaged auditors to perform audits in accordance with the Uniform Guidance, if required.
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.
Auditors’ 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 conducted our audit 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’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 modified and unmodified opinions on compliance
for major federal programs. However, our audit does not provide a legal determination of State’s compliance.
Basis for Qualified (Scope Limitation) Opinion on the Medicaid Cluster
As described in the accompanying schedule of findings and questioned costs, we were unable to obtain
sufficient appropriate audit evidence supporting the State’s compliance with the Special Tests and Provisions –
Medicaid National Correct Coding Initiative applicable to the Medicaid Cluster (ALN # 93.775, 93.777 and
D-3
KPMG LLP, a Delaware limited liability partnership and a member firm of
the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
93.778) as described in finding 2021-035. Consequently, we were unable to determine whether the State
complied with the requirement applicable to that program.
Basis for Qualified Opinions on Certain Major Federal Programs
As described in the accompanying schedule of findings and questioned costs, the State did not comply with
requirements regarding the following:
Assistance Report
Finding # Program Name Compliance Requirement Page
Listing #
Number
2021-003 10.551 SNAP Cluster Special Tests and Provisions – ADP F-9
10.561 System for SNAP
2021-004 10.551 SNAP Cluster Special Tests and Provisions – EBT Card F-11
10.561 Security
2021-009 17.225 Unemployment Insurance Reporting F-21
2021-011 21.019 Coronavirus Relief Fund Subrecipient Monitoring F-25
2021-012 21.023 Emergency Rental Subrecipient Monitoring F-28
Assistance Program
2021-017 84.425 Educational Stabilization Subrecipient Monitoring F-39
Fund
2021-019 93.323 Epidemiology and Procurement, Suspension and Debarment F-43
Laboratory Capacity for
Infectious Diseases
2021-020 93.323 Epidemiology and Reporting F-45
Laboratory Capacity for
Infectious Diseases
2021-021 93.323 Epidemiology and Subrecipient Monitoring F-47
Laboratory Capacity for
Infectious Diseases
2021-024 93.558 Temporary Assistance for Matching, Level of Effort and Earmarking – F-55
Needy Families Maintenance of Effort
2021-026 93.558 Temporary Assistance for Eligibility F-60
Needy Families
2021-027 93.568 Low Income Home Energy Subrecipient Monitoring F-62
Assistance
2021-028 93.568 Low Income Home Energy Reporting F-65
Assistance
2021-033 93.775 Medicaid Cluster Eligibility F-75
93.777
93.778
Compliance with such requirements is necessary, in our opinion, for the State to comply with the requirements
applicable to the identified major federal programs.
D-4
Qualified Opinions on Major Federal Programs
In our opinion, except for the possible effects of the matters descried in the Basis for Qualified (Scope
Limitation) Opinion paragraph and except for the noncompliance described in the Basis for Qualified Opinions
on Certain Major Federal Programs paragraph, 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 the major
federal programs listed in the Bases for Qualified Opinions paragraphs for the year ended June 30, 2021.
Unmodified Opinions on Each of the Other Major Federal Programs
In our opinion, 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 auditors’ results section of the accompanying schedule of findings and questioned costs for the
year ended June 30, 201.
Other Matters
The results of our auditing procedures disclosed other instances of noncompliance which are required to be
reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of
findings and questioned costs as items 2021-006, 2021-007, 2021-010, 2021-013, 2021-014, 2021-015, 2021-
023, 2021-025, 2021-029, 2021-030, 2021-032, and 2021-034. Our opinion on each major federal program is
not modified with respect to these matters.
The State’s responses to the noncompliance findings identified in our audit are described in the accompanying
schedule of findings and questioned costs. The State is also responsible for preparing a corrective action plan
to address each audit finding included in our auditors’ report. The State’s responses and corrective action plan
were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express
no opinion on the responses or the corrective action plan.
Report on Internal Control Over Compliance
Management of the State 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.
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 that 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 consider the deficiencies in internal control over compliance
described in the accompanying schedule of findings and questioned costs as items 2021-004, 2021-009, 2021-
D-5
010, 2021-011, 2021-012. 2021-013, 2021-015, 2021-017, 2021-019, 2021-020, 2021-021, 2021-024, 2021-
026, 2021-027, 2021-028 and 2021-035 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 as items 2021-002, 2021-003, 2021-005, 2021-006,
2021-007, 2021-008, 2021-014, 2021-016, 2021-018, 2021-022, 2021-023, 2021-025, 2021-029, 2021-030,
2021-031, 2021-032, 2021-033, 2021-034 and 2021-036 to be significant deficiencies.
The State’s responses to the internal control over compliance findings identified in our audit are described in
the accompanying schedule of findings and questioned costs. The State is also responsible for preparing a
corrective action plan to address each audit finding included in our auditors’ report. The State’s responses and
corrective action plan were not subjected to the auditing procedures applied in the audit of compliance and,
accordingly, we express no opinion on the responses or the corrective action plan.
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.
Report on Schedule of Expenditures of Federal Awards Required by the 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 as of and for the year ended June 30, 2021, and the related notes to the financial
statements, which collectively comprise State’s basic financial statements. We issued our report thereon dated
December 22, 2021 which contained unmodified opinions on those financial statements. Our audit was
conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic
financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes
of additional analysis as required by the Uniform Guidance and is not a required part of the basic 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 basic financial statements. The information
has been subjected to the auditing procedures applied in the audit of the basic 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, the schedule of expenditures of federal awards is fairly stated in all
material respects in relation to the basic financial statements as a whole.
Boston, Massachusetts
June 29, 2022
D-6
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Agriculture
1000 10.025 Plant and Animal Disease, Pest Control, and Animal Care
167,577 0% -
1800
1800 10.170 Specialty Crop Block Grant Program – Farm Bill 216,085 0% -
5600 10.534 Child and Adult Care Food Program (CACFP) Meal Service
19,970 70% 14,064
Training Grants
9500 10.542 Pandemic EBT Food Benefits (Note 3)
6,340,623 0% -
Supplemental Nutrition Assistance Program (SNAP) Cluster
9500 10.551 Supplemental Nutrition Assistance Program (Note 3,8) 97,154,282 0% -
9500 10.551 COVID-19 Supplemental Nutrition Assistance Program (Note
66,120,106 163,274,388 0% - -
3,8)
9500 10.561 State Administrative Matching Grants for the Supplemental
10,059,202 0% -
Nutrition Assistance Program (Note 8)
SNAP Cluster Total 173,333,590 0% -
Child Nutrition Cluster
5600 10.553 School Breakfast Program (Note 8) 7,306,394 100% 7,302,959
5600 10.553 COVID-19 School Breakfast Program (Note 8) 2,197,975 9,504,369 100% 2,197,975 9,500,934
5600 10.555 National School Lunch Program (Note 3,8)
25,467,179 100% 25,448,828
1400
5600 10.555 COVID-19 National School Lunch Program (Note 3,8) 4,571,827 30,039,006 100% 4,571,827 30,020,655
5600 10.556 Special Milk Program for Children (Note 8) 7,886 100% 7,886
5600 10.559 Summer Food Service Program for Children (Note 3,8)
1,456,852 98% 1,433,095
1400
5600 10.559 COVID-19 Summer Food Service Program for Children
1,971,138 3,427,990 99% 1,971,138 3,404,233
1400 (Note 3,8)
5600 10.579 Child Nutrition Discretionary Grants Limited Availability
42,089 100% 42,089
(Note 8)
Child Nutrition Cluster Total 43,021,340 100% 42,975,797
9500 10.557 WIC Special Supplemental Nutrition Program for Women, Infants
7,603,113 34% 2,585,058
and Children
9500 10.557 COVID-19 WIC Special Supplemental Nutrition Program for
802,078 8,405,191 31% 61,566 2,646,624
Women, Infants and Children
5600 10.558 Child and Adult Care Food Program (Note 3)
2,191,645 97% 2,127,985
1400
5600 10.558 COVID-19 Child and Adult Care Food Program (Note 3)
702,816 2,894,461 98% 702,816 2,830,801
5600 10.560 State Administrative Expenses for Child Nutrition
871,138 0% -
1400
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-1
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Food Distribution Cluster
9500 10.565 Commodity Supplemental Food Program (Note 3,8) 1,289,210 16% 202,529
1400 10.568 Emergency Food Assistance Program (Administrative Costs)
222,844 93% 206,884
(Note 8)
1400 10.568 COVID-19 Emergency Food Assistance Program (Administrative
571,138 793,982 98% 571,138 778,022
Costs) (Note 8)
1400 10.569 Emergency Food Assistance Program (Food Commodities)
3,015,268 100% 3,015,268
(Note 3,8)
1400 10.569 COVID-19 Emergency Food Assistance Program (Food
1,357,345 4,372,613 100% 1,357,345 4,372,613
Commodities) (Note 3,8)
Food Distribution Cluster Total 6,455,805 83% 5,353,164
9500 10.576 Senior Farmers Market Nutrition Program 81,172 9% 6,995
9500 10.578 WIC Grants to States (WGS) 5,244 0% -
5600 10.582 Fresh Fruit and Vegetable Program 1,197,096 93% 1,117,686
3500 10.664 Cooperative Forestry Assistance 349,611 46% 159,279
Forest Service Schools and Roads Cluster
5600 10.665 Schools and Roads – Grants to States (Note 8) 384,220 100% 384,220
- 10.666 Schools and Roads – Grants to Counties (Note 8) - 0% -
Forest Service Schools and Roads Cluster Total 384,220 100% 384,220
3500 10.676 Forest Legacy Program 44,362 0% -
3500 10.680 Forest Health Protection 115,320 2% 2,508
9600 10.683 National Fish and Wildlife Foundation 51,953 0% -
7500 10.912 Environmental Quality Incentives Program (EQIP) 15,893 0% -
4400 10.916 Watershed Rehabilitation Program 49,311 0% -
Department of Agriculture Total 244,019,962 23% 55,491,138
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-2
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Commerce
7500 11.407 Interjurisdictional Fisheries Act of 1986 26,073 0% -
7500 11.417 Sea Grant Support (Subaward # NA19OAR4170397 from the Wells
8,350 0% -
National Estuarine Research Reserve NOAA Grant)
4400 11.419 Coastal Zone Management Administration Awards 1,358,167 12% 169,292
7500 11.420 Coastal Zone Management Estuarine Research Reserves 576,187 0% -
4400 11.463 Habitat Conservation 129,630 0% -
4400 11.473 Office for Coastal Management 8,565 0% -
7500 11.474 Atlantic Coastal Fisheries Cooperative Management Act 220,572 0% -
7500 11.999 Marine Debris Program 339,946 0% -
Department of Commerce Total 2,667,490 6% 169,292
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-3
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Defense
2200 12.002 Procurement Technical Assistance for Business Firms 337,045 0% -
4400 12.113 State Memorandum of Agreement Program for the Reimbursement of
380,231 0% -
Technical Services
1200 12.400 Military Construction, National Guard 1,339,575 0% -
1200 12.401 National Guard Military Operations and Maintenance (O&M) Projects
23,719,055 0% -
2200 12.617 Economic Adjustment Assistance for State Governments 236,250 0% -
Department of Defense Total 26,012,156 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-4
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Housing and Urban Development
9500 14.231 Emergency Solutions Grant Program 2,684,904 95% 2,541,607
9500 14.241 Housing Opportunities for Persons With AIDS 408,834 100% 407,357
9500 14.267 Continuum of Care Program 3,901,205 97% 3,784,175
Department of Housing and Urban Development Total 6,994,943 96% 6,733,139
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-5
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of the Interior
Fish and Wildlife Cluster
7500 15.605 Sport Fish Restoration (Note 8) 3,141,047 0% 14,356
7500 15.611 Wildlife Restoration and Basic Hunter Education (Note 8) 3,455,212 5% 188,592
7500 15.626 Enhanced Hunter Education and Safety (Note 8) 71,163 0% -
Fish and Wildlife Cluster Total 6,667,422 3% 202,948
7500 15.608 Fish and Wildlife Management Assistance 18,140 0% -
7500 15.615 Cooperative Endangered Species Conservation Fund 43,337 0% -
4400 15.616 Clean Vessel Act 139,523 17% 23,769
7500 15.631 Partners for Fish and Wildlife 7,559 0% -
7500 15.634 State Wildlife Grants 628,431 20% 128,194
7500 15.657 Endangered Species Recovery Implementation 3,118 0% -
9600 15.663 NFWF-USFWS Conservation Partnership 86,376 0% -
7500 15.684 White-nose Syndrome National Response Implementation 3,569 0% -
4400 15.810 National Cooperative Geologic Mapping 67,632 0% -
4400 15.814 National Geological and Geophysical Data Preservation 8,765 0% -
3500 15.904 Historic Preservation Fund Grants-In-Aid 594,737 7% 42,508
3500 15.916 Outdoor Recreation Acquisition, Development and Planning 490,931 95% 467,367
4400 15.980 National Ground-Water Monitoring Network 6,000 0% -
Department of the Interior Total 8,765,540 10% 864,786
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-6
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Justice
2000 16.017 Sexual Assault Services Formula Program 382,144 96% 365,810
2000 16.034 Coronavirus Emergency Supplemental Funding Program 2,792,697 77% 2,139,151
2000 16.320 Services for Trafficking Victims 199,732 79% 157,374
9500 16.540 Juvenile Justice and Delinquency Prevention 482,756 0% -
2000 16.550 State Justice Statistics Program for Statistical Analysis Centers 1,933 0% -
2000 16.554 National Criminal History Improvement Program (NCHIP) 52,764 0% -
2000 16.575 Crime Victim Assistance 10,052,149 89% 8,973,346
2000 16.582 Crime Victim Assistance/Discretionary Grants 314,667 99% 311,960
2000 16.585 Drug Court Discretionary Grant Program 88,408 95% 83,619
2000 16.588 Violence Against Women Formula Grants 972,787 79% 764,675
2000 16.593 Residential Substance Abuse Treatment for State Prisoners 104,921 88% 91,876
4600 16.606 State Criminal Alien Assistance Program 38,197 0% -
2000 16.609 Project Safe Neighborhoods 77,399 90% 69,818
2300 16.710 Public Safety Partnership and Community Policing Grants 409,574 0% -
2000 16.735 PREA Program: Strategic Support for PREA Implementation 1,344 0% -
2000 16.738 Edward Byrne Memorial Justice Assistance Grant Program 839,696 1% 10,000
2000 16.741 DNA Backlog Reduction Program
258,433 0% -
2300
2000 16.742 Paul Coverdell Forensic Sciences Improvement Grant Program 224,405 1% 2,500
2300 16.750 Support for Adam Walsh Act Implementation Grant Program 110,492 0% -
2000 16.754 Harold Rogers Prescription Drug Monitoring Program 250,964 0% -
2000 16.816 John R Justice Prosecutors and Defenders Incentive Act 32,981 90% 29,634
2000 16.831 Children of Incarcerated Parents 19,950 90% 17,978
2000 16.838 Comprehensive Opioid Stimulant, and Substance Abuse Program
215,884 94% 202,507
1000
5600 16.839 STOP School Violence 66,657 6% 4,006
2000 16.922 Equitable Sharing Program
142,562 0% -
2300
Department of Justice Total 18,133,496 73% 13,224,254
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-7
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Labor
2700 17.002 Labor Force Statistics 901,395 0% -
3200 17.005 Compensation and Working Conditions 23,200 0% -
Employment Service Cluster
2700 17.207 Employment Service/Wagner - Peyser Funded Activities
1,257,348 0% -
2100 (Note 8)
2700 17.801 Jobs for Veterans State Grants (Note 8)
137,732 0% -
- 17.804 Local Veterans’ Employment Representative (LVER) Program
- 0% -
(Note 8)
Employment Service Cluster Total 1,395,080 0% -
2700 17.225 Unemployment Insurance (Note 4) 91,899,174 0% -
2700 17.225 COVID-19 Unemployment Insurance (Note 4) 889,337,711 981,236,885 0% - -
2200 17.235 Senior Community Service Employment Program 502,283 100% 499,775
2700 17.245 Trade Adjustment Assistance 285,949 0% -
Workforce Investment Opportunity Act (WIOA) Cluster
2200 17.258 WIOA Adult Program (Note 8) 1,333,298 49% 655,373
2200 17.259 WIOA Youth Activities (Note 8) 1,886,215 62% 1,171,920
2200 17.278 WIOA Dislocated Worker Formula Grants (Note 8) 838,981 29% 240,516
WIOA Cluster Total 4,058,494 51% 2,067,809
2700 17.271 Work Opportunity Tax Credit Program (WOTC) 31,752 0% -
2700 17.273 Temporary Labor Certification for foreign Workers 26,211 0% -
2200 17.280 WIOA Dislocated Worker National Reserve Demonstration Grants 1,415,851 96% 1,354,228
2200 17.600 Mine Health and Safety Grants 59,639 94% 56,074
Department of Labor Total 989,936,739 0% 3,977,886
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-8
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Transportation
Highway Planning and Construction Cluster
9600 20.205 Highway Planning and Construction (Note 8) 167,833,203 9% 14,290,012
3500 20.219 Recreational Trails Program (Note 8) 1,243,560 53% 660,707
9600 20.224 Federal Lands Access Program (Note 8) 1,066,682 0% -
- 23.003 Appalachian Development Highway System (Note 8) - 0% -
Highway Planning and Construction Cluster Total
170,143,445 9% 14,950,719
9600 20.106 Airport Improvement Program (Note 6) 1,866,986 100% 1,866,986
9600 20.106 COVID-19 Airports Programs (Note 6) 311,302 2,178,288 100% 311,302 2,178,288
9600 20.200 Highway Research and Development 458,384 21% 96,394
Federal Motor Carrier Safety Administration (FMCSA) Cluster
2300 20.218 Motor Carrier Safety Assistance (Note 8) 1,223,559 0% -
2300 20.237 Motor Carrier Safety Assistance High Priority Activities Grants
22,238 0% -
and Cooperative Agreements (Note 8)
Federal Motor Carrier Safety Association (FMCSA) Cluster Total
1,245,797 0% -
Federal Transit Cluster
- 20.500 Federal Transit Capital Investment Grants (Note 8) - 0% -
9600 20.507 Federal Transit Formula Grants (Note 8) 2,424,980 0% -
9600 20.507 COVID-19 Federal Transit Formula Grants (Note 8) 4,065,872 6,490,852 0% - -
- 20.525 State of Good Repair Grants Program (Note 8) - 0% -
9600 20.526 Bus and Bus Facilities Formula, Competitive, and Low or No
1,494,337 81% 1,206,327
Emissions Program (Note 8)
Federal Transit Cluster Total 7,985,189 15% 1,206,327
Transit Services Program Cluster
9600 20.513 Enhanced Mobility of Seniors and Individuals With Disabilities
2,174,650 99% 2,147,561
(Note 8)
- 20.516 Job Access and Reverse Commute Program (Note 8) - 0% -
- 20.521 New Freedom Program (Note 8)
- 0% -
Transit Services Program Cluster Total 2,174,650 99% 2,147,561
9600 20.215 Highway Training and Education 64,832 83% 54,038
9600 20.223 Transportation Infrastructure Finance and Innovation Act (TIFIA)
21,320,688 0% -
Program
9600 20.505 Metropolitan Transportation Planning and State and Non-Metropolitan
(37,518) 0% -
Planning and Research
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-9
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
9600 20.509 Formula Grants for Rural Areas and Tribal Transit Program 352,941 0% -
9600 20.509 COVID-19 formula Grants for Rural Areas and Tribal Transit Program
7,246,175 7,599,116 85% 6,139,436 6,139,436
Highway Safety Cluster
2300 20.600 State and Community Highway Safety (Note 8) 1,219,460 52% 636,530
- 20.601 Alcohol Impaired Driving Countermeasures Incentive Grants I
- 0% -
(Note 8)
- 20.602 Occupant Protection Incentive Grants (Note 8) - 0% -
` 20.609 Safety Belt Performance Grants (Note 8) - 0% -
- 20.610 State Traffic Safety Information System Improvements Grants
- 0% -
(Note 8)
- 20.611 Incentive Grant Program to Prohibit Racial Profiling (Note 8) - 0% -
- 20.612 Incentive Grant Program to Increase Motorcyclist Safety (Note 8)
- 0% -
- 20.613 Child Safety and Child Booster Seat Incentive Grants (Note 8) - 0% -
2300 20.616 National Priority Safety Programs (Note 8) 2,114,676 13% 279,286
Highway Safety Cluster Total 3,334,136 27% 915,816
2300 20.614 National Highway Traffic Safety Administration (NHTSA)
44,945 0% -
Discretionary Safety Grants and Cooperative Agreement
8100 20.700 Pipeline Safety Program State Base Grant 509,429 0% -
2300 20.703 Interagency Hazardous Materials Public Sector Training and Planning
75,187 99% 74,657
Grants
8100 20.720 State Damage Prevention Program Grants 11,106 0% -
8100 20.721 PHMSA Pipeline Safety Program One Call Grant 46,738 0% -
9600 20.933 National Infrastructure Investments
3,593,495 0% -
1300
Department of Transportation Total 220,747,907 13% 27,763,236
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-10
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Treasury
0202 21.019 Coronavirus Relief Fund (Note 7) 742,996,301 14% 107,084,567
0202 21.023 Emergency Rental Assistance Program 40,000,000 100% 40,000,000
Department of Treasury Total 782,996,301 19% 147,084,567
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-11
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Equal Employment Opportunity Commission
7600 30.999 Employment Discrimination - State and Local Fair Employment
162,370 0% -
Practices Agency Contracts
Equal Employment Opportunity Commission Total 162,370 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-12
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
General Services Administration
1400 39.003 Donation of Federal Surplus Personal Property (Note 3) 7,100 0% -
3200 39.011 Election Reform Payments (Note 5) 258,423 0% -
General Services Administration Total 265,523 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-13
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
National Endowment for the Arts
3500 45.025 Promotion of the Arts - Partnership Agreements 626,140 100% 626,140
3500 45.025 COVID-19 Promotion of the Arts - Partnership Agreements 336,000 962,140 3% 11,124 637,264
3500 45.310 Grants to States 1,328,220 13% 173,795
3500 45.310 COVID-19 Grants to States 23,643 1,351,863 0% - 173,795
National Endowment for the Arts Total 2,314,003 35% 811,059
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-14
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Small Business Administration
2200 59.061 State Trade Expansion 204,771 0% -
Small Business Administration Total 204,771 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-15
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Veterans Administration
4300 64.015 Veterans State Nursing Home Care 8,465,297 0% -
5600 64.124 All-Volunteer Force Educational Assistance 144,838 0% -
1200 64.203 Veterans Cemetery Grants Program 45,331 0% -
Veterans Administration Total 8,655,466 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-16
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Environmental Protection Agency
9500 66.032 State Indoor Radon Grants 55,966 0% -
4400 66.034 Surveys, Studies, Research, Investigations, Demonstrations, and
267,742 0% -
Special Purpose Activities Relating to the Clean Air Act
4400 66.040 Diesel Emissions Reduction Act (DERA) State Grants 170,544 56% 96,031
1800 66.204 Multipurpose Grants to States and Tribes
(8,219) 0% -
9500
4400 66.442 Assistance for Small and Disadvantaged Communities Drinking Water
23,966 100% 23,966
Grant Program (SDWA1459A)
4400 66.444 Lead Testing in School and Child Care Program Drinking Water Grant
9,379 0% -
Program (SDWA1464(d))
4400 66.454 Water Quality Management Planning 88,039 45% 39,339
Clean Water State Revolving Fund Cluster
4400 66.458 Capitalization Grants for Clean Water State Revolving Fund
12,407,385 95% 11,839,174
(Note 8)
- 66.482 Disaster Relief Appropriations Act (DRAA) Hurricane Sandy
Capitalization Grants for Clean Water State Revolving Funds - 0% -
(Note 8)
Clean Water State Revolving Fund Cluster Total 12,407,385 95% 11,839,174
4400 66.460 Nonpoint Source Implementation Grants 437,057 100% 436,598
4400 66.461 Regional Wetland Program Development Grants 188,332 0% -
Drinking Water State Revolving Fund Cluster
4400 66.468 Capitalization Grants for Drinking Water State Revolving Fund
9,875,741 73% 7,210,207
(Note 8)
- 66.483 Disaster Relief Appropriations Act (DRAA) Hurricane Sandy
Capitalization Grants for Drinking Water State Revolving Funds - 0% -
(Note 8)
Drinking Water State Revolving Fund Cluster Total 9,875,741 73% 7,210,207
4400 66.605 Performance Partnership Grants
5,201,098 1% 77,549
9500
4400 66.608 Environmental Information Exchange Network Grant Program and
125,394 0% -
Related Assistance
1800 66.700 Consolidated Pesticide Enforcement Cooperative Agreements 266,288 0% -
4400 66.701 Toxic Substances Compliance Monitoring Cooperative Agreements
101,530 0% -
9500
9500 66.707 TSCA Title IV State Lead Grants Certification of Lead - Based Paint
143,830 0% -
Professionals
4400 66.708 Pollution Prevention Grants Program 161,456 0% -
4400 66.802 Superfund State, Political Subdivision, and Indian Tribe Site - Specific
1,817,794 0% -
Cooperative Agreements
4400 66.804 Underground Storage Tank (UST) Prevention, Detection, and
267,216 0% -
Compliance Program
4400 66.805 Leaking Underground Storage Tank Trust Fund Corrective Action
470,737 0% -
Program
4400 66.817 State and Tribal Response Program Grants 890,830 0% -
Environmental Protection Agency Total 32,962,105 60% 19,722,864
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-17
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Energy
0240 81.041 State Energy Program 442,892 27% 118,348
0240 81.042 Weatherization Assistance for Low-Income Persons 1,741,429 93% 1,615,834
4400 81.086 Conservation Research and Development 51,324 0% -
0240 81.138 State Heating Oil and Propane Program 4,741 0% -
Department of Energy Total 2,240,386 77% 1,734,182
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-18
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Education - -
5600 84.002 Adult Education - Basic Grants to States 1,645,448 87% 1,433,933
5600 84.010 Title I Grants to Local Educational Agencies 40,521,383 99% 40,094,589
5600 84.011 Migrant Education State Grant Program 193,001 29% 55,112
5600 84.013 Title I State Agency Program for Neglected and Delinquent Children
518,508 0% -
and Youth
Special Education Cluster
5600 84.027 Special Education Grants to States (Note 8) 51,006,590 91% 46,502,917
5600 84.173 Special Education Preschool Grants (Note 8) 1,616,076 84% 1,360,990
Special Education Cluster Total 52,622,666 91% 47,863,907
5600 84.048 Career and Technical Education - Basic Grants to States 6,651,682 93% 6,170,138
5600 84.126 Rehabilitation Services Vocational Rehabilitation Grants to States
9,452,766 0% -
5600 84.144 Migrant Education Coordination Program 111,096 1% 1,590
0205 84.161 Rehabilitation Services Client Assistance Program 109,557 0% -
5600 84.177 Rehabilitation Services Independent Living Services for Older
206,200 0% -
Individuals Who Are Blind
9500 84.181 Special Education Grants for Infants and Families 1,831,785 94% 1,728,302
5600 84.184 School Safety National Activities (formerly, Safe and Drug-Free
821,283 37% 303,745
Schools and Communities-National Programs)
5600 84.187 Supported Employment Services for Individuals with the Most
102,312 0% -
Significant Disabilities
5600 84.196 Education for Homeless Children and Youth 191,436 76% 145,694
5600 84.282 Charter Schools 74 0% -
5600 84.287 Twenty-First Century Community Learning Centers 4,815,669 95% 4,558,016
5600 84.323 Special Education - State Personnel Development 776,945 81% 631,847
5600 84.358 Rural Education 524,535 99% 517,640
5600 84.365 English Language Acquisition State Grants 736,101 86% 629,562
5600 84.367 Supporting Effective Instruction State Grants 6,910,904 94% 6,513,234
5600 84.369 Grants for State Assessments and Related Activities 2,373,299 71% 1,693,848
5600 84.372 Statewide Longitudinal Data Systems 84,108 0% -
5600 84.377 School Improvement Grants 27,026 100% 26,999
5600 84.419 Preschool Development Grants (Partially Funded via Subaward #HS-
2018-ACF-OCC-TP-1379 from the University of New Hampshire) 10,577 0% -
5600 84.424 Student Support and Academic Enrichment Program 3,965,274 95% 3,775,756
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-19
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
5600 84.425 Education Stabilization Fund
84.425 C - Coronavirus Governor's Emergency Education
423,899 90% 381,075.00
Relief (GEER) Fund
84.425 D - Coronavirus Elementary and Secondary School
17,981,223 99% 17,855,059.00
Emergency Relief (ESSER) Fund
84.425 R - Coronavirus Response and Relief Supplemental
Appropriations Act, 2021 Emergency Assistance for Non- 3,793 0% -
Public Schools (CRRSA EANS) Program
84.425 U - Coronavirus American Rescue Plan Elementary
and Secondary School Emergency Relief (ARP ESSER) 5,541 18,414,456 99% - 18,236,134
5600 84.902 NAEP State Coordinator 170,259 0% -
5600 84.999 Department of Education Generic 345 0% -
Department of Education Total 153,788,695 87% 134,380,046
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-20
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
U.S. Election Assistance Commission
3200 90.401 Help America Vote Act Requirements Payments (Note 5) 103,617 0% -
3200 90.404 2018 HAVA Election Security Grants (Note 5) 345,959 0% -
3200 90.404 COVID-19 2018 HAVA Election Security Grants (Note 5) 3,269,494 3,615,453 73% 2,628,240 2,628,240
2200 90.601 Northern Border Regional Development
33,700 0% -
3500
U.S. Election Assistance Commission Total 3,752,770 70% 2,628,240
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-21
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Health and Human Services
9500 93.041 Special Programs for the Aging, Title VII, Chapter 3, Programs for
14,168 0% -
Prevention of Elder Abuse, Neglect, and Exploitation
9500 93.042 Special Programs for the Aging, Title VII, Chapter 2, Long Term Care
141,972 0% -
Ombudsman Services for Older Individuals
9500 93.042 COVID-19 Special Programs for the Aging, Title VII, Chapter 2, Long
400 142,372 0% - -
Term Care Ombudsman Services for Older Individuals
9500 93.043 Special Programs for the Aging, Title III, Part D, Disease Prevention
102,974 100% 102,921
and Health Promotion Services
Aging Cluster
9500 93.044 Special Programs for the Aging, Title III, Part B, Grants for
1,373,777 62% 851,518
Supportive Services and Senior Centers (Note 8)
9500 93.044 COVID-19 Special Programs for the Aging, Title III, Part B,
70,306 1,444,083 64% 70,298 921,816
Grants for Supportive Services (Note 8)
9500 93.045 Special Programs for the Aging, Title III, Part C, Nutrition
3,869,105 100% 3,865,086
Services (Note 8)
9500 93.045 COVID-19 Special Programs for the Aging, Title III, Part C,
2,327,592 6,196,697 100% 2,325,370 6,190,456
Nutrition Services (Note 8)
9500 93.053 Nutrition Services Incentive Program (Note 8) 1,197,180 100% 1,195,984
Aging Cluster Total 8,837,960 94% 8,308,256
9500 93.048 Special Programs for the Aging, Title IV, and Title II, Discretionary
753,159 45% 336,951
Projects
9500 93.048 COVID-19 Special Programs for the Aging, Title IV, and Title II,
84,304 837,463 50% 84,230 421,181
Discretionary Projects
9500 93.052 National Family Caregiver Support, Title III, Part E 664,811 100% 661,878
9500 93.052 COVID-19 National Family Caregiver Support, Title III, Part E 279,206 944,017 100% 279,027 940,905
9500 93.069 Public Health Emergency Preparedness 137,997 0% -
9500 93.070 Environmental Public Health and Emergency Response
2,434,642 12% 295,193
4400
9500 93.071 Medicare Enrollment Assistance Program 77,506 69% 53,278
9500 93.074 Hospital Preparedness Program (HPP) and Public Health Emergency
4,518,049 0% -
Preparedness (PHEP) Aligned Cooperative Agreement
5600 93.079 Cooperative Agreements to Promote Adolescent Health through School-
69,900 0% -
Based HIV/STD Prevention and School-Based Surveillance
9500 93.092 Affordable Care Act (ACA) Personal Responsibility Education
245,331 0% -
Program
9500 93.103 Food and Drug Administration Research (Partially Funded via
1800 Subaward #G-SE-2004-02364 from the USFDA/AFDO) 782,462 0% -
7500
5600 93.104 Comprehensive Community Mental Health Services for Children with
1,614,846 91% 1,474,754
Serious Emotional Disturbances(SED)
9500 93.110 Maternal and Child Health Federal Consolidated Programs 665,482 74% 490,004
9500 93.116 Project Grants and Cooperative Agreements for Tuberculosis Control
132,575 0% -
Program
9500 93.130 Cooperative Agreements to States/Territories for the Coordination and
156,570 0% -
Development of Primary Care Offices
9500 93.136 Injury Prevention and Control Research and State and Community
2,650,546 62% 1,650,745
Based Programs
9500 93.150 Projects for Assistance In Transition From Homelessness (PATH) 312,402 96% 300,402
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-22
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
9500 93.197 Childhood Lead Poisoning Prevention Projects, State and Local
Childhood Lead Poisoning Prevention and Surveillance of Blood Lead 562,679 33% 186,140
Levels in Children
9500 93.217 Family Planning Services 378,576 38% 143,358
9500 93.236 Grants to States to Support Oral Health Workforce Activities 250,266 0% -
4400 93.240 State Capacity Building 124,060 15% 19,139
9500 93.241 State Rural Hospital Flexibility Program 370,441 0% -
9500 93.243 Substance Abuse and Mental Health Services Projects of Regional and
5600 National Significance 5,844,005 55% 3,222,716
2300
9500 93.251 Early Hearing Detection and Intervention 141,690 0% -
9500 93.268 Immunization Cooperative Agreements (Note 3) 14,260,728 3% 397,438
9500 93.268 COVID-19 Immunization Cooperative Agreements (Note 3) 1,270,690 15,531,418 4% 227,100 624,538
9500 93.270 Viral Hepatitis Prevention and Control 53,109 0% -
9500 93.301 Small Rural Hospital Improvement Grant Program 130,426 0% -
9500 93.301 COVID-19 Small Rural Hospital Improvement Grant Program 1,043,873 1,174,299 0% - -
9500 93.305 Prevention and Public Health Funds (PPHF) 2018: Office of Smoking
and Health-National State-Based Tobacco Control Programs 44,300 0% -
9500 93.314 Early Hearing Detection and Intervention Information System (EHDI-
115,431 0% -
IS) Surveillance Program
9500 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases
2,145,627 3% 69,567
(ELC)
9500 93.323 COVID-19 Epidemiology and Laboratory Capacity for Infectious
50,616,812 52,762,439 34% 17,876,554 17,946,121
Diseases (ELC)
-
9500 93.324 State Health Insurance Assistance Program 235,985 65% 152,870
9500 93.336 Behavioral Risk Factor Surveillance Survey 335,751 0% -
9500 93.354 Public Health Emergency Response: Cooperative Agreement for
2,221,337 36% 807,229
Emergency Response: Public Health Crisis Response
Head Start Cluster
- 93.356 Head Start Disaster Recovery from Hurricanes Harvey, Irma, and
- 0% -
Maria (Note 8)
9500 93.600 Head Start (Note 8) 131,340 0% -
Head Start Cluster Total 131,340 0% -
9500 93.366 State Actions to Improve Oral Health Outcomes and Partner Actions to
287,983 0% -
Improve Oral Health Outcomes
5600 93.369 Administration for Community Living (ACL) Independent Living State
238,459 94% 225,254
Grants
9500 93.387 National and State Tobacco Control Program 830,226 33% 273,086
2400 93.413 The State Flexibility to Stabilize the Market Grant Program 51,239 0% -
9500 93.426 Improving the Health of Americans through Prevention and
1,607,372 40% 648,903
Management of Diabetes and Heart Disease and Stroke
9500 93.436 Well-Integrated Screening and Evaluation for Women Across the
181,727 0% -
Nation (WISEWOMAN)
9500 93.448 Food Safety and Security Monitoring Project 100,941 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-23
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
9500 93.478 Preventing Maternal Deaths: Supporting Maternal Mortality Review
132,244 66% 86,730
Committees
Child Care and Development Fund (CCDF) Cluster
- 93.489 Child Care Disaster Relief (Note 8) - 0% -
9500 93.575 Child Care and Development Block Grant (Note 8) 2,933,953 0% -
9500 93.575 COVID-19 Child Care and Development Block Grant
22,391,362 25,325,315 0% - -
(Note 8)
9500 93.596 Child Care Mandatory and Matching Funds of the Child
10,159,844 0% -
Care and Development Fund (Note 8)
CCDF Cluster Total 35,485,159 0% -
9500 93.498 Provider Relief Fund and American Rescue Plan (ARP) Rural
807,287 0% -
Distribution
9500 93.556 Marylee Allen Promoting Safe and Stable Families 632,517 0% -
9500 93.558 Temporary Assistance for Needy Families (TANF) 30,154,500 0% -
9500 93.563 Child Support Enforcement
13,570,481 0% -
2700
9500 93.566 Refugee and Entrant Assistance State Replacement Designee
1,102,441 0% -
Administered Programs
0240 93.568 Low-Income Home Energy Assistance 22,920,940 99% 22,742,259
0240 93.568 COVID-19 Low-Income Home Energy Assistance 3,126,597 26,047,537 100% 3,126,597 25,868,856
9500 93.569 Community Services Block Grant 3,744,881 0% -
9500 93.569 COVID-19 Community Services Block Grant 312,654 4,057,535 0% - -
9500 93.576 Refugee and Entrant Assistance - Discretionary Grants 17,784 0% -
1000 93.586 State Court Improvement Program 289,394 0% -
9500 93.597 Grants to States for Access and Visitation Programs 80,556 0% -
9500 93.599 Chafee Education and Training Vouchers Program (ETV) 123,643 0% -
9500 93.603 Adoption and Legal Guardianship Incentive Payments 91,154 0% -
9700 93.630 Developmental Disabilities Basic Support and Advocacy Grants 627,660 25% 154,858
9700 93.631 Developmental Disabilities Projects of National Significance
15,586 0% -
(Subaward #18-033 from the University of New Hampshire)
2000 93.643 Children's Justice Grants to States 90,080 69% 61,773
9500 93.645 Stephanie Tubbs Jones Child Welfare Services Program 749,716 0% -
9500 93.658 Foster Care Title IV-E 17,734,019 0% -
9500 93.658 COVID-19 Foster Care - Title IV-E 523,214 18,257,233 0% - -
9500 93.659 Adoption Assistance 3,940,313 0% -
9500 93.659 COVID-19 Adoption Assistance 358,735 4,299,048 0% - -
9500 93.665 Emergency Grants to Address Mental and Substance Use Disorders
815,970 0% -
During COVID-19
9500 93.667 Social Services Block Grant 7,525,711 73% 5,494,808
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-24
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
9500 93.669 Child Abuse and Neglect State Grants 230,252 0% -
9500 93.670 Child Abuse and Neglect Discretionary Activities 345,920 41% 143,125
9500 93.671 Family Violence Prevention and Services/Domestic Violence Shelter
778,843 0% -
and Support Services
9500 93.671 COVID-19 Family Violence Prevention and Services/Domestic
76,529 855,372 0% - -
Violence Shelter and Support Services
9500 93.674 John H Chafee Foster Care Program for Successful Transition to
868,791 0% -
Adulthood
9500 93.687 Maternal Opioid Misuse Model 169,325 48% 81,736
9500 93.767 Children`s Health Insurance Program 8,397 0% -
Medicaid Cluster
2000 93.775 State Medicaid Fraud Control Units (Note 8) 517,055 0% -
9500 93.777 State Survey and Certification of Health Care Providers and
1,471,229 0% -
Suppliers (Title XVIII) Medicare (Note 8)
9500 93.778 Medical Assistance Program (Note 8) 1,468,255,778 0% -
9500 93.778 COVID-19 Medical Assistance Program (Note 8) 118,188,404 1,586,444,182 0% - -
Medicaid Cluster Total 1,588,432,466 0% -
9500 93.788 Opioid State Targeted Response (STR) 25,119,799 92% 23,186,265
9500 93.791 Money Follows the Person Rebalancing Demonstration 971,991 0% -
9500 93.817 Hospital Preparedness Program (HPP) Ebola Preparedness and
901 0% -
Response Activities
9500 93.870 Maternal, Infant, and Early Childhood Home Visiting Grant Program 2,425,781 80% 1,942,688
9500 93.889 National Bioterrorism Hospital Preparedness Program 1,561,576 86% 1,342,990
9500 93.898 Cancer Prevention and Control Programs for State, Territorial and
1,622,578 17% 271,864
Tribal Organizations
9500 93.913 Grants to States for Operation of State Offices of Rural Health 240,754 0% -
9500 93.917 HIV Care Formula Grants 1,121,679 3% 29,085
9500 93.940 HIV Prevention Activities, Health Department Based 720,536 30% 214,033
9500 93.945 Assistance Programs for Chronic Disease Prevention and Control 276,449 28% 78,524
9500 93.946 Cooperative Agreements to Support State-Based Safe Motherhood and
144,114 0% -
Infant Health Initiative Programs
9500 93.958 Block Grants for Community Mental Health Services 2,486,241 96% 2,380,705
9500 93.958 COVID-19 Block Grants for Community Mental Health Services 43,080 2,529,321 96% 42,210 2,422,915
9500 93.959 Block Grants for Prevention and Treatment of Substance Abuse 4,194,339 83% 3,464,662
9500 93.977 Sexually Transmitted Diseases (STD) Prevention and Control Grants
297,555 0% -
9500 93.991 Preventive Health and Health Services Block Grant 1,891,034 42% 803,336
9500 93.994 Maternal and Child Health Services Block Grant to the States 1,617,477 36% 578,070
Department of Health and Human Services Total 1,888,871,978 6% 104,513,311
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-25
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Social Security Administration
Disability Insurance/SSI Cluster
5600 96.001 Social Security, Disability Insurance (Note 8) 6,803,147 0% -
- 96.006 Supplemental Security Income (Note 8) - 0% -
Disability Insurance/SSI Cluster Total 6,803,147 0% -
Social Security Administration Total 6,803,147 0% -
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-26
State of New Hampshire
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended 6/30/2021
Pass Amounts
State ALN 2021 Thru Provided to
Agency Number Program or Cluster Title Expenditures % Subrecipients
Department of Homeland Security
2300 97.008 Non-Profit Security Program 56,790 100% 56,790
2300 97.012 Boating Safety Financial Assistance 1,409,930 0% -
0240 97.023 Community Assistance Program State Support Services Element (CAP-
108,837 0% -
SSSE)
2300 97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters)
111,923,447 10% 11,012,640
(Note 7)
2300 97.039 Hazard Mitigation Grant 457,629 100% 457,629
4400 97.041 National Dam Safety Program 77,319 0% -
2300 97.042 Emergency Management Performance Grants 3,037,236 40% 1,203,389
2300 97.043 State Fire Training Systems Grants 213,058 0% -
2300 97.044 Assistance to Firefighters Grant 143,418 0% -
2300 97.047 BRIC: Building Resilient Infrastructure and Communities 262,712 100% 262,676
2700 97.050 Presidential Declared Disaster Assistance to Individuals and
92,840,079 0% -
Households - Other Needs
2300 97.067 Homeland Security Grant Program 2,381,522 77% 1,830,168
Department of Homeland Security Total 212,911,977 7% 14,823,292
Grand Total of All Federal Assistance 4,613,207,725 12% 533,921,292
The accompanying notes are an integral part of this schedule
Bolded programs were audited during the 2021 audit
E-27
STATE OF NEW HAMPSHIRE
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
NOTE 1 – PURPOSE OF SCHEDULE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Purpose of Schedule
The accompanying Schedule of Expenditures of Federal Awards (the Schedule or the SEFA) is a supplementary schedule to
the State’s basic financial statements and is presented for purposes of additional analysis. The Schedule is required by the
U.S. Code of Federal Regulations Title 2; Grants and Agreements Part 200; Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
B. Reporting Entity
The reporting entity is defined in the notes to the basic financial statements of the State of New Hampshire, which are
presented in Section C of this report. The accompanying Schedule of Expenditures of Federal Awards includes all federal
financial assistance programs of the State of New Hampshire reporting entity for the year ended June 30, 2021, with the
exception of certain component units identified in Note 1 of the basic financial statements.
C. Basis of Presentation
The information in the accompanying Schedule of Expenditures of Federal Awards is presented in accordance with the U.S.
Code of Federal Regulations Title 2; Grants and Agreements Part 200; Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards. Per §200.1 Definitions:
Federal award has the meaning, depending on the context, in either paragraph (1) or (2) of this definition:
(1) (i) The Federal financial assistance that a recipient receives directly from a Federal awarding agency or
indirectly from a pass-through entity; or
(ii) The cost-reimbursement contract under the Federal Acquisition Regulations that a non-Federal entity
receives directly from a Federal awarding agency or indirectly from a pass-through entity.
(2) The instrument setting forth the terms and conditions. The instrument is the grant agreement, cooperative
agreement, other agreement for assistance covered in paragraph (2) of the definition of Federal financial
assistance or the cost-reimbursement contract awarded under the Federal Acquisition Regulations.
(3) Federal award does not include other contracts that a Federal agency uses to buy goods or services from a
contractor or a contract to operate Federal Government owned, contractor operated facilities (GOCOs).
Federal financial assistance means:
(1) Assistance that non-Federal entities receive or administer in the form of grants, cooperative agreements,
non-cash contributions or donations of property (including donated surplus property), direct
appropriations, food commodities, and other financial assistance (except assistance listed in paragraph (2)
of this definition).
E-28
NOTE 1 – PURPOSE OF SCHEDULE AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(2) Federal financial assistance also includes assistance that non-Federal entities receive or administer in the
form of loans, loan guarantees, interest subsidies; and insurance.
(3) Federal financial assistance does not include amounts received as reimbursement for services rendered to
individuals as described in § 200.502(h) and (i) specifying:
(h) Medicare payments to a non-Federal entity for providing patient care services to Medicare-eligible
individuals are not considered Federal awards expended under this part.
(i) Medicaid payments to a subrecipient for providing patient care services to Medicaid-eligible
individuals unless a state requires the funds to be treated as Federal awards expended because
reimbursement is on a cost-reimbursement basis.
The State of New Hampshire does require Medicaid payments to subrecipients be treated as Federal awards reimbursing
those costs on a cost reimbursement basis. Medicaid payments to subrecipients are reported on the schedule.
Nonmonetary federal assistance, as described in Note 3, is reported as federal financial assistance on the Schedule.
Type A and Type B Programs – §200.518 establishes the levels of expenditures to be used in defining for the State
of New Hampshire Type A and Type B federal financial assistance programs. Type A programs are those
programs and clusters of programs that equal or exceed $13,839,623 in federal expenditures, distributions, or
issuances for the year ended June 30, 2021. Programs selected for audit are in bold print in the accompanying
Schedule.
Pass Thru Percent – The amount of federal funds, expressed as a percentage of expenditures, passed through by
State agencies to various non-state subrecipients.
Amounts Provided to Subrecipients – The amount of federal funds passed through by State agencies to various
non-state subrecipients expressed in dollars.
D. Basis of Accounting
Expenditures for all programs are presented in the Schedule on the cash basis of accounting. Expenditures are recorded when
paid rather than when the obligation is incurred.
For the Public Assistance Disaster Grants, expenditures are only eligible for reimbursement subsequent to approved project
worksheets from the U.S. Department of Homeland Security regardless of the date the underlying expenditures were incurred.
For the Public Assistance Disaster Grants, the Schedule includes cash reimbursements received during fiscal year 2021.
Underlying expenditures of $61,060,245, $50,832,895, and $30,307 were incurred in fiscal years 2021, 2020 and 2018,
respectively.
The Schedule reflects federal expenditures for all individual grants, which were active during the fiscal year and are net of
program refunds applicable to a program.
E. Categorization of Expenditures
The categorization of expenditures by program included in the Schedule is based upon the System of Award Management’s
Assistance Listings, formerly the Catalog of Federal Domestic Assistance, as required by the Uniform Administrative
Guidance of Title 2 Section 200 of the Code of Federal Regulations. Changes in the categorization of expenditures occur
E-29
based upon revisions to the assistance listing. The Schedule reflects assistance listing changes issued through June 2021.
Federal programs that do not have an assigned number are denoted with the three-digit suffix .999. The numerical
identification of the State agency responsible for administering each federal program is also noted on the accompanying
schedule. See Appendix A in section H of this report for the legend of State agency identification numbers.
The COVID 19 pandemic resulted in significant federal awards with the express intention of assisting states in responding to
and recovering from the public health and economic impacts of the pandemic. Federal awards received specifically as a result
of the COVID 19 pandemic are separately denoted in the schedule.
NOTE 2 - INDIRECT COST RECOVERY
The following New Hampshire state agencies have elected to utilize the 10% de minimis cost rate as allowed per 2 CFR
200.414:
• The Governor’s Office of Emergency Relief and Recovery
• The Developmental Disabilities Council
• The Department of Justice
The remaining agencies and departments of the State have historically negotiated indirect cost recovery rates with their
cognizant federal agencies and do not utilize the 10% de minimus cost rate.
NOTE 3 - NONMONETARY FEDERAL FINANCIAL ASSISTANCE
Pandemic EBT Food Benefits – Expenditures of $6,340,623 reported in the Schedule under ALN 10.542, Pandemic EBT
Food Benefits, represent actual disbursements for client purchases of authorized food products through use of electronic
benefit cards during the year ended June 30, 2021.
Supplemental Nutrition Assistance Program – Expenditures of $163,274,388 reported in the Schedule under ALN 10.551,
Supplemental Nutrition Assistance Program, represent actual disbursements for client purchases of authorized food products
through use of the electronic benefits card program during the year ended June 30, 2021.
Donated Foods – The State distributes federal surplus food to institutions (schools, summer feeding programs, child and adult
care facilities, hospitals and other not for profit charitable institutions) and to the needy. Expenditures are reported in the
Schedule at the federally assigned value of the product distributed under the following U.S. Department of Agriculture federal
programs:
ALN # Federal Program Amount
10.555 National School Lunch Program $ 4,165,802
10.558 Child and Adult Care Food Program 185,116
10.559 Summer Food Service Program for Children 5,544
10.565 Commodity Supplemental Food Program 1,070,535
10.569 Emergency Food Assistance Program (Food Commodities) 4,372,613
Total: $9,799,610
Donated Federal Surplus Personal Property – The State obtains surplus property from various federal agencies at no cost.
The property is sold by the State to eligible organizations for a nominal service charge. Total federal expenditures of $7,100
reported for ALN 39.003, Donation of Federal Surplus Personal Property, represent the value of the property determined
by the federal government to be federal financial assistance.
E-30
Vaccines – The State receives various childhood vaccines from the federal Centers for Disease Control and Prevention.
The vaccines are distributed to children through free clinics, local hospitals, and doctors' offices. Expenditures of
$11,234,449 included on the Schedule for ALN 93.268 Immunization Cooperative Agreements, represent the federal value
assigned to the vaccines distributed.
NOTE 4 - UNEMPLOYMENT INSURANCE
The New Hampshire Department of Employment Security administers the Unemployment Insurance Program (ALN
17.225). The reported expenditures comprise the following:
COVID-19
Unemployment
Unemployment Totals
Insurance
Service
State UC Benefits $ 63,514,925 $ - $ 63,514,925
Administrative Grants $ 27,316,304 $ 9,524,201 $ 36,840,505
Federal Employees $ 666,756 $ - $ 666,756
Ex-Servicemen $ 558,077 $ - $ 558,077
EUC08 $ (202,996) $ - $ (202,996)
FAC $ (38,402) $ - $ (38,402)
Trade Act $ 56,120 $ - $ 56,120
Extended Benefits $ - $ 1,517,614 $ 1,517,614
ATAA $ 28,389 $ - $ 28,389
Federal Pandemic Unemployment Compensation (FPUC) $ - $ 452,133,890 $ 452,133,890
Pandemic Unemployment Assistance (PUA) $ - $ 314,114,257 $ 314,114,257
Pandemic Emergency Unemployment Compensation (PEUC) $ - $ 90,532,237 $ 90,532,237
Mixed Earners Unemployment Compensation (MEUC) $ - $ 92,650 $ 92,650
Temp Comp Account for Waiting Week $ - $ 9,903,045 $ 9,903,045
Short-Time Compensation (Federally Funded) $ - $ 3,353,204 $ 3,353,204
US Emergency Relief Account for Reimb. Employer 50% $ - $ 8,166,614 $ 8,166,614
Total $ 91,899,173 $ 889,337,712 $ 981,236,885
NOTE 5 - STATE ELECTION FUND – HELP AMERICA VOTE ACT (HAVA)
The State of New Hampshire received $5,000,000 from the United States General Services Administration in fiscal year
2003, in July 2004 an additional $11,596,803, in November of 2011 an additional $1,425,000, in March of 2018 an
additional $3,102,253 and in April of 2020 an additional $6,741,788 as part of the Help America Vote Act of 2002. The
State received $14,540 of funding in fiscal year 2021. The purpose of the funds is to establish minimum election
administration standards for states and local governments with the responsibility for the administration of Federal elections.
For these programs (ALN # 39.011, 90.401, and 90.404) as of June 30, 2021, the State had expended a cumulative total of
$18,517,416 of $27,880,384 Election Reform payments received, leaving a remaining balance of $9,362,968.
The State of New Hampshire Office of the Secretary of State (Office) has taken a position of agreement with the National
Association of Secretaries of State Resolution relative to the distinction between payments and grants. Accordingly, the
E-31
Office believes that the Election Assistance Commission (“EAC”) does not have the statutory authority to apply rules
outside HAVA when performing its section 902(b) function in auditing States. In as much as the Office has reported these
payments in this report, it is the Office’s position that such reporting may not be required under the Single Audit Act, and
this reporting is in no way meant to alter the position taken by the Secretary of State with respect to the character or status
of these funds, or the authority of the EAC.
NOTE 6 – AIRPORT IMPROVEMENT PROGRAM (ALN #20.106)
The State of New Hampshire’s schedule does not include funds related to the Federal Aviation Administration’s Airport
Improvement Program (AIP) for grants sponsored by the cities of Manchester and Lebanon and the Pease Development
Authority (except for block grants). The AIP funds included in the schedule represent those grants sponsored by the State.
NOTE 7 – 97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) AND 21.019
– CORONAVIRUS RELIEF FUNDS:
Expenditures of $11,012,640 reported as amounts passed through to subrecipients for Public Assistance Disaster Grants
for fiscal year 2021 represent reimbursements to local entities for disasters that have approved project worksheets and
expenditures incurred for fiscal years 2021 and prior.
Expenditures of $50,832,895 of Public Assistance Disaster Grant funds for fiscal year 2021 represent reimbursements
of costs incurred by the State for disasters that have approved project worksheets and expenditures incurred for fiscal
year 2020.
Of these costs, $36,500,000 were previously reported as Coronavirus Relief Funds reported under ALN 21.019 in the
State’s 2020 Schedule of Expenditures of Federal Awards. The remainder was supported with general or other state
funds.
Coronavirus Relief Fund expenditures reported of $742,996,301 do not include the reversing effect of $36,500,000
originally charged to the Coronavirus Relief Fund in fiscal year 2020, subsequently transferred to the Public Assistance
Disaster Grant program in fiscal year 2021.
Expenditures of $30,307 of Public Assistance Disaster Grant funds for fiscal year 2021 represent reimbursements of
costs incurred by the State for disasters that have approved project worksheets and expenditures incurred for fiscal year
2018.
Expenditures of $46,535,353 for Public Assistance Disaster Grants for fiscal year 2021 represent reimbursement of
costs incurred by the State for disasters that have approved project worksheets and expenditures incurred for fiscal year
2021.
E-32
NOTE 8 - CLUSTERED PROGRAMS
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards codified at 2
CFR 200 defines a “cluster” as “a grouping of closely related programs that share common compliance requirements.”
The table below details the federal programs included in the Schedule that are required to be “clustered” for purposes
of testing federal compliance requirements and identifying Type A programs.
ALN Program Title Expenditures
Supplemental Nutrition Assistance Program (SNAP) Cluster
10.551 Supplemental Nutrition Assistance Program (SNAP) 163,274,388
10.561 State Administrative Matching Grants for the Supplemental 10,059,202
Nutrition Assistance Program
SNAP Cluster Total $ 173,333,590
Child Nutrition Cluster
10.553 School Breakfast Program (SBP) 9,504,369
10.555 National School Lunch Program (NSLP) 30,039,006
10.556 Special Milk Program for Children (SMP) 7,886
10.559 Summer Food Service Program for Children (SFSPC) 3,427,990
10.579 Child Nutrition Discretionary Grants Limited Availability 42,089
Child Nutrition Cluster Total $ 43,021,340
Food Distribution Cluster
10.565 Commodity Supplemental Food Program 1.289,210
10.568 Emergency Food Assistance Program (Administrative Costs) 793,982
10.569 Emergency Food Assistance Program (Food Commodities) 4,372,613
Food Distribution Cluster Total $ 6,455,805
Forest Service Schools and Roads Cluster
10.665 Schools and Roads–Grants to States 384,220
10.666 Schools and Roads–Grants to Counties -
Forest Service Schools and Roads Cluster Total $ 384,220
Fish and Wildlife Cluster
15.605 Sport Fish Restoration Program 3,141,047
15.611 Wildlife Restoration and Basic Hunter Education 3,455,212
15.626 Enhanced Hunter Education and Safety Program 71,163
Fish and Wildlife Cluster Total $ 6,667,422
E-33
NOTE 8 - CLUSTERED PROGRAMS (CONTINUED)
Employment Service Cluster
17.207 Employment Service/Wagner – Peyser Funded Activities 1,257,348
17.801 Jobs for Veterans State Grants 137,732
17.804 Local Veterans' Employment Representative (LVER) Program -
Employment Service Cluster Total $ 1,395,080
Workforce Investment Opportunity Act (WIOA) Cluster
17.258 WIOA Adult Program 1,333,298
17.259 WIOA Youth Activities 1,886,215
17.278 WIOA Dislocated Worker Formula Grants 838,981
WIOA Cluster Total $ 4,058,494
Highway Planning and Construction Cluster
20.205 Highway Planning and Construction 167,833,203
20.219 Recreational Trails Program 1,243,560
20.224 Federal Lands Access Program 1,066,682
23.003 Appalachian Development Highway System -
Highway Planning and Construction Total $ 170,143,445
FMCSA Cluster
20.218 Motor Carrier Safety Assistance Program 1,223,559
20.237 High Priority Grant Program 22,238
FMCSA Cluster Total $ 1,245,797
Federal Transit Cluster
20.500 Federal Transit - Capital Investment Grants -
20.507 Federal Transit – Formula Grants 6,490,852
20.525 State of Good Repair Grants Program -
20.526 Bus and Bus Facilities Formula Program 1,494,337
Federal Transit Cluster Total $ 7,985,189
Transit Services Programs Cluster
20.513 Enhanced Mobility of Seniors and Individuals With Disabilities 2,174,650
20.516 Job Access – Reverse Commute -
20.521 New Freedom Program -
Transit Services Programs Cluster Total $ 2,174,650
E-34
NOTE 8 - CLUSTERED PROGRAMS (CONTINUED)
Highway Safety Cluster
20.600 State and Community Highway Safety 1,219,460
20.601 Alcohol Impaired Driving Countermeasures Incentive Grants -
20.602 Occupant Protection Incentive Grants -
20.609 Safety Belt Performance Grants -
20.610 State Traffic Safety Information System Improvement Grants -
20.611 Incentive Grant Program to Prohibit Racial Profiling -
20.612 Incentive Grant Program to Increase Motorcyclist Safety -
20.613 Child Safety and Child Booster Seat Incentive Grants -
20.616 National Priority Safety Programs 2,114,676
Highway Safety Cluster Total $ 3,334,136
Clean Water State Revolving Fund Cluster
66.458 Capitalization Grants for Clean Water State Revolving Funds 12,407,385
66.482 Disaster Relief Appropriations Act (DRAA) Hurricane Sandy -
Capitalization Grants for Clean Water State Revolving Funds
Clean Water State Revolving Fund Cluster Total $ 12,407,385
Drinking Water State Revolving Fund Cluster
66.468 Capitalization Grants for Drinking Water State Revolving Funds 9,875,741
66.483 Disaster Relief Appropriations Act (DRAA) Hurricane Sandy -
Capitalization Grants for Drinking Water State Revolving Funds
Drinking Water State Revolving Fund Cluster Total $ 9,875,741
Special Education Cluster
84.027 Special Education-Grants to States 51,006,590
84.173 Special Education-Preschool Grants 1,616,076
Special Education Cluster Total $ 52,622,666
Aging Cluster
93.044 Special Programs for the Aging-Title III, Part B-Grants for 1,444,083
Supportive Services
93.045 Special Programs for the Aging-Title III, Part C-Nutrition Services 6,196,697
93.053 Nutrition Services Incentive Program 1,197,180
Aging Cluster Total $ 8,837,960
E-35
NOTE 8 - CLUSTERED PROGRAMS (CONTINUED)
Head Start Cluster
93.356 Head Start Disaster Recovery from Hurricanes Harvey, Irma, and -
Maria
93.600 Head Start 131,340
Head Start Cluster Total $ 131,340
Child Care and Development Fund (CCDF) Cluster
93.489 Child Care Disaster Relief -
93.575 Child Care and Development Block Grant 25,325,315
93.596 Child Care Mandatory and Matching Funds of the Child Care and 10,159,844
Development Fund
CCDF Cluster Total $ 35,485,159
Medicaid Cluster
93.775 State Medicaid Fraud Control Units 517,055
93.777 State Survey and Certification of Health Care Providers and 1,471,229
Suppliers (Title XVIII) Medicare
93.778 Medical Assistance Program 1,586,444,182
Medicaid Cluster Total $ 1,588,432,466
Disability Insurance/SSI Cluster
96.001 Social Security--Disability Insurance (DI) 6,803,147
96.006 Supplemental Security Income (SSI) -
Disability Insurance/SSI Cluster Total $ 6,803,147
E-36
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
- Part I - Summary of Auditors’ Results
Financial Statements
Type of auditors’ report issued on whether financial statements were prepared in
accordance with U.S. GAAP:
Unmodified
Internal control over financial reporting:
• Material weakness identified? yes X no
• Significant deficiency identified that is not considered to be a material
weakness? X yes no
Noncompliance material to financial statements noted? yes X no
Federal Awards:
Internal control over major programs:
• Material weaknesses identified? X yes no
• Significant deficiencies identified that are not considered to be material
weaknesses? X yes no
Type of auditors’ report issued on compliance for major programs:
SNAP Cluster (10.551, 10.561) – Qualified
Unemployment Insurance (17.225) - Qualified
Coronavirus Relief Fund (21.019) – Qualified
Emergency Rental Assistance Program (21.023) - Qualified
Education Stabilization Fund (84.425) - Qualified
Epidemiology and Laboratory Capacity for Infectious Diseases (93.323) - Qualified
Temporary Assistance for Needy Families (93.558) – Qualified
Low Income Home Energy Assistance (93.568) - Qualified
Medicaid Cluster – (93.775, 93.777, 93.778) - Qualified
All Other Major Programs – Unmodified
Any audit findings disclosed that are required to be reported in accordance with 2
CFR 200.516(a). X yes no
F-1
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Identification of Major Programs
ASSISTANCE LISTING NAME OF FEDERAL PROGRAM OR CLUSTER
SNAP Cluster
10.551 Supplemental Nutrition Assistance Program
10.561 State Administrative Matching Grants for the Supplemental
Nutrition Assistance Program
Child Nutrition Cluster
10.553 School Breakfast Program
10.555 National School Lunch Program
10.556 Special Milk Program for Children
10.559 Summer Food Service Program for Children
10.579 Child Nutrition Discretionary Grants Limited Availability
CCDF Cluster Child Care Disaster Relief
93.489 Child Care and Development Block Grant
93.575 Child Care Mandatory and Matching Funds of the Child Care
93.596 Development Fund
Medicaid Cluster State Medicaid Fraud Control Unit
93.775
93.777 State Survey and Certification of Health Care Providers
and Suppliers (Title XVIII) Medicare
93.778 Medical Assistance Program
Other Programs
10.557 Special Supplemental Nutrition Program for Women,
Infants and Children
17.225 Unemployment Insurance
21.019 COVID-19 Coronavirus Relief Fund
21.023 Emergency Rental Assistance Program
84.010 Title I Grants to Local Educational Agencies
84.126 Rehabilitation Services – Vocational Rehabilitation Grants to
States
84.425 Education Stabilization Fund
93.268 Immunization Cooperative Agreements
93.323 Epidemiology and Laboratory Capacity for Infectious
Diseases
93.558 Temporary Assistance for Needy Families
93.568 Low Income Home Energy Assistance
93.658 Foster Care Title IV-E
93.788 State Targeted Response to the Opioid Crisis
97.050 Presidential Declared Disaster Assistance to Individuals and
Households – Other Needs
F-2
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Dollar threshold used to distinguish between
Type A and Type B Programs: $13,839,623
Auditee qualified as low-risk auditee: yes X no
F-3
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Part II - Financial Statement Findings
All Findings and questioned costs related to State’s basic financial statements are required to be reported in
accordance with Government Auditing Standards are presented beginning on page F-5.
Part III – Schedule of Current Year Findings and Questioned Costs – Federal Awards
All findings and questioned costs related to Federal assistance programs are presented beginning on page F- 7.
F-4
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Part II – Findings Relating to the Financial Statements in Accordance with Government Auditing Standards
2021-001 Department of Administrative Services (DAS) and Department of Revenue
Administration (DRA)
Credit Carryovers
Background
At the time a tax return is filed, a credit carryover obligation (CCO) represents the amount of overpaid
Business Profit Taxes (BPT) and/or Business Enterprise Taxes (BET), a taxpaying entity elects to apply to
future tax obligations rather than request a refund. Based on tax returns filed through June 30, 2021, the State
estimated a gross CCO balance of approximately $243.1 million.
Observation
Based on a prior year recommendation from KPMG, the Department of Revenue Administration (DRA)
amended its policy for calculating credit carryovers. The amended policy analyzes historical trends to identify
the amount of CCO that will be applied towards a taxpaying entity’s current fiscal tax obligation, the remainder
representing a tax refund liability.
Of the $243.1 million gross credit carryovers, DRA estimates $179 million will be applied towards fiscal
2021 tax obligations, leaving the State with a liability due to taxpayers of $64.1 million as of June 30, 2021.
For comparative purposes, the prior liabilities were $66.4 million and $85.0 million for fiscal years ending
June 30, 2020 and 2019, respectively.
The State, however, does not record a CCO tax refund liability in its annual financial statements.
Recommendation
We recommend the State record an estimated tax refund payable at year-end based on DRA’s analysis.
Additionally, we recommend consideration be given to expanding the credit carryover analysis to include the
impact on both the General Fund and the Education Trust Fund as BPT and BET taxes are reported in both of
those funds.
Management Response
The State has a long-standing policy which allows taxpayers to leave overpayments “on balance” with the
Department of Revenue Administration (DRA), and extensive past history has shown that taxpayers do not
generally request these funds to be refunded, but typically utilize credit carryovers to satisfy future quarterly
estimate payments.
DRA performs an analysis utilizing certain assumptions based on taxpayer reported data as of fiscal year-end,
as well as subsequent taxpayer filing patterns based on a multi-year historical analysis. The result of this
analysis is viewed by the State as a potential liability for credit carryovers, however, the State continues to
believe that much of this remaining liability remains “on balance” at the taxpayer’s choice. There is a low
probability this balance would be utilized or paid out; thus, it does not meet the criteria for recording as a
liability in the General Fund or Education Trust Fund, under the State’s current accounting policy.
F-5
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
However, given that the size of this potential liability, discussions with legislative policy makers have
resulted in legislative changes to manage the growth over time. The FY22-23 budget trailer bill (HB2)
established a commission to study limiting the Business Tax Credit Carry Over, as well as instituted a
future “cap” on the credit carryover liability as follows: amending the BPT and the BET to limit the
amount of any overpayment that a taxpayer may claim as a credit to 500% of the total tax liability for
the taxable period (periods ending on or after December 31, 2022); 250% of the total tax liability for
the taxable period (periods ending on or after December 31, 2025); and 100% of the total tax liability
for the taxable period (periods ending on or after December 31, 2027), with the remainder of any
overpayment refunded to the taxpayer.
DAS will also continue to work with DRA to evaluate if sufficient data can be obtained in order to
determine the amount of credit carryover liability that would be attributable, separately, to the General
Fund and Education Trust Fund.
.
F-6
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Part III – Findings and Questioned Costs Relating to Federal Awards
Finding Reference Number: 2021-002
Department of Health and Human Services
SNAP Cluster (Assistance Listing #10.551 and #10.561)
Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519
Federal Award Year: 2020, 2021
U.S. Department of Agriculture
Compliance Requirement: Reporting – Schedule of Expenditures of Federal Awards
Type of Finding: Significant Deficiency
Prior Year Finding: None
Statistically Valid Sample: No
Criteria
Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements,
Cost Principles, and Audit Requirements, section 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.
While not required, the auditee may choose to provide information requested by Federal awarding
agencies and pass-through entities to make the schedule easier to use.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over the Schedule of Expenditures of Federal Awards (SEFA), we noted that the
New Hampshire Department of Health and Human Services (the Department) incorrectly reported
$4,714,418 in Pandemic EBT Benefits (Assistance Listing #10.542) as benefits paid under the
Supplemental Nutrition Assistance Program (Assistance Listing #10.551) resulting in expenditures
incurred under the Supplemental Nutrition Assistance Program to be overstated on the SEFA. The error
was subsequently identified and corrected as a result of the audit process.
Cause
The cause of the condition found is that the Department believed that the funds under the Pandemic EBT
program were not available to be paid as such to eligible clients for the month of June 2021 and as such,
reported them as benefits paid under the Supplemental Nutrition Assistance Program.
Effect
The effect of the condition found is that the Schedule of Expenditures of Federal Awards was not
accurately prepared.
F-7
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing policies and procedures for preparing the
Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate.
View of Responsible Officials
The Department concurs. SEFA procedures will be reviewed and strengthened to ensure adequate
controls are in place.
Anticipated Completion Date: September 30, 2022
Contact Person
Mary Calise, Deputy Chief Financial Officer, Department of Health and Human Services
F-8
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-003
NH Department of Health and Human Services
SNAP Cluster (Assistance Listing #10.551 and #10.561)
Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519
Federal Award Year: 2020, 2021
U.S. Department of Agriculture
Compliance Requirement: Special Tests and Provisions: ADP System for SNAP
Type of Finding: Significant Deficiency and Material Noncompliance
Prior Year Finding: None
Statistically Valid Sample: No
Criteria
State agencies are required to automate their SNAP operations and computerize their systems for
obtaining, maintaining, utilizing, and transmitting information concerning SNAP (7 CFR sections 272.10
and 277.18). This includes: (1) processing and storing all case file information necessary for eligibility
determination and benefit calculation, identifying specific elements that affect eligibility, and notifying
the certification unit of cases requiring notices of case disposition, adverse action and mass change, and
expiration; (2) providing an automatic cutoff of participation for households that have not been recertified
at the end of their certification period by reapplying and being determined eligible for a new period (7
CFR sections 272.10(b)(1)(iii) and 273.10(f) and (g)); and (3) generating data necessary to meet federal
issuance and reconciliation reporting requirements. Non-federal entities must establish and maintain
effective internal control over federal awards that provide 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.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide 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.
Criteria
The New Hampshire Department of Health and Human Services (the Department) administers the SNAP
program and is responsible for determining eligibility for the SNAP program in accordance with federal
regulations and New Hampshire policies and procedures.
During our testwork over the ADP system used for storing all case file information necessary for
eligibility determination and benefit calculations (the New Heights system), we noted the following:
A. For 12 of 40 participants selected for testwork, the Department was unable to provide support to
verify that the participants social security income had been matched, via a Bendex match, with
the Social Security Administration (SSA) because the SSA has not provided New Hampshire
authorization to share that information. Therefore, validation that the participants were deemed
F-9
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
eligible by the SSA was not able to be reviewed and we were unable to determine if the
participant’s benefit calculation was performed accurately.
B. For 1 of 40 participants selected for testwork, the incorrect earned income amount was used in
support of the eligibility and benefit calculation process. While the amount of earned income was
inaccurate, it did not result in an inaccurate eligibility determination or an error in the benefit
amount paid.
Cause
The cause of the condition is that (1) the SSA has not issued a Redisclosure Memorandum for the CMS
Single Audit. Without the Memorandum, states do not have permission to disclose SSA data to any auditors
and (2) insufficient control procedures to ensure accurate data is entered into the New Heights system to
support the participant’s eligibility determination and benefit calculation.
Effect
The effect of the condition found is that the Department could be providing SNAP benefits to participants
who may be ineligible for the program, or the amount paid may be inaccurate.
Questioned Costs
Not determinable.
Recommendation
The Department should obtain approval from SSA to share data with the single auditor or work with SSA
to provide correspondence to the single auditor confirming eligibility for individuals during the audit
process. In addition, the existing internal controls should be reviewed to ensure that there are appropriate
controls in place to review the accuracy of the data entered into the New Heights system to support the
eligibility determination and benefit calculation process.
View of Responsible Officials
Finding A: We concur. We have submitted a Data Exchange Coordinator request to SSA that was signed
by the Commissioner.
Finding B: We concur. The case was reviewed and the caseworker made an error in not including the
missing pay. It did not result in an error to the benefit payment. There was no over or under payment.
The pays in the e-folder support the income amount of $1,846.01. We have informed the caseworker of
this error in order to prevent this from re-occurring.
Anticipated Completion Date: Complete
Contact Person
Debra Sorli, Administrator IV, Department of Health and Human Services
F-10
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-004
NH Department of Health and Human Services
SNAP Cluster (Assistance Listing #10.551 and #10.561)
Federal Award Numbers 202020S51444, 204NH403S514, 214NH403S2514, 214NH403S2519
Federal Award Year: 2020, 2021
U.S. Department of Agriculture
Compliance Requirement: Special Tests and Provisions: EBT Card Security
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: None
Statistically Valid Sample: No
Criteria
The state is required to maintain adequate security over, and documentation/records for, EBT cards, to
prevent their theft, embezzlement, loss, damage, destruction, unauthorized transfer, negotiation, or use (7
CFR section 274.8(b)(3)).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
The New Hampshire Department of Health and Human Services (the Department) contracts with a third
party to process all daily EBT transactions associated with the SNAP program. On a daily basis, the
Department transmits data to the third-party service provider that contains information concerning
participants that need a new EBT card issued. The service provider generates the EBT cards based on this
request and express mails the cards to the Department. The Department reviews the listing of EBT cards
that were delivered to ensure there are no missing cards and then subsequently mails the cards to the
individual participant.
During our testwork over the daily reconciliation performed over EBT cards issued, we were unable to
obtain documented evidence that the Department had performed a daily reconciliation to ensure that only
authorized EBT cards were issued.
Cause
The cause of the condition found is that the Department only maintains support for the daily reconciliation
process for a 6-month period. After 6 months the data is destroyed.
Effect
The effect of the condition found is that EBT cards could be issued that were not properly authorized.
F-11
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department review its existing policies and procedures to ensure that
documentation to support the activities to properly secure EBT cards is appropriately documented and
maintained.
View of Responsible Officials
We concur. The Department will save and scan the inventory sheets that are accompanied with the daily
EBT card delivery. The inventory sheets will be saved in a folder with the daily date as the title and
saved in the correct monthly folder. Those monthly folders will then be kept in a yearly folder.
Anticipated Completion Date: May 3, 2022
Contact Person
Frank Beck, EBT Administrator, Department of Health and Human Services
F-12
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-005
NH Department of Education
Child Nutrition Cluster (Assistance Listing #10.553, #10.555, #10.556, #10.559, and #10.579)
Federal Award Numbers: 214NH304N1099
Federal Award Year: 2020, 2021
U.S. Department of Agriculture
Compliance Requirement: Allowable Costs
Type of Finding: Significant Deficiency
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Reimbursement for meals served is not based on costs; it is determined solely by applying the applicable
meals times rates formula. For the SFSP, separate rates are used to calculate reimbursement for operating
and administrative costs, however a sponsor can use its entire reimbursement payment for any
combination of allowable operating and administrative costs. For the FFVP, eligible elementary schools
may only use the awarded subgrant funds for allowable costs of purchasing, preparing, and serving the
fresh fruits and fresh vegetables during school day; these funds may not be used for the service of school
meals.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over allowable costs charged to the program we noted the accuracy of meal counts are
typically reviewed during the Department Administrative Reviews, as required by the United States
Department of Agriculture (USDA). However, the New Hampshire Department of Education (the
Department) received a waiver from the (USDA) to perform Administrative Technical Assistance Meeting
(ATAM) reviews in place of the required Administrative Reviews. The waiver was granted with the
understanding the Department would review all participating school food authorities (SFA). During our
testwork over ATAM reviews we noted the Department did not perform a review for 2 of 7 Summer Food
Service Programs SFAs selected for testwork.
Cause
The cause of the condition found is due to staffing turnover within the Department and inadequate procedures
in place to ensure all reviews are competed.
F-13
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Effect
The effect of the condition found is a breakdown in the Departments internal control related to the ATAM
reviews. Additionally, SFAs may submit inaccurate meal counts which the Department would not know as
the reviews were not performed.
Questioned Costs
Not determinable.
Recommendation
We recommend the Department review its policies and procedures related to review requirements to
ensure they are sufficient to meet federal requirements.
View of Responsible Officials
The NHDOE concurs with this finding. Due to staff turnover during FY21, these two ATAM reviews fell
through the cracks and therefore were not completed. The NHDOE plans to develop a procedure to ensure
no other reviews are missed in the future. Food and Nutrition staff will also incorporate a process within
this procedure that ensures nothing is missed when/if staff turnover arises again.
Anticipated Completion Date: June 1, 2022
Contact Person
Lindsey Labonville, Administrator III, Department of Education
F-14
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-006
NH Department of Education
Child Nutrition Cluster (Assistance Listing #10.553, #10.555, #10.556, #10.559, and #10.579)
Federal Award Numbers: 214NH304N1099
Federal Award Year: 2020, 2021
U.S. Department of Agriculture
Compliance Requirement: Special Tests and Provisions: Accountability for USDA-Donated Foods
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Maintenance of Records - Distributing and subdistributing agencies (as defined at 7 CFR section 250.3)
must maintain accurate and complete records with respect to the receipt, distribution, and inventory of
USDA-donated foods, including end products processed from donated foods. Failure to maintain records
required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or
loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the
food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During the year ended June 30, 2021, the New Hampshire Department of Administrative Services (the
Department) reported expenditures related to USDA foods which totaled $4,171,346. During our testwork
over accountability for USDA-Donated Foods, we noted the following related to the Departments
maintenance of records:
• For 1 of 13 food receipts selected for testwork, the quantity of foods received as reported on the
Departments receipt report, which agrees to the Schedule of Expenditures of Federal Awards
(SEFA), was greater than the quantity of foods received. The quantity entered into the system after
delivery was the correct quantity of foods actually received into the warehouse. As such, the dollar
value of foods received was overstated on the SEFA.
• For 5 of the 13 food items selected for testwork, we performed a rollforward of the balance on hand
using the donated food records provided by the Department. Based on this rollfoward, the balance
varied from the current balance observed per the inventory count. The Department was unable to
provide documentation to support these variances.
• For 1 of 40 distributions selected for testwork, the distributions per the distribution report was
greater than the distributions actually received by the school. The distribution records maintained
F-15
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
by the Department included an original cancelled delivery and its true subsequent delivery without
a reversal of the cancelled delivery. The warehouse did not overcharge the school as it issued a
credit memo after the initial delivery’s invoice and only charged for the item after it had been
delivered.
Cause
The cause of the condition found is due to the breakdown of internal controls in place relating to
accountability for USDA-donated foods.
Effect
The effect of the condition found is noncompliance with 7 CFR section 250.16.
Questioned Costs
Overstatement of distributions: $38.
Overstatement of receipts: $365.
Recommendation
We recommend the Department review its policies and procedures for complying with 7 CFR section
250.16 to ensure they are sufficient to meet federal requirements.
View of Responsible Officials
The New Hampshire Department of Administrative Services (NHDAS) concurs with this finding.
NHDAS is working on updating the applicable policies and procedures to enhance our existing internal
controls. Although all inventory variances are able to ultimately be found they are difficult to locate in a
timely fashion. Moving forward, one spreadsheet will be maintained to include each adjustment and
corresponding records information to provide a centralized location for easy access and review. Additional
direction will be added to existing policies to prevent inaccuracies related to foods received, specifically
for damaged cases upon receipt and distributions. During the audit, one cancelled case of strawberry slices
did show up as cancelled on the Recon Report. After troubleshooting within the inventory system, it turned
out to be a location code entry error. An additional step will be added to our reconciliation process to catch
similar errors throughout the year.
Anticipated Completion Date: April 1, 2022
Contact Person
Lindsey Labonville, Administrator III, Department of Education
Kathleen Daley, Surplus Food Distribution Manager, Department of Administrative Services
F-16
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-007
NH Department of Health and Human Services
Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing
#10.557)
Federal Award Numbers: 202120W100344 & 202121W100344
Federal Award Year: 2021
U.S. Department of Agriculture
Compliance Requirement: Period of Performance
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A non-federal entity may charge only allowable costs incurred during the approved budget period of a
federal award’s period of performance and any costs incurred before the federal awarding agency or pass-
through entity made the federal award that were authorized by the federal awarding agency or pass-
through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain
one or more budget periods.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over period of performance at the New Hampshire Department of Health and Human
Services (the Department), we noted for 1 of 48 expenditures selected for testing, the Department had
charged the expense to the new federal fiscal year grant, however, the date of service on the invoice was
partially for a period prior to the start of that federal award.
Cause
The cause of the condition found is due to how the Department charges costs to federal grants.
Effect
The effect of the condition found is that the Department did not comply with the period of performance
regulations.
Questioned Costs
$30.35 – the amount of the September portion of the invoice
F-17
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Recommendation
We recommend that the Department implement internal control and policies and procedures to ensure
costs are appropriately charged to federal awards based on the incurred date.
View of Responsible Officials
The Division concurs with this finding. This was a staff error due to oversight at the time of month-end
reconciliation. Moving forward, as we close out one grant year and begin a new one, staff will be trained
to pay closer attention to the rare invoices that overlap months so that we can prorate the expenses
appropriately.
Anticipated Completion Date: November 2022
Contact Person
Shelley Swanson, DPHS Finance Director, Department of Health and Human Services
F-18
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-008
NH Department of Health and Human Services
Special Supplemental Nutrition Program for Women, Infants, and Children (Assistance Listing
#10.557)
Federal Award Numbers: 202019W100344, 202019W100644, 202020W100344, 202020W100644,
202121W700344, 202120W600644, 202120W600344, 202120W100344, 202120W100644,
202121W100344, 202121W100644, 202121W500344
Federal Award Year: 2019, 2020, 2021
U.S. Department of Agriculture
Compliance Requirement: Reporting – Schedule of Expenditures of Federal Awards
Type of Finding: Significant Deficiency
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements,
Cost Principles, and Audit Requirements, section 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.
While not required, the auditee may choose to provide information requested by Federal awarding
agencies and pass-through entities to make the schedule easier to use.
Additionally, 2 CFR 200.303states the non-Federal entity must establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award.
Condition
The New Hampshire Department of Health and Human Services (the Department) did not have adequate
annual management review controls in place at a level of precision necessary to ensure proper
classification of the amount of expenditures passed through to subrecipients on the State of New
Hampshire Schedule of Expenditures of Federal Awards (SEFA).
For the WIC Program, the Department did not classify amounts passed through to subrecipients on the
draft SEFA. Specifically, the Department had $2,646,624 in pass-through expenditures which were not
properly classified as passed-through expenditures on the draft SEFA. The error was subsequently
identified and corrected as a result of the audit process.
Cause
The cause of the condition found was primarily due to insufficient controls and procedures to ensure that
pass-through amounts reported on the SEFA are complete and accurate.
F-19
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.510(b).
Questioned Costs
None.
Recommendation
We recommend the Department enhance its process including its management review control to ensure
the proper classification of subrecipient expenditures for SEFA reporting purposes to ensure compliance
with 2 CFR 200.510(b).
View of Responsible Officials
The Department concurs. The Department has requested of the Department of Administrative Services
that a sub-recipient contract class be created in the State’s accounting system to be able to better monitor
and report on pass through amounts to sub-recipients for the SFY 24-25 budget cycle. In the interim staff
have been told to review their existing contracts to ensure that sub-recipient pass through expenditures for
SFY 22 are reported correctly. SEFA procedures will be reviewed and strengthened to ensure adequate
controls are in place.
Anticipated Completion Date: Upon approval of DAS adding a separate sub-recipient contract class in
the State’s accounting system.
Contact Person
Mary Calise, Deputy Chief Financial Officer, Department of Health and Human Services
F-20
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-009
NH Department of Employment Security
Unemployment Insurance (Assistance Listing #17.225)
Federal Award Numbers: Not Applicable
Federal Award Year: Not Applicable
U.S. Department of Labor
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
The ETA 9050, First Payment; ETA 9052, Nonmonetary Determination Time Lapse Detection; and ETA
9055, Appeals Case Aging reports are required to be filed on a monthly basis.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over the federal reporting process, we noted the following:
A. There does not appear to be a documented review over the accuracy of the ETA 9050, ETA 9052
and ETA 9055 federal reports that was performed prior to submission of the reports to the U.S.
Department of Labor.
B. For each of the 3 monthly ETA 9052 reports selected for testwork, we were unable to obtain
documentation to support that the reports submitted were complete and accurate.
Cause
The cause of the condition found was primarily due to the New Hampshire Department of Employment
Security (the Department) not having sufficient controls in place to document the review and approval of
the accuracy of the federal reports prior to submission. In addition, as it relates to the ETA 9052 reports,
the Department was unable to reproduce the data using the current production system within the New
Hampshire Unemployment Insurance System (NHUIS) which is the system that processes and stores all
unemployment related information as it relates to the ETA 9052 reports. The original data that was
generated to prepare the reports was not maintained by the Department.
Effect
The effect of the condition found is that the Department does not have documentation to substantiate that
the reports filed were accurate or that the reports were reviewed prior to submission.
F-21
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing internal controls, policies, and procedures to
ensure that documentation to support the data contained on all federal reports is properly maintained and
that all reports required to be submitted are subjected to a documented review prior to submission.
View of Responsible Officials
The first condition noted (A.) regarding a lack of a documented review of the accuracy the reports was
due to the fact that emails informing staff that the reports were ready for submission were not sent during
the review period. While the sending of these emails is a helpful notification, all reports are reviewed
prior to submission to the DOL. The person responsible for uploading these reports to the Sun System
is the same person responsible for the review of these reports. The temporary suspension of these emails,
while not intentional, had no effect on the established report review process. Email notifications of these
reports’ readiness has resumed and will continue.
The second condition (B.), In 2018, NHES completed a rewrite of its Federal timeliness reporting. This
new functionality allowed for New Hampshire to not only view historical information but also allowed
for current progress in meeting timeliness. These reports, both historical and current, allow for a drill
down to the claimant level to help the Department identify impediments to meeting timeliness. This new
reporting was written as a new and separate component from our old reporting with the old reports
continuing to run in the background. With the addition of all of the new Federal programs, code
contention was discovered which created a display issue within our system, the system was combining
information from its old reports with the new reports creating discrepancies in the display. This issue
has been corrected. This was found to be just a display issue within NHUIS, our benefit payment system,
and had no effect on the actual reporting to the Department of Labor.
Anticipated Completion Date: This issue has been resolved
Contact Person
Michael Burke, Administrator IV, Department of Employment Security
F-22
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-010
NH Department of Employment Security
Unemployment Insurance (Assistance Listing #17.225)
Federal Award Numbers: Not Applicable
Federal Award Year: Not Applicable
U.S. Department of Labor
Compliance Requirement: Special Tests and Provisions: UI Program Integrity - Overpayments
Type of Finding: Material Weakness and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
States are (1) required to impose a monetary penalty (not less than 15 percent) on claimants whose
fraudulent acts resulted in overpayments, and (2) states are prohibited from providing relief from charges
to an employer’s UI account when overpayments are the result of the employer’s failure to respond timely
or adequately to a request for information.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over overpayments, for 1 of 40 items selected for testwork, we noted that a cause
associated with the identified overpayment had not been identified or documented by the New Hampshire
Department of Employment Security (the Department). Upon further review of the item, we noted that
$500 in earnings were mistakenly entered into the system causing an overpayment to be identified for the
claimant. The error resulted in an incorrect identification of an overpayment.
Cause
The cause of the condition found was due to a staff error that was not identified by the Department due to
insufficient review controls in place to review the calculation of the overpayment.
Effect
The effect of the condition found is that the Department erroneously identified an overpayment and could
have incorrectly sought to recoup benefits paid from the claimant.
Questioned Costs
None.
F-23
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Recommendation
We recommend that the Department review its existing internal controls, policies and procedures related
to the identification and subsequent review of overpayments to ensure that overpayments are properly
identified and tracked.
View of Responsible Officials
We are taking a two pronged approach to the resolution of this issue. First, we will be identifying all
those claimants who have an overpayment with the source unidentified, currently shown in our system as
“other” or “none recorded,” and will manually review for correct source codes. Secondly, we will be
coding our system such that an eligibility issue cannot be resolved in an overpayment is created and a
source of the overpayment is not identified. In other words, no decision will be rendered, and no
determination will issue until the issue is correctly resolved.
Anticipated Completion Date: December 31, 2022
Contact Person
Michael Burke, Administrator IV, Department of Employment Security
F-24
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-011
NH Governor’s Office of Emergency Relief and Recovery
Coronavirus Relieve Fund (Assistance Listing #21.019)
Federal Award Number: Not Applicable
Federal Award Year: 2020
U.S. Department of Treasury
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: None
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.332(a);
2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b));
3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required
through the terms and conditions of the award, subaward monitoring must include 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 other means; and
4. Issuing a management decision for audit findings pertaining to federal award provided to the
subrecipient from the subrecipient as required by 2 CFR section 200.521.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
Under the Coronavirus Relief Fund Program (CRF), the State of New Hampshire (the State) entered into
various grant agreements with third parties to provide program services under the CRF program. As part
of our testwork over the subrecipient monitoring process, we noted the following:
A. The State communicates award information to the subrecipient through the approved grant
agreement. During our testwork over the communication of award information, we noted
F-25
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
instances where the State did not communicate all the required award information as outlined in 2
CFR section 200.331. Specifically, we noted the following:
a. The subrecipient’s unique identifier was not included in 1 of 28 grant agreements
selected for testwork.
b. The indirect cost rate for the federal award, including if the de minimis rate is charged,
was not included in 1 of 28 grant agreements selected for testwork.
c. The federal award identification number, federal award date, federal award project
description, assistance listing number and name and name of federal awarding agency
was not included in 1 of 28 grant agreements selected for testwork.
d. Identification of whether the award is R&D was not included in all 28 grant agreements
selected for testwork.
B. For 7 of 28 subrecipients selected for testwork, there was no evidence provided that a risk
assessment had been performed for the subrecipient.
C. For 1 of 28 subrecipients selected for testwork, we noted that the State’s during the award
monitoring was primarily composed of periodic meetings. The State provided calendar dates of
meetings held, but there were no minutes, notes or agenda items provided for the meetings and as
such we were unable to substantiate the items discussed during the meeting to ensure it related to
monitoring of the grant.
D. For 3 of 28 subrecipients selected for testwork, no evidence was provided of any during the
award monitoring activities performed, with the exception of the review of the invoice to be paid
to the subrecipient.
E. For 12 of 28 subrecipients selected for testwork, we noted that while the State was able to provide
the subrecipients annual Uniform Guidance report, it was unclear as to whether or not the State
had received the report on time as there was no formal tracking sheet or other documentation
provided to support the tracking of the receipt of the reports. We further note that in all instances,
the subrecipient’s report did not require the State to issue a management decision letter as there
were no findings included within the individual reports.
F. For 1 of 28 subrecipients selected for testwork, we noted that the State had performed a
compliance monitoring review over the subrecipient. Per review of the report, funds provided
under the Coronavirus Relief Fund were not included within the scope of the work performed.
As a result, there did not appear to be any during the award monitoring performed over the
subrecipient, with the exception of the review of the invoice to be paid to the subrecipient.
Cause
The cause of the condition found was primarily due to insufficient controls at the Department level to ensure
compliance with subrecipient monitoring requirements due to the decentralized nature of how subrecipient
grants were entered into by multiple Departments.
Effect
The effect of the condition found is that the State did not comply with 2 CFR section 200.331(a), 2 CFR
section 300.331(b), and 2 CFR sections 200.331(d) through (f).
F-26
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the State continue to review its existing policies and procedures to ensure there are
sufficient controls in place to allow the State to comply with the provisions 2 CFR section 200.331(a), 2
CFR section 300.331(b), and 2 CFR sections 200.331(d) through (f). This would include ensuring that:
1. All required award information is communicated to subrecipients;
2. Document risk assessments are performed over all subrecipients;
3. During the award monitoring activities are properly documented; and
4. Receipt of subrecipient uniform guidance reports are tracked to show that they are received
and reviewed timely.
View of Responsible Officials
The State concurs in part with the findings and concurs with the recommendation.
In regard to Section A of the findings, the State has taken action to include the R & D provision in all
open subawards, and believes that the remaining deficiencies are not correct. In regard to Section B, due
to the unique and emergency nature of the CRF funding the recipients of subawards were sometimes not
traditional partners for recipient of federal funding. GOFERR concurs that the de-centralized nature of
some CRF programs contributed to failure to document risk assessment in a small number of cases. Of
the 7 identified, the State believes that the finding is incorrect as to 4. However, the State has taken action
to address this in all open subawards going forward. In regard to Section C and D of the findings the State
believes that the monitoring was consistent with the scope of the work and adequate. In regard to Section
E of the findings, the State concurs, but notes that for CRF subawards, due to the original end date for
performance, in almost all instances any UG report would not have been received until after the award
had already been closed. However, the State has addressed this going forward by strengthening the
requirement for submission of UG reports in the templates for subawards that will be used for COVID
relief funding subawards going forward and tracking receipt.
Anticipated Completion Date: The corrective actions indicated above have already been implemented
as of the date of this response.
Contact Person
Chase Hagaman, Deputy Director, Executive Office
Steven Giovinelli, Financial Reporting Administrator III, Department of Administrative Services
Rejoinder
As identified in Bullets C and D in the condition found, we were unable to obtain evidence to support that
during the award monitoring had been performed beyond the review and approval of the invoice that was
paid by the State.
F-27
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-012
NH Governor’s Office of Emergency Relief and Recovery
Emergency Rental Assistance Program (Assistance Listing #21.023)
Federal Award Numbers ERA0012-ERA0435
Federal Award Year: 2020
U.S. Department of Treasury
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: None
Statistically Valid Sample: No
Criteria
A pass-through entity must clearly identify to the subrecipient required award information and applicable
requirements described in 2 CFR section 200.332(a).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
Under the Emergency Rental Assistance Program (ERAP), the New Hampshire Governor’s Office of
Emergency Relief and Recovery (the Department) entered into one grant agreement with a third party to
provide program management services whereby the subrecipient would be responsible for the distribution
of ERAP funds, including the eligibility process and determining the amount the applicant was eligible to
receive. As part of our testwork over the subrecipient monitoring process, we noted the following:
A. The Department communicates award information to the subrecipient through the approved grant
agreement. Per review of the grant agreement, the Department did not communicate all the
required award information as outlined in 2 CFR section 200.331. Specifically, the grant award
did not identify if the grant was a research and development grant.
B. Biweekly reports are required to be submitted to the Department that contains information
concerning the number and value of awards that have been provided to recipients and certain
demographic information as it relates to the program recipients. For the 3 biweekly reports
selected for testwork, while it appeared that the Department had collected the required reports
from the subrecipient, there was no evidence provided that the Department reviewed the data
contained within the report.
C. On a periodic basis the subrecipient is required to perform a monitoring review that assesses
compliance with participant eligibility requirements and recalculation of the benefit amount paid.
Upon completion of the review, a report is sent to the Department outlining the results of the
review. During our testwork over subrecipient monitoring we obtained the monitoring report that
F-28
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
was issued that covered monitoring activities through June 30, 2021. While it appeared the
Department had obtained the monitoring report, there was no evidence provided that the
Department reviewed the data contained within the report.
Cause
The cause of the condition found was primarily due the Department not include the required communication
to identify if the grant is a research and development grant and did not appear to have any policies and
procedures to formally document its review and approval of reports submitted from the subrecipient.
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a)
and may not have timely reviewed reports submitted to the Department to ensure that any compliance
matters were followed up and resolved timely.
Questioned Costs
None.
Recommendation
We recommend that the Department continue to review its existing policies and procedures to ensure that
the Department complies with the provisions of 2 CFR section 200.331(a) and to ensure that appropriate
controls are in place to ensure compliance with 2 CFR section 200.331(b). This would include ensuring
that:
1. All required award information is communicated to subrecipients; and
2. Ensuring that all bi-weekly and monitoring reports provided by the subrecipient are timely
reviewed and conclusions reached as a result of the review are formally documented.
View of Responsible Officials
The State concurs in part with the findings and concurs with the recommendation.
In regard to Section A of the findings, the State concurs and has taken action to include the R & D
provision in all open subawards.
In regard to Section B, the State concurs that it should take more proactive steps to document receipt and
review of the biweekly reports in email correspondence, and now does so. However, the State disagrees
with any inference that there has been any failure in monitoring, oversight, or review of the subrecipient
or their reports. In response to the initially drafted finding, the State indicated that it has weekly,
calendared discussions with its subrecipient to discuss provided reports, program updates, action steps,
and even policy updates. Moreover, when these biweekly reports are received, they are cataloged on the
State’s “S: Drive,” used to update its publicly posted program dashboard on the GOFERR website and are
even shared with members of the Governor’s Office for further review and discussion.
The very nature of this program and U.S. Treasury’s facilitation of it has required the State and its
subrecipients to stay in close contact and make regular decisions on strategies and policies within the
program. In fact, the State now requires, in addition to the more detailed biweekly reports, higher-level
weekly reports to monitor fund usage and trends in the program.
F-29
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
In regard to Section C, the State concurs that it should take more proactive steps to document receipt and
review of compliance reports and now does so. However, it reiterates that review and any relevant
discussion of those reports takes place during weekly, calendared discussions with the subrecipient.
Anticipated Completion Date: The corrective actions indicated above have already been implemented.
Contact Person
Chase Hagaman, Deputy Director, Executive Office
Steven Giovinelli, Financial Reporting Administrator III, Department of Administrative Services
Rejoinder
As identified within Bullets B and C in the condition found, we noted that while we were able to obtain
evidence that biweekly reports were submitted by the subrecipient and that a monitoring review had been
conducted by the subrecipient, we were unable to obtain evidence that the Department had reviewed the
reports or the monitoring review.
F-30
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-013
NH Department of Education
Title I Grants to Local Educational Agencies (Title I, Part A of ESEA (Assistance Listing #84.010))
Federal Award Numbers: S010A190029, S010A200029
Federal Award Year: 2020, 2021
U.S. Department of Education
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L.
No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the
“Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or
cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal
Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over FFATA reporting at the New Hampshire Department of Education (the
Department), we noted throughout the year ending June 30, 2021, the Department reported their grants in
the FSRS system however, each time a change was made to an agreement and reported in the system, the
Department reported the new total, rather than just the change in funding, resulting in a significant
overreporting of obligated funds to the FSRS system. As the FSRS system doesn’t allow modifications to
prior reports, the Department has been unable to correct the reporting within the FSRS system. The
Department has been working with the U.S. Department of Education to resolve the errors in the FFATA
reporting. Given the severity of the errors reported in the FSRS system, we were unable to perform audit
work over the FFATA reporting requirements and related internal controls in place at the Department.
Cause
The cause of the condition found is due to a misunderstanding in the FFATA reporting requirements and
the Departments inability to correct previously reported grants without assistance from the FSRS
technical team.
Effect
The effect of the condition found is that the Department did not comply with the Transparency Act.
F-31
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department implement internal control and policies and procedures, across all
Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting
to the FSRS system to ensure compliance with the Transparency Act reporting requirements.
View of Responsible Officials
The NHDOE concurs with this finding and is currently working on how to correct the issue. In fact, once
the error was made and detected, it could have been fixed within the audit period if: The GSA was
responsive to the DOE’s documented repeated requests to delete the incorrect reports. Since the GSA did
not remove the reports in a timely manner, the DOE could not enter the correct uploads”. As of 2/1/22
all erroneous reports have been removed by GSA and NH DOE will refile the reports in the correct format
Anticipated Completion Date: June 1, 2022
Contact Person
Lindsey Labonville, Administrator III, Department of Education
F-32
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-014
NH Department of Education
Title I Grants to Local Educational Agencies (Title I, Part A of ESEA) (Assistance Listing #84.010)
Federal Award Numbers: S010A190029, S010A200029
Federal Award Year: 2020, 2021
U.S. Department of Education
Compliance Requirement: Special Tests and Provisions – Assessment System Security
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
State Educational Agencies (SEAs), in consultation with Local Educational Agencies (LEAs), are
required to establish and maintain an assessment system that is valid, reliable, and consistent with
relevant professional and technical standards. Within their assessment system, SEAs must have policies
and procedures to maintain test security and ensure that LEAs implement those policies and procedures
(Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii))).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over the Department’s on-site monitoring process, we noted for 1 of 7 LEA’s
selected for testwork, the LEA did not submit all of the required documentation to the Department,
however, the Department closed their review and noted all required documentation was submitted.
Cause
The cause of the condition found was primarily due to an oversight at the Department.
Effect
The effect of the condition found is that the Department may not be in compliance with Title I, Section
1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii)).
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department review its existing policies and procedures over assessment security
requirements and revise procedures and internal controls to ensure that reviews over LEAs are performed
each year and appropriate documentation is maintained.
F-33
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
View of Responsible Officials
The NHDOE concurs with this finding. A procedure will be put in place to ensure all documents are
obtained and reviewed. This is the first time the Department actually had assessment monitoring happen
and the NHDOE is working to improve the process. The NHDOE will seek out support to improve this
process by Caveon as they are currently helping to refine the process.
Anticipated Completion Date: June 1, 2022
Contact Person
Lindsey Labonville, Administrator III, Department of Education
F-34
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-015
NH Department of Education
Education Stabilization Fund (Assistance Listing #84.425)
Federal Award Numbers: S425R210041, S425D200017, S425D210017, S425C200032, S425C210032
Federal Award Year: 2020, 2021
U.S. Department of Education
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L.
No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the
“Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or
cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal
Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over FFATA reporting at the New Hampshire Department of Education (the
Department), we noted throughout the year ending June 30, 2021, the Department reported their grants in
the FSRS system however, each time a change was made to an agreement and reported in the system, the
Department reported the new total, rather than just the change in funding, resulting in a significant
overreporting of obligated funds to the FSRS system. As the FSRS system doesn’t allow modifications to
prior reports, the Department has been unable to correct the reporting within the FSRS system. The
Department has been working with the U.S. Department of Education to resolve the errors in the FFATA
reporting. Given the severity of the errors reported in the FSRS system, we were unable to perform audit
work over the FFATA reporting requirements and related internal controls in place at the Department.
Cause
The cause of the condition found is due to a misunderstanding in the FFATA reporting requirements and
the Departments inability to correct previously reported grants without assistance from the FSRS
technical team.
Effect
The effect of the condition found is that the Department did not comply with the Transparency Act.
F-35
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department implement internal control and policies and procedures across all
Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting
to the FSRS system to ensure compliance with the Transparency Act reporting requirements.
View of Responsible Officials
The NHDOE concurs with this finding and is currently working on how to correct the issue. In fact, once
the error was made and detected, it could have been fixed within the audit period if: The GSA was
responsive to the DOE’s documented repeated requests to delete the incorrect reports. Since the GSA did
not remove the reports in a timely manner, the DOE could not enter the correct uploads”. As of 2/1/22
all erroneous reports have been removed by GSA and NH DOE will refile the reports in the correct format
Anticipated Completion Date
June 1, 2022
Contact Person
Lindsey Labonville, Administrator III, Department of Education
F-36
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-016
NH Department of Education
Education Stabilization Fund (Assistance Listing #84.425)
Federal Award Numbers: S425R210041, S425D200017, S425D210017, S425C200032, S425C210032
Federal Award Year: 2020, 2021
U.S. Department of Education
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Direct recipients of GEER, ESSER I and ESSER II grants must submit an annual report.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over federal reporting at the New Hampshire Department of Education (the
Department), we noted while the Department was able to show the annual GEER and ESSER reports
were filed by the required deadline, the Department was unable to provide evidence to support the reports
had followed the Departments internal control procedures, including a review and approval of the report
prior to submission.
Cause
The cause of the condition found is due to a lack of proper processes and internal controls in place
surrounding the submittal of GEER and ESSER reports.
Effect
The effect of the condition found is that the Department did not comply with the federal reporting
requirements.
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing policies and procedures to ensure timely and
accurate federal reporting to ensure compliance with the federal reporting requirements.
F-37
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
View of Responsible Officials
The NHDOE concurs with this finding. NHDOE will develop a proper process that comments to the
review and approval process of annual GEER and ESSER reporting. This process will also mention where
the files will be saved for later auditing use.
Anticipated Completion Date: June 1, 2022
Contact Person
Lindsey Labonville, Administrator III, Department of Education
F-38
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-017
NH Department of Education
Education Stabilization Fund (Assistance Listing #84.425)
Federal Award Numbers: S425R210041, S425D200017, S425D210017, S425C200032, S425C210032
Federal Award Year: 2020, 2021
U.S. Department of Education
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b))
2. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.332(d) through (e). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required
through the terms and conditions of the award, subaward monitoring must include 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 other means.
For programs under ESSER I and GEER I (Assistance Listing 84.425C and D), an LEA that receives
funds under one or both of those programs must provide equitable services in the same manner as
provided under section 1117 of Title I, Part A of the ESEA (20 USC 6320) (Assistance Listing 84.010) to
students and teachers in private schools as determined in consultation with private school officials
(section 18005(a) of the CARES Act). To meet this requirement, an LEA must determine the proportional
share of ESSER I or GEER I funds available for equitable services in accordance with section
1117(a)(4)(A) of the ESEA (20 USC 6320(a)(4)(A)). Under ESSER I and GEER I, the LEA in which a
private school is located is responsible for providing equitable services to students and teachers in the
school. With respect to the provision of services, in general all students and teachers in a private school
are eligible to receive equitable services under ESSER I and GEER I.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide 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.
F-39
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Condition
The New Hampshire Department of Education (the Department) has a formal on-site programmatic
monitoring policy that includes both a risk assessment process and procedures to monitor compliance at
the LEA level in order to ensure that the LEA as complied with federal requirements concerning the use
of Education Stabilization Fund funds. As part of the programmatic on-site monitoring process
implemented by the New Hampshire Department of Education (the Department) over LEA’s, the
Department was to review and ensure that LEAs that receives funds under the program provided equitable
services in the same manner as provided under section 1117 of Title I, Part A of the ESEA. During our
testwork over subrecipient monitoring, we noted that the Department did not perform any programmatic
risk assessments or monitoring during the year ended June 30, 2021. As a result, the Department did not
perform any procedures to ensure LEA compliance with programmatic requirements. We further noted
the requirements related to participation of private school children were not monitored.
Cause
The cause of the condition found was due to the inability of the Department to perform reviews due to the
lack of staff and COVID-19.
Effect
The effect of the condition found is that the Department did not sufficiently monitor the LEA’s compliance
with federal regulations applicable to Education Stabilization Fund in accordance with 2 CFR section
200.332(b) and 2 CFR sections 200.332(d) through (e) and the Department did not sufficiently monitor
the LEA’s compliance related to private school participation.
Questioned Costs
None.
Recommendation
We recommend that the Department continue to review its existing policies and procedures over the
monitoring of subrecipients in order to ensure that appropriate procedures to comply with 2 CFR section
300.332(b) and 2 CFR sections 200.332(d) through (e) are consistently performed on an annual basis.
Additionally, the Department should review its existing policies and procedures over the monitoring of
private school participation to ensure that specific monitoring procedures are developed and implemented
to appropriately monitor the federal requirement at the LEA.
View of Responsible Officials
The NHDOE conquers with this finding. NHDOE subsequently has hired a new employee to oversee the
risk assessment and program monitoring for all ESSER funds. FY22 ESSER program subrecipients will
be monitored based on the risk assessment results. Additionally, because of COVID 19 staffing was
seriously curtailed. As of January 1, 2022, a new program specialist IV was hired to develop and
implement monitoring protocols such as equitable services during the monitoring process.
Anticipated Completion Date: Completed.
Contact Person
Lindsey Labonville, Administrator III, Department of Education
F-40
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-018
NH Department of Health and Human Services
Immunization Cooperative Agreements (Assistance Listing #93.268)
Federal Award Numbers:
Federal Award Year:
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provision – Control, Accountability and Safeguarding
of Vaccine
Type of Finding: Significant Deficiency
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Effective control and accountability must be maintained for all vaccine under the Vaccine For Children
(VFC) program (42 USC 1396s).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
As part of the vaccine ordering process, all enrolled providers are required to submit an electronic request
for vaccines by vaccine type and quantity to the New Hampshire Department of Health and Human
Services (the Department). Included with the order request is a vaccine reconciliation form that provides
detailed information by vaccine concerning the beginning of period vaccine quantity included in
inventory, doses administered, ending vaccine balance and number of doses requested for the current
order. This information is reviewed by the Department, and if reasonable, the order request is approved.
As part of our testwork over the approval process for provider vaccine orders, we noted that for 30 of the
40 orders selected for testwork, we were unable to verify that the vaccine order was reviewed and
approved by the Department.
Cause
The cause of the condition found was due to a new vaccine system being implemented as of April 1, 2021.
Once the new system went live, all prior vaccine orders approved in the previous system were no longer
accessible.
Effect
The effect of the condition found is that the Department is unable to demonstrate that provider vaccine
orders prior to April 1, 2021 were reviewed in accordance with the Department’s policies and procedures.
F-41
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing policies and procedures to ensure that
documentation is maintained to support the review and approval of all vaccine order requests by the
provider to help ensure accountability of all approved and distributed vaccines.
View of Responsible Officials
The department does not concur with the finding.
Due to the June 2021 expiration of the maintenance contract for the prior vaccine management system,
the program was not allowed to access the prior vaccine management system to demonstrate the
procedures for reviewing and approving orders for the purposes of this audit.
In an effort to maintain a record of order transactions from the prior system, NHIP staff extracted a report
for all transactions performed within the prior system from January 1, 2020 to May 31, 2021. This report
which notated staff approval of orders from July 1, 2020 to March 31, 2021 was provided to the auditors
for the audit period 7/1/20-6/30/21 to serve as documented evidence for the sample requested to by the
auditors. Note: approvals in the prior system were only allowable following review of order. Hence, the
report did not notate “reviewed” as one could not proceed to approval without first performing a review.
During the virtual audit meeting and because of the vaccine management system’s removal, access
rendered the Department’s staff capability of performing test work inoperable. NHIP’s policy of the
vaccine ordering procedure was not determined to be a finding for the period of time (April 1, 2021 –
June 30, 2021), the program does not feel that a revision of existing policies and procedures are warranted
except to include a note to indicate that when “vaccine monitoring systems are inactivated a copy of
transaction report shall be retained to serve as evidence of NHIP review and approval”.
Anticipated Completion Date: N/A, None Required
Contact Person
Anne Marie Mercuri- Program Section Chief, Lena Boulanger- Vaccine Accountability Coordinator,
Department of Health and Human Services
Rejoinder
While the Department was able to provide the order transaction history from the prior system, we were
unable to determine whether or not the Department had reviewed the vaccine orders prior to the shipment
being sent to the provider as identified within the condition found.
F-42
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-019
NH Department of Health and Human Services
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323)
Federal Award Numbers: NUK50CK000522
Federal Award Year: 2019
U.S. Department of Health and Human Services
Compliance Requirement: Procurement and Suspension and Debarment
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Non-Federal entities are prohibited from contracting with or making subawards under covered
transactions to parties that are suspended or debarred. “Covered transactions” include those procurement
contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative
agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2
CFR section 180.220. All non-procurement transactions entered into by a recipient (i.e., subawards to
subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt
as provided in 2 CFR section 180.215.
When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal
entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is
not suspended or debarred or otherwise excluded from participating in the transaction. This verification
may be accomplished by (1) checking the Excluded Parties List System (EPLS) maintained by the
General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note:
EPLS is no longer a separate system; however, the OMB guidance and agency implementing regulations
still refer to it as EPLS), (2) collecting a certification from the entity, or (3) adding a clause or condition
to the covered transaction with that entity (2 CFR section 180.300).
Additionally, 45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective
internal control over the Federal award that provides reasonable assurance that the non-Federal entity is
managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award.
Condition
During our testwork related to procurement and suspension and debarment, we noted the following:
A. For 5 of 22 agreements selected for testwork, we noted that the New Hampshire Department of Health
and Human Services (the Department) was unable to provide documentation to support it had verified
whether the contractor was suspended or debarred before entering into the covered transaction. Based
on our review of the System for Award Management (SAM) Exclusions website, none of the vendors
selected for testwork were included within the exclusion list indicating that they had been suspended
or debarred.
F-43
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Cause
The cause of the condition found was the result of insufficient controls in place to ensure that Department
suspension debarment policies are followed, and adequate documentation is maintained to support the
process.
Effect
The effect of the condition found is that the Department was not in compliance with 2 CFR section
180.300 and as such, could have entered into an agreement with a vendor that had been suspended or
debarred from receiving federal funds and would not have the necessary controls and procedures to
identify the noncompliance timely.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department continue to review its existing policies, procedures and related
controls to ensure signed suspension and debarment certifications are in place or the excluded parties
listing is reviewed prior to entering into a covered transaction with vendors. The Department should also
consider whether or not procedures should be implemented to independently review the System for
Award Management Exclusions website to confirm if a vendor has been suspended or debarred.
View of Responsible Officials
The Department will review existing internal controls to assess whether they are sufficient to provide
management with reasonable assurance the Department complies with the 2 CFR section 180.300. It is
important to note that between April 2020 and June 2021 the Department was involved in the State’s
strategic response to the COVID-19 pandemic. During this time, New Hampshire was under a state of
emergency (Executive Order 2020-04), processes were rapidly converted to fully digital overnight, the
State’s standard approval processes were suspended, and to respond to the COVID-19 pandemic the
Department worked with other State Departments and the National Guard to create a record number of
amendments, contracts and other agreements (approximately 200% more than standard). The Department
is in the process of instituting a new contract life cycle management solution that will utilize conditional
logic to include the required attestation for agreements involving federal funds in order to ensure
compliance. Phased implementation of the system will begin in the summer and 2022 and is anticipated
to be completed by January 2023.
Anticipated Completion Date: January 2023
Contact Person
Melissa Kelleher, Administrator III, Department of Health and Human Services
F-44
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-020
NH Department of Health and Human Services
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323)
Federal Award Numbers: NUK50CK000522
Federal Award Year: 2019
U.S. Department of Health and Human Services
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L.
No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the
“Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or
cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal
Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
As part of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, the New
Hampshire Department of Health and Human Services (the Department) enters into subrecipient
agreements that meet the requirements for first tier subawards under the Transparency Act and as such
FFATA reports should have been filed for each of those subawards. For 18 of 18 subawards selected for
testwork, the Department did not file the required FFATA reports.
Cause
The cause of the condition found was primarily due insufficient resources and constraints due to COVID-
19.
Effect
The effect of the condition found is that the Department did not comply with the provisions of the
Transparency Act.
Questioned Costs
None.
F-45
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Recommendation
We recommend that the Department review its existing internal controls, policies and procedures to
ensure that all required FFATA reports are filed and filed timely for all subrecipient grant agreements
that meet the definition of a first-tier subaward.
View of Responsible Officials
The Department concurs that some of the SFY 2021 FFATA reports were not completed in compliance
with the Act as noted. During the pandemic, the existing FFATA guidelines were followed as to the timely
reporting on the FSRS Federal Website. However, due to the COVID-19 pandemic and the subsequent
related state of emergency (Executive Order 2020-04) processing of the normal “G&C Minutes” now
included approved items placed in the “Informational Items” section of the “G&C Minutes” a review of
which, is not included in the current FFATA documentation.
Corrective Action
The Department has modified its FFATA Guidelines to include a review of all sections of the “G&C
Minutes” for Federal Awards equal to or greater than $30,000 to identify candidates for FFATA in a
manner consistent with the Act.
Anticipated Completion Date: Corrected - guidelines have modified and will be used
Contact Person
P.J. Nadeau, Administrator III, Department of Health and Human Services
F-46
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-021
NH Department of Health and Human Services
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323)
Federal Award Numbers: NUK50CK000522
Federal Award Year: 2019
U.S. Department of Health and Human Services
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity (PTE) must:
1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the
award as a subaward at the time of subaward (or subsequent subaward modification) by providing
the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the
PTE on the subrecipient so that the federal award is used in accordance with federal statutes,
regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any
additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its
own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR
section 200.332(a)(3)).
2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining
the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)).
3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is
used for authorized purposes, complies with the terms and conditions of the subaward, and
achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required by
the terms and conditions of the award, subaward monitoring must include the following:
a. Reviewing financial and programmatic (performance and special reports) required by the
PTE.
b. 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 PTE
detected through audits, on-site reviews, and other means.
c. Issuing a management decision for audit findings pertaining to the federal award
provided to the subrecipient from the PTE as required by 2 CFR section 200.521.
4. Ensure Accountability of For-Profit Subrecipients – Some federal awards may be passed through
to for-profit entities. For-profit subrecipients are accountable to the PTE for the use of the federal
funds provided. Because 2 CFR Part 200 does not make Subpart F applicable to for-profit
F-47
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
subrecipients, the PTE is responsible for establishing requirements, as necessary, to ensure
compliance by for-profit subrecipients for the subaward. The agreement with the for-profit
subrecipient must describe applicable compliance requirements and the for-profit subrecipient's
compliance responsibility. Methods to ensure compliance for federal awards made to for-profit
subrecipients may include pre-award audits, monitoring during the agreement, and post-award
audits (2 CFR section 200.501(h)).
Additionally, CFR 75 303(a) states the non-Federal entity must establish and maintain effective
internal control over the Federal award that provides reasonable assurance that the non-Federal entity
is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award.
Condition
During the year ended June 30, 2021 the New Hampshire Department of Health and Human Services (the
Department) passed through $17,946,121 of federal funding to subrecipients, both for-profit and non-
profit. As part of our testing related subrecipient monitoring, we noted the following:
A. The Department communicates award information to subrecipients through the approved agreement.
Per review of the agreement, for 18 of 18 subrecipients selected for testwork, the Department did not
communicate all the required award information as outlined in 2 CFR section 200.332(a).
Specifically, the following elements were not communicated:
- Subrecipient unique entity identifier;
- Federal award date;
- Name of the federal awarding agency, pass-through entity, and contact information for the
awarding official of the pass-through entity;
- Identification of whether the award is R&D; and
- Indirect cost rate for the federal award
B. For 2 of 11 subrecipients selected for testwork the Department did not perform a review of the
Uniform Guidance (UG) report timely. The reports were accepted by the Federal Audit Clearing
House in September 2021 and February 2021 and were not reviewed by the Department until May
2022.
C. For 14 of 18 subrecipients selected for testwork, the Department was unable to provide
documentation to support it had evaluated the subrecipient’s risk of noncompliance for purposes of
determining the appropriate subrecipient monitoring related to the subaward.
D. The Department did not perform any during the award monitoring over the programs subrecipients.
E. The Department passed through $5,042,500 in federal funding to for-profit subrecipients. These
subrecipients are not subject to 2 CFR 200 Subpart F and as such, no review over the uniform
guidance audit report is performed by the Department. The Department was unable to provide
documentation to support it had performed procedures to ensure compliance with the subrecipient
agreement in accordance with 2 CFR Section 200.501(h).
F-48
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Cause
The cause of the condition found was primarily due to insufficient controls and procedures to ensure that
all required subrecipient monitoring procedures are being performed by the Department.
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a -
h) and 2 CFR section 200.501(h).
Questioned Costs
None.
Recommendation
We recommend the Department continue to review its existing policies and procedures to ensure that the
Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h).
View of Responsible Officials
Finding A: The Department concurs as we used non-standard templates in collaboration with other State
Departments to award funding to subrecipients, in an effort to quickly distribute funds due to the COVID-
19 pandemic. These templates did not include subrecipients DUNS numbers, indirect cost rates, if any,
nor reference to whether the award was R&D, and was a departure from our normal templates that
incorporate this information. This departure from standard templates and process was in direct response
to the dire situation created by the COVID-19 pandemic.
The Department communicated the best information available to describe the Federal Award and
subaward, in lieu of the Federal Award Date and the name of the Federal Awarding Agency, as allowed
under 2 CFR 200.332 (a). The funding, at that time, was provided by the State of New Hampshire
Governor’s Office for Emergency Relief and Recovery (GOFERR), as indicated in the grant agreements
and cover letters.
Finding B: The Department concurs with the finding
Finding C: The Department concurs. Due to the expediency of need in the community due to the
COVID-19 pandemic, the Department did not evaluate the risk of non-compliance by these sub-
recipients, a departure from the Department’s Sub-recipient Monitoring Policy, which is outlined in the
Department’s Exigent Circumstance Policy.
Finding D: The Department concurs no subrecipient monitoring was performed for these contracts, which
were for testing for the COVID-19 pandemic.
Finding E: The Department concurs.
The Department will review its Sub-recipient Monitoring Policy and assess compliance across the
Department. It is important to note that between April 2020 and June 2021 the Department was involved
in the State’s strategic response to the COVID-19 pandemic. During this time, New Hampshire was
under a state of emergency (Executive Order 2020-04), processes were rapidly converted to fully digital
overnight, the State’s standard approval processes were suspended, and to respond to the COVID-19
pandemic the Department worked with other State Departments and the National Guard to create a record
number of amendments, contracts, and other agreements (approximately 200% more than standard). The
Department is in the process of instituting a new contract life cycle management solution that will utilize
F-49
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
conditional logic to include the required attestation for agreements involving federal funds in order to
ensure compliance. Phased implementation of the system will begin in the summer of 2022 and is
anticipated to be completed by January 2023.
The Financial Compliance Unit (FCU) will continue to work with the Business System Analyst of the
Cost Allocation Unit in determining the amount of Federal payments made to the vendors. The FCU
receives a vendor payment list on a quarterly basis that includes the total amount of Federal funds that
were paid to all contracted agencies. We will continue to closely monitor the FAC to obtain all copies of
the Single Audits pertaining to the DHHS agencies. In addition, we will devise a spreadsheet that will list
all contracts that have been awarded Federal funds and cross check these agencies to vendor payment list.
The DHHS policy on risk assessment was updated on November 16, 2020 to ensure that all contracts have
a risk assessment performed regardless of funding source. We also have added verbiage in the contracts
effective for contracts that begin after November 2021. It states any Contractor that receives an amount
equal to or greater than $250,000 from the Department during a single fiscal year, regardless of the funding
source, may be required, at a minimum, to submit annual financial audits performed by an independent
CPA if the Department’s risk assessment determination indicates the Contractor is high-risk. Finally,
effective for any new procurement subsequent to March 2022, all back-up documentation must accompany
the invoices and be submitted on a monthly basis.
Anticipated Completion Date: January 2023
Contact Person
Melissa Kelleher, Grants Administrator, Department of Health and Human Services
Ann Driscoll, Administrator of the Financial Compliance Unit, Department of Health and Human
Services
F-50
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-022
NH Department of Health and Human Services
Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (Assistance Listing #93.323)
Federal Award Numbers: NUK50CK000522
Federal Award Year: 2019
U.S. Department of Health and Human Services
Compliance Requirement: Reporting – Schedule of Expenditures of Federal Awards
Type of Finding: Significant Deficiency
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements,
Cost Principles, and Audit Requirements, section 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.
While not required, the auditee may choose to provide information requested by Federal awarding
agencies and pass-through entities to make the schedule easier to use.
Additionally, CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award.
Condition
The New Hampshire Department of Health and Human Services (the Department) did not have adequate
annual management review controls in place at a level of precision necessary to ensure proper
classification of the amount of expenditures passed through to subrecipients on the State of New
Hampshire Schedule of Expenditures of Federal Awards (SEFA).
For the ELC Program, the Department did not classify amounts receives as passed through to
subrecipients on the draft SEFA. Specifically, the Department had $17,946,121 in pass-through
expenditures which were not properly classified as passed-through expenditures on the draft SEFA.
Cause
The cause of the condition found was primarily due to insufficient controls and procedures to ensure that
pass-through amounts reported on the SEFA are complete and accurate.
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.510(b).
F-51
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend the Department enhance its process including its management review control to ensure
the proper classification of subrecipient expenditures for SEFA reporting purposes to ensure compliance
with 2 CFR 200.510(b).
View of Responsible Officials
The Department concurs. The Department has requested of the Department of Administrative Services
that a sub-recipient contract class be created in the State’s accounting system to be able to better monitor
and report on pass through amounts to sub-recipients for the SFY 24-25 budget cycle. In the interim staff
have been told to review their existing contracts to ensure that sub-recipient pass through expenditures for
SFY 22 are reported correctly. SEFA procedures will be reviewed and strengthened to ensure adequate
controls are in place.
Anticipated Completion Date: Upon approval of DAS adding a separate sub-recipient contract class in
the State’s accounting system.
Contact Person
Mary Calise, Deputy Chief Financial Officer, Department of Health and Human Services
F-52
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-023
NH Department of Health and Human Services
Temporary Assistance for Needy Families (Assistance Listing #93.558)
Federal Award Numbers: 2020G996115, 2021G996115
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions: Child Support Non-Cooperation
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: 2020-012
Statistically Valid Sample: No
Criteria
If the State agency responsible for administering the State plan under Title IV-D of the Social Security
Act determines that an individual is not cooperating with the State in establishing paternity, or in
establishing, modifying or enforcing a support order with respect to a child of the individual, and reports
that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an
amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the
family of the individual and (20 may deny the family any TANF assistance. Health and Human Services
(HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this
required State child support program (45 CFR sections 264.30 and 264.31)
Additionally, CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award.
Condition
During our testwork related to child support non-cooperation, we noted the following:
A. For 1 of 7 participants selected for testwork, a letter of non-cooperation was not maintained in the
participants folder. Per review of the documentation in the file, we noted that there was
correspondence maintained to indicate that the participant was not cooperating as of December 28,
2020, however the required letter of non-cooperation could not be located. As there was no record of
a non-cooperation letter being received, the participant was not sanctioned. As a result, the
participant’s benefits may have been overpaid. The amount of the overpayment was $543.
B. For 1 of 7 participants selected for testwork, the participant’s file contained a cooperation letter dated
in September 2021 indicating that the participant began cooperating as of February 24, 2021, and the
letter itself was not sent timely to the TANF agency to notify them of the change in cooperation
status. Despite not having received the proper communication, we noted that the case manager had
lifted the sanction as of April 15, 2021. The delay resulted in the participant’s benefits being
underpaid until the sanction was lifted. The amount of the benefit underpayment was $412.
F-53
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Cause
The cause of the condition found was the result of insufficient controls in place to ensure that the
participant’s cooperation status is being communicated and communicated timely.
Effect
The effect of the condition found is that participant benefit payments were not accurately paid and could
result in unallowable costs charged to the federal program.
Questioned Costs
$131 - the net difference between bullet A and B above.
Recommendation
We recommend that the Department continue to enhance its existing controls and procedures to ensure the
documentation used to support the beginning and termination of sanction periods is maintained and timely
communicated so that those dates are accurately reflected within the New Heights System, ensuring that
the participant’s benefit payment is accurate.
View of Responsible Officials
We concur with finding A and B, we will continue to use our quality assistance pull to monitor the
findings throughout the year, and work with Bureau of Family Assistance and Bureau of Child Support
Services to be consistent with both departments on the best practices based on our findings to make sure
we continue to ensure the participant’s benefits are accurate.
Anticipated Completion Date Completed.
Contact Person
Karyl Provost, Administrator III, Department of Health and Human Services
F-54
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-024
NH Department of Health and Human Services
Temporary Assistance for Needy Families (Assistance Listing #93.558)
Federal Award Numbers: 2020G996115, 2021G996115
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Matching, Level of Effort and Earmarking – Maintenance of Effort
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2020-016
Statistically Valid Sample: No
Criteria
Every fiscal year, a State must maintain an amount of “qualified state expenditures” (as defined in 42
US609(a)(7)(B) and 45 CFR section 263.2) for eligible families (as defined in 42 USC
609(a)(7)(B)(i)(IV) and 45 CFR section 263.2(b)) at least at the applicable percentage of the State’s
historic State expenditures. Qualified expenditures with respect to eligible families may come from all
programs. This requirement may be met through allowable state or local cash expenditures for goods and
services, cash donations by non-governmental third parties, or the value of third-party in-kind
contributions. A State’s records must show that all costs are verifiable and meet all applicable
requirements in 45 CFR sections 263.2 through 263.6.45.
Additionally, CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal
control over the Federal award that provides reasonable assurance that the non-Federal entity is managing
the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award.
Condition
For the federal fiscal year end September 30, 2020, the New Hampshire Department of Health and
Human Services (the Department) was required to meet an annual maintenance of effort (MOE)
requirement of $43,042,138. Of the MOE expenditures incurred, $9,359,555 represented in-kind
contributions from 15 community organizations. On an annual basis, each community organization
completes a Temporary Assistance for Needy Families (TANF) MOE form to report expenses that qualify
as TANF expenditures. The form requires a description of the program operations, what TANF purpose
the program addresses, the number of families served, and the amount of eligible expenditures in total.
The form is signed by the organization and submitted to the Department to serve as the supporting
documentation for the in-kind contribution provided by the community organization. No additional
documentation is provided by the community organization to support the amount of the expenditures
included on the form. The Department does not perform procedures to ensure expenditures reported by
the community organization are accurate and represent valid expenditures that were incurred to support
the program outlined within the form and in turn to ensure the in-kind contribution used to support the
required MOE is appropriate.
F-55
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Cause
The cause of the condition found was a result of insufficient controls and procedures to ensure the
expenditures reported by the community organizations are properly supported by valid expenditures that
meet the criteria of qualified TANF expenditures. As the Department enters into a memorandum of
understanding (MOU) with each community organization that outlines the types of costs that are
allowable sources of MOE and obtains a signed certification from each organization as to the amount of
expenditures incurred, the Department indicated that the support provided is sufficient and therefore does
not validate the information for accuracy.
Effect
The effect of the condition found is that the Department may not meet the required annual MOE
requirement as in-kind contributions may not be complete or represent qualified expenditures and does
not have controls and procedures in place to identify noncompliance timely.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department implement controls and procedures to ensure that in-kind
contributions used to support MOE are reviewed to ensure that the expenditures are accurate and meet the
definition of qualifying expenditures.
View of Responsible Officials
We do not concur. The expenditures outlined are considered verifiable costs via the Memorandum of
Understanding (MOU) and the Maintenance of Effort (MOE) forms completed by the third party agency.
As part of the June 30, 2018 audit a similar finding is noted which we also did not concur with as part of
that audit. The department has since been in contact and had meetings with the Federal Administration
for Children and Families (ACF). In addition, a formal response was provided to ACF on January 28,
2022. We are currently awaiting the Federal Administration for Children and Families (ACF) decision
concerning this finding and as such, we do not believe any corrective action is required.
Anticipated Completion Date: No corrective action is considered necessary
Contact Person: Mary Calise, Deputy Chief Financial Officer, Depart. of Health and Human Services
Rejoinder
The Department stated in their response that it verifies the completeness and accuracy of the third-party
in-kind match through the MOU entered into and the MOE forms that the providers submit. Per review of
the signed certifications (or the MOE forms), we noted the certification contains a description of the
general purpose of the program, an identification of the TANF purpose the program addresses, the
number of families/individuals served, the expenses incurred under the program, excluding any federal
and state funds received. While we were provided with documentation to support that the third party
certifications were received, we were not provided with evidence to support the Department had
performed additional procedures to verify the incurred costs were complete and accurate as required by
45 CFR section 263.2(e) and 75.306. We do not agree that a certification alone from a third party meets
the definition of a verifiable cost from third -party records.
F-56
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-025
NH Department of Health and Human Services
Temporary Assistance for Needy Families (Assistance Listing #93.558)
Federal Award Numbers: 2020G996115, 2021G996115
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Reporting
Special Tests and Provisions: Penalty for Failure to Comply with Work
Verification Plan
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: 2020-014
Statistically Valid Sample: No
The State agency must maintain adequate documentation, verification, and internal control procedures to
ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in
place procedures to (a) determine whether its work activities may count for participation rate purposes;
(b) determine how to count and verify reported hours of work; (c) identify who is a work eligible
individual; and (d) control internal data transmission and accuracy. Each State agency must comply with
its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the
State by an amount not less than one percent and not more than five percent of the SFAG for violation of
this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64,
and 261.65).
ACF-199, TANF Data Report (OMB No. 0970-0338) and ACF-343, Tribal TANF Data Report (OMB
No. 0970-0215) (65 FR 8545, Appendix A, February 18, 2000) - State agencies must meet or exceed
their minimum annual work participation rates. The minimum work participation rates are 50 percent for
the overall rate and 90 percent for the two-parent rate. A state’s minimum work participation rate may
be reduced by its caseload reduction credit. HHS may penalize the state by an amount of up to 21
percent of the SFAG for violation of this provision (42 USC 609(a)(4); 45 CFR section 262.1(a)(4)).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork related to compliance with the New Hampshire Department of Health and Human
Services (the Department) work verification plan we noted the following:
A. For 1 of 40 participants selected for testwork, the participant did not have an active employment plan
for the period selected for testwork. There was no evidence per review of the case notes maintained
for the participant that the Department had made additional efforts to obtain the required employment
F-57
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
plan. As there was no active employment plan, we were unable to verify if the participant was in
compliance with their required work requirements for the period tested.
B. For 1 of 40 participants selected for testwork, there was insufficient documentation to support the
number of hours worked within the New Heights system for the participant.
Cause
The cause of the condition found was a result of inadequate review controls in place to ensure that
participants have an active employment plan in place, that sufficient documentation is maintained to support
the number of work hours reported by participants, and that the hours worked is accurately reported within
the New Heights system. Inaccurate reporting could impact the accuracy of the data submitted within the
ACF-199 TANF Data Report.
Effect
The effect of the condition found is that the State may not be in compliance with its work verification plan
and would not be able to identify the noncompliance and related reporting errors within the ACF-199
TANF Data report timely.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department enhance its existing controls and procedures to ensure that participant
employment plans are obtained, documentation used to support participant work hours is maintained, that
the hours reported agree to the documented hours worked and that the work hours are accurately reflected
within the New Heights system so that they are ultimately accurately reported on the ACF-199 TANF Data
Report.
View of Responsible Officials
We concur that these cases caused errors.
Additional trainings have been and will continue to be developed based on identified trends and expressed
needs from the Supervisors and/or Employment Counselors.
Additional steps have been added to the audit/monitoring procedures in order to place more emphasis on
the importance of accurate documentation. We have added a yes/no check box on the federal audit tool to
indicate whether or not the audit revealed a federal finding. This was added as a way of bringing
immediate focus to that issue in order to address the issue.
In addition, The Quality Assurance Specialist’s role in working closely with new hires for the first 12
months will assist with reducing errors by new Employment Counselors.
We will be requiring Quality Assurance Specialists to:
• Meet face to face with each new employee 30 days after the completion of training. This meeting
will be to facilitate an introduction, answer questions, provide technical assistance training and
provide support. The QA Specialist will provide the new employee with the 90 day technical
assistance tool that will be utilized at the 90 day mark.
F-58
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
• Conduct a 90 day technical assistance review – the QA Specialist will review a maximum of 10
cases via a desk review and complete a report on those 10 cases. That report will be shared with
the new employee, and any remaining cases (above the 10 that were reviewed prior to the
meeting) will be reviewed together.
• Compile a report using the 90 day QA tools and the findings and provide a report to the FSM so
that the FSM can continue to provide support and assistance to that new hire.
• Continues to be a support to that person through their first year of employment.
The QA Specialists have received training on the tools and (will apply/started applying) this process with
every new hire after [insert date].
Additionally, Field Support Managers are beginning to monitor their staff utilizing the same schedule and
tool one month prior to the regularly scheduled Federal Audit conducted by the QA Manager. This is
being completed in efforts to identify areas of need with each staff member in order to provide them with
individualized support.
Employment Counselor Specialists will begin using an individualized self-monitoring tool in order to
assist them with incorporating individual self-monitoring as part of their regular routine. This tool is
aimed to assist the Employment Counselor Specialists with completing tasks and providing services in a
planned and mindful way thus reducing errors. This tool has been introduced and is being used by xx% of
Employment Counselor Specialists.
In addition, an email will be sent to the staff person involved and their supervisor will review the case in
detail and discuss proper protocol. The supervisor will return verification (signed and dated) as to the
results of the discussion and so the staff person understands and will pay closer attention going forward.
Anticipated Completion Date: September 30, 2022
Contact
Karyl Provost, Administrator III, Department of Health and Human Services
Brigitte Bowmar, Program Specialist IV, Department of Health and Human Services
F-59
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-026
NH Department of Health and Human Services
Temporary Assistance for Needy Families (Assistance Listing #93.558)
Federal Award Numbers: 2020G996115, 2021G996115
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Eligibility
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: None
Statistically Valid Sample: No
The state or tribal plan provides the specifics on the state or tribal area’s definition of financially needy
which the state uses in determining eligibility as outlined in 45 CFR section 260.31(a).
A state may use funds in any manner reasonably calculated to accomplish the purposes of the program,
including providing low-income households with assistance in meeting home heating and cooling costs
(42 USC 604(a)(1) and 45 CFR section 263.11(a)(1)).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork related to the eligibility determination process, we noted the following:
A. For 2 of 40 participants selected for testwork, the signed Statement of Understanding document was
not maintained in the participant’s e-folder. The Statement of Understanding was required to be
signed and received as part of the eligibility determination process as it assists in providing support
for certain requirements that must be met in order to be determined eligible for the program.
B. For 1 of 4 participants selected for testwork, the participant’s redetermination was not completed
within the appropriate timeframe.
C. For 1 of 40 participants selected for testwork, we noted that there were no work activity hours
reported for the month of January and there did not appear to be any sanctions applied to reduce the
participant’s benefits for the lack of work. We were unable to obtain any documentation to support
that the participant was in compliance with their work participation plan to support why their benefits
were not sanctioned.
Cause
The cause of the condition found was a result of insufficient controls to ensure that support needed to
determine eligibility is completely maintained in the participant’s e-folder, to ensure that participants were
F-60
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
redetermined eligible for the program within the appropriate time period or that documentation is
maintained to support if sanctions are required for noncompliance with work related activities.
Effect
The effect of the condition found is that participants may have received benefits that they were not eligible
to receive, resulting in unallowable costs.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department enhance its existing controls and procedures to ensure that
documentation to support eligibility determinations is properly maintained in the participant’s e-file,
including compliance with work related requirements. Exceptions or delays in the redetermination process
should be documented within the participant’s file.
Condition A: We concur with finding A, for both cases. We will work with the Bureau of Family
Assistance to be sure current policy/procedures are being followed for initial applications and
redeterminations in regards to the Statements of Understanding being initialed, signed and in the client’s
e-folder.
Condition B: We concur with finding. During the Covid-19 Pandemic, Redeterminations were being
pushed out to a year however it appears this Redetermination was pushed out further than a year.
Follow-up for Condition A and B: We will be informing all supervisors of the specific errors found
during the audit. We will also require supervisors to include these topics at their next staff meeting. In
addition, individual emails will be sent to the staff involved with the errors and provide guidance.
Condition C: We concur with finding C. The participant was not non-compliant in the January 2021
period was that she was exposed to Covid in December 2020 and was advised to quarantine for 14 days.
She took a leave of absence from school. When she finally submitted her school verifications, they were
received after the end of the ACF month and so were not added.
Follow-up for Condition C:
We will continue to reinforce internal controls and provide additional training and support as previously
indicated.
Anticipated Completion Date: Completed.
Contact
Bethany Redman, TANF Program Specialist IV, Department of Health and Human Services
Kim Runion, Bureau Chief Bureau of Employment Services (BES) , Department of Health and Human
Services
F-61
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-027
NH Department of Energy
Low Income Home Energy Assistance (Assistance Listing #93.568)
Federal Award Numbers: 2001NHLIE4, 2010NHLIE4
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.332(a);
2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.332(b));
3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.332(d) through (f). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required
through the terms and conditions of the award, subaward monitoring must include 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 other means; and
4. Issuing a management decision for audit findings pertaining to federal award provided to the
subrecipient from the subrecipient as required by 2 CFR section 200.521.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
As part of the Low Income Home Energy Assistance program (LIHEAP), the New Hampshire
Department of Energy (the Department) enters into grant agreements with local entities to provide
services related to the eligibility determination process for the LIHEAP program (including the
calculation of participant benefits) and payment of benefits to fuel providers. As part of our testwork over
the subrecipient monitoring process, we noted the following as of the year ending June 30, 2021:
F-62
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
A. The Department communicates award information to subrecipients through the approved grant
agreement. Per review of the grant agreement, for each of the 2 subrecipients selected for
testwork, the Department did not communicate all the required award information as outlined in 2
CFR section 200.332. Specifically, the following elements were not communicated:
a. Federal Award Identification Number (FAIN)
b. Federal award date
c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2
CFR section 200.414)
d. Identification of whether the award is R&D
B. The Department did not perform a risk assessment for each of the 2 subrecipients selected for
testwork. As a result, it was unclear what type of during the award monitoring was required to be
performed for the 2 subrecipients selected for testwork.
C. The Department’s during the award monitoring includes a review of fiscal compliance by the
subrecipient. During our testwork over fiscal monitoring, we noted that for each of the 2
subrecipients selected for testwork, a fiscal monitoring review was not conducted for the LIHEAP
program.
D. The Department’s during the award monitoring includes a review of programmatic compliance of
the subrecipient related to the processing of applications, eligibility determinations and benefit
amounts paid. During our testwork over programmatic monitoring, we noted that for each of the
2 subrecipients selected for testwork, while a programmatic monitoring review was conducted on
March 31, 2021, the report summarizing the results of the review was not issued until September
30, 2021. In addition to the report not being issued timely, we noted that there were findings
included within the report and the report indicated that a corrective action plan was to be
submitted by the subrecipient within 30 days. As of March 2, 2022, the Department had not
followed up and collected the required corrective action plans to ensure that the findings noted
were resolved timely.
E. The Department documents its review over the subrecipient’s annual uniform guidance report
within its fiscal monitoring letter. We noted that while a fiscal monitoring review was not
performed for the LIHEAP program, one was performed for a different program that is managed
by the Department for the same 2 subrecipients selected for testwork. Per review of the fiscal
monitoring reports issued as of August 31, 2021, while the monitoring report contained evidence
that the most recent uniform guidance reports had been reviewed, the date of the letter ranged
from 8 to 10 months after the subrecipient’s uniform guidance report was issued and as such, the
review was not performed timely as required by 2 CFR section 200.521.
Cause
The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-
19 to ensure that timely monitoring and risk assessments were performed over subrecipients. In addition,
there appears to be insufficient controls in place to review the grant agreements to ensure that all required
data elements are communicated to the subrecipient in accordance with 2 CFR section 300.332(b).
F-63
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a),
section 200.332(b) and 2 CFR section 200.521.
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing internal controls, policies, and procedures to
ensure that the Department complies with the provisions of 2 CFR section 200.332(a), 2 CFR section
200.332(b) and 2 CFR section 200.251. This would include ensuring that:
1. All required award information is communicated to subrecipients;
2. A documented risk assessment is performed over all subrecipients and the results of that risk
assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient;
3. As a result of the risk assessment performed, monitoring activities are performed over
subrecipients to ensure compliance with the terms and conditions of its subrecipient grant
agreement. The results of all monitoring reviews should be timely communicated to the
subrecipient and actions requiring corrective action plan should be followed up on to ensure
that the matter is resolved; and
4. Ensure that all uniform guidance reports are collected and reviewed timely so that a
management decision letter can be issued within the time period required by federal
regulations.
View of Responsible Officials
The New Hampshire Department of Energy concurs with the finding as detailed under Condition
Items A – E.
The Agency will review, and make adjustments to, its existing internal controls, policies, and
procedures to ensure that the Department complies with the provisions of 2 CFR sections 200.231(a),
200.331(b) and 200.251.
Anticipated Completion Date: December 30, 2022.
Contact Person
Wendy Gilman, Grants Compliance, Specialist, New Hampshire Department of Energy
F-64
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-028
NH Department of Energy
Low Income Home Energy Assistance (Assistance Listing #93.568)
Federal Award Numbers: 2001NHLIE4, 2010NHLIE4
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L.
No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the
“Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or
cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal
Funding Accountability and Transparency Act Subaward Reporting System (FSRS).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
As part of the Low Income Home Energy Assistance program (LIHEAP), the New Hampshire
Department of Energy (the Department) enters into subrecipient grants that meet the requirements for
first-tier subawards under the Transparency Act and as such FFATA reports were required to be filed for
each of those subawards. During the period ending June 30, 2021, the Department did not file the
required FFATA reports.
Cause
The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-
19.
Effect
The effect of the condition found is that the Department did not comply with the reporting provisions of
the Transparency Act.
Questioned Costs
None.
F-65
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Recommendation
We recommend that the Department review its existing internal controls, policies, and procedures to
ensure that all required FFATA reports are filed and filed timely for all subrecipient grant agreements
that meet the definition of a first-tier subaward.
View of Responsible Officials
The New Hampshire Office of Energy concurs with finding in that during the period ending June 30,
2021, the Department did not file the required FFATA reports.
Corrective Action
The Agency will review, and make adjustments to, its existing internal controls, policies, and procedures
to ensure that the Department complies with the requirements of the Federal Funding Accountability and
Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252,
hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170.
Anticipated Completion Date: December 30, 2022.
Contact Person
Wendy Gilman, Grants Compliance Specialist, New Hampshire Department of Energy
F-66
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-029
NH Department of Energy
Low Income Home Energy Assistance (Assistance Listing #93.568)
Federal Award Numbers: 2001NHLIE4, 2010NHLIE4
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
The LIHEAP Performance Data Form is required to be submitted before March 26, 2021 regarding the
prior fiscal year.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over the federal reporting process, we noted that the annual LIHEAP Performance
Data Form was not submitted timely. The report was due prior to March 25, 2021, but was not filed until
June 14, 2021.
Cause
The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-
19 and insufficient controls to ensure that the federal report was filed timely.
Effect
The effect of the condition found is that the Department did not comply with the reporting deadline for
the LIHEAP Performance Data Form.
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing internal controls, policies, and procedures to
ensure that all federal reports are filed timely.
F-67
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
View of Responsible Officials
The New Hampshire Department of Energy (NHDOE) concurs with the finding. As noted under Cause
above, insufficient personnel was the condition responsible for this Finding. Due to the death of the
LIHEAP Program Manager in early January 2020 and the ensuing Covid-19 hiring freeze restrictions
imposed two months later, the current LIHEAP Program Manager had been solely responsible for all
aspects of the program.
NHDOE has hired an assistant to the LIHEAP Program Manager and procedures will be reviewed and
updated to ensure that all federal reports will be filed in a timely manner.
Anticipated Completion Date: Prior to the start of the 2023 Program Year on October 1, 2022.
Contact Person
Eileen Smiglowski, LIHEAP Program Manager, Department of Energy
F-68
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-030
NH Department of Energy
Low Income Home Energy Assistance (Assistance Listing #93.568)
Federal Award Numbers: 2001NHLIE4, 2010NHLIE4
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Reporting
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) – As part of the application
for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and
income levels of the households assisted for each component and any type of LIHEAP assistance
(heating, cooling, crisis, and weatherization); and (2) the number of households served that contained
young children, elderly, or persons with disabilities, or any vulnerable household for each component.
Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only
on the number of households served for each program component (42 USC 8629; 45 CFR section 96.82).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
The Annual Report on Households Assisted by LIHEAP contains data that is specific to benefits paid to
eligible participants. The data that is used to compile the annual report is based off of case data that is
reported to the New Hampshire Department of Energy (the Department) from its subrecipients as the
Department has entered into grant agreements with third parties that are responsible for the eligibility
determination and benefit payment process. As part of our testwork, we were unable to verify that the
Department had performed any monitoring procedures over the data provided by each subrecipient to
ensure that the data reported within the annual report was complete and accurate.
Cause
The cause of the condition found was primarily due to insufficient resources and constraints due to COVID-
19 and insufficient controls to ensure that the documentation reported by the subrecipients is complete and
accurate.
Effect
The effect of the condition found is that the Department may have reported inaccurate data within the
Annual Report on Households Assisted by LIHEAP.
F-69
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing internal controls, policies and procedures over
data reported by subrecipients to be utilized in the reporting process. This would include procedures to
ensure the data monitored and reviewed for completeness and accuracy.
View of Responsible Officials
The New Hampshire Department of Energy (NHDOE) concurs with the finding. As noted under Cause
above, insufficient resources and Covid-19 restrictions contributed to the Condition of this Finding. While
thorough desk monitoring of all sub-contractors were performed during the program year in addition to
program monitoring, the performance of fiscal monitoring was unable to be conducted due to Covid-19
restrictions.
Since that time, NHDOE has hired an assistant to the LIHEAP Program Manager. NHDOE will revise its
policies and procedures over data reported by sub-recipients and monitor the reports to ensure complete
and accurate data is reported.
Anticipated Completion Date: Prior to the start of the 2023 Program Year on October 1, 2022.
Contact Person
Eileen Smiglowski, LIHEAP Program Manager, Department of Energy
F-70
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-031
NH Department of Health and Human Services
Foster Care – Title IV-E (Assistance Listing #93.658)
Federal Award Numbers: 2001NHFOST, 2101NHFOST
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application
Type of Finding: Significant Deficiency
Prior Year Finding: 2020-018
Statistically Valid Sample: No
Criteria
Title IV-E agencies establish payment rates for maintenance payments (e.g., payments to foster parents,
childcare institutions or directly to youth). Payment rates may also be established for Title IV-E
administrative expenditures (e.g., payments to child placement agencies or other contractors, which may
be either subrecipients or vendors) and for other services. Payment rates must provide for proper
allocation of costs between foster care maintenance payments, administrative expenditures, and other
services in conformance with the cost principles. The Title IV-E agency’s plan approved by ACF must
provide for periodic review of payment rates for foster care maintenance payments at reasonable,
specific, time-limited periods established by the Title IV-E agency to assure the rate’s continuing
appropriateness for the administration of the Title IV-E program (42 USC 671(a)(11); 45 CFR section
1356.21(m)(1); 45 CFR section 1356.60(a)(1) and (c)).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During out testwork over the payment rate setting and application process, the Department for Health and
Human Services (the Department) conducted an analysis over the reasonableness of existing rates during
the quarter ending March 31, 2021. While the Department provided documentation to support that an
analysis of the rates was performed, there was no documentation provided to support that the analysis had
been reviewed or what the overall conclusions were surrounding the continued appropriateness of the
rates contained within the analysis.
Cause
The cause of the condition found was due to the Department not requiring the Department of Finance to
sign off on the rate review that was presented to them during the quarter ending March 31, 2021.
F-71
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Effect
The effect of the condition found is that the there was no formal documentation that the rate analysis had
been reviewed and what required actions, if any, were required to be taken as a result of the review. The
lack of a formal review process could result in rates that are no longer appropriate, based on the rate
analysis performed, being utilized in future periods.
Questioned Costs
None.
Recommendation
We recommend that the Department continue to review existing policies and procedures and relevant
internal controls to ensure that when foster care rates are periodically reviewed there is a formal review
process over the rate analysis performed and all actions to be taken as a result of the review are clearly
documented.
View of Responsible Officials
We concur, we are implementing an attestation form stating the Foster Care Rates have been reviewed
and will either remain unchanged or will increase.
Anticipated Completion Date: March 2022
Contact Person
Rebecca Lorden, Human Services Finance Director, Department of Health and Human Services
Christy Roy, Administrator III Rate Setting Unit, Department of Health and Human Services
F-72
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-032
NH Department of Health and Human Services
CCDF Cluster (Assistance Listing #93.575 and #93.596)
Federal Award Numbers: 2001NHCCDF, 2101NHCCDF
Federal Award Year: 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
As part of their CCDF plans, Lead Agencies must certify that procedures are in effect (e.g., monitoring
and enforcement) to ensure that providers serving children who receive subsidies comply with all
applicable health and safety requirements. This includes verifying and documenting that childcare
providers (unless they meet an exception, e.g., family members who are caregivers or individuals who
object to immunization on certain grounds) serving children who receive subsidies meet requirements
pertaining to health and safety. These requirements must address eleven specific areas—including first aid
and CPR, safe sleeping practices, and administration of medication—and childcare workers must be
trained in these areas (42 USC 9858c(c)(2)(I); 45 CFR section 98.41).
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During out testwork over the review of childcare providers related to health and safety requirements, we
noted that for 2 of 40 providers selected for testwork, the file indicated that the provider did not have
sufficient records to support that all required health and safety training requirements had been met. For
both providers, the New Hampshire Department of Health and Human Services (the Department) issued a
Statement of Findings to the provider that did not include these exceptions as requiring corrective action
and the requested corrective action at the time of the visit did not appear to be complete.
Cause
The cause of the condition found is likely due to additional information being provided to the Department
to address the missing training requirement certifications prior to the finalization of the Statement of
Findings but record of that information being received was not maintained or could not be located.
F-73
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Effect
The effect of the condition found is that childcare providers could have deficiencies in the health and
safety training requirements and those deficiencies may not be properly communicated and resolved
timely.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department review its existing internal controls and procedures to ensure that
all deficiencies identified during health and safety reviews are properly communicated to the provider.
These controls and procedures should ensure that corrective action plans are followed up on to ensure
that the deficiencies are properly and timely resolved by the provider.
View of Responsible Officials
We concur that 2 providers did not provide information on the day of the visit to indicate that staff
completed all the health and safety trainings required. Per He-C 4002.06(p), department staff reviews the
non-compliances found during the visit at the close of the visit or as soon as possible thereafter, and as
such, this information would have been communicated to the provider. The department’s process is to
provide additional time for providers to supply us with the required documentation to demonstrate
compliance before the statement of findings is issued. As the 2 programs were not cited for the non-
compliance, most likely the documentation was provided and the information in the file was not updated
by department staff to indicate that. We concur that we need to strengthen our internal processes to ensure
our documentation is accurate.
We do not concur that this is a material finding, given that in 3 other samples when the documentation
demonstrated that health and safety trainings were not completed by staff, the programs were cited for the
non-compliance and corrective action was required.
Anticipated Completion Date: April 2022
Contact Person
Melissa Clement, Chief Child Care Licensing Unit, Department of Health and Human Services
F-74
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-033
NH Department of Health and Human Services
Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93.778)
Federal Award Numbers: 1905NH5MAP, 2005NH5MAP, 2105NH5MAP, 1905NH5ADM,
2005NH5ADM, 2105NH5ADM, 1905NHIMPL, 2005NHIMP, 2105NHIMP
Federal Award Years: 2019, 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Eligibility
Type of Finding: Significant Deficiency and Material Noncompliance
Prior Year Finding: 2020-023
Statistically Valid Sample: No
Criteria
Eligibility for Medicaid can be broadly grouped into determinations based on Modified Adjusted Gross
Income (MAGI-based determination) and non-MAGI determinations (e.g., Aged, Blind and Disabled).
Auditors should test eligibility determinations made for fee-for-service and managed care beneficiaries.
The auditors should re-determine eligibility to ensure beneficiaries qualify for the Medicaid program and
are in the appropriate enrollment category.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
The Division of Medicaid Services (DMS), with the Department of Health and Human Services (the
Department) administers the Medicaid program. The Bureau of Family Assistance (BFA) is responsible
for determining eligibility for non-MAGI groups as well as MAGI groups according to New Hampshire
policy.
One hundred sixty MAGI and non-MAGI participants were selected for review, who fell into four main
eligibility types: fee for service, managed care, waiver, and nursing home. During the audit we noted that
for 74 of 160 participants, (15 of 40 for fee for service, 2 of 40 for MCO, 19 of 40 waiver and 38 of 40
nursing home) the Department was unable to provide support to verify that the participants social security
income had been matched, via a Bendex match, with the Social Security Administration (SSA) because
the SSA has not provided New Hampshire authorization to share that information. Therefore, validation
that the participants were deemed eligible by the SSA was not able to be determined.
Cause
The cause of the condition found under paragraph (1) is that the SSA has not issued a Redisclosure
Memorandum for the CMS Single Audit. Without the Memorandum, states do not have permission to
F-75
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
disclose SSA data to any auditors. Additionally, the cause of the condition found under paragraph (2) is due
to inappropriate follow-up on system assigned tasks to ensure timely completion.
Effect
The Department could be providing Medicaid benefits to participants who may be ineligible for the
program.
Questioned Costs
Not determinable.
Recommendation
The Department should obtain approval from SSA to share data with the single auditor or work with SSA
to provide correspondence to the single auditor confirming eligibility for individuals during the audit
process. Additionally, we recommend the Department enhances its internal control procedures to ensure
tasks assigned by the system are worked timely.
View of Responsible Officials
We concur. We have submitted a Data Exchange Coordinator request to SSA that was signed by the
Commissioner.
Anticipated Completion Date: Approval of request sent to SSA
Contact Person
Ann Driscoll, Administrator III, Department of Health and Human Services
F-76
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-034
NH Department of Health and Human Services
Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93,778)
Federal Award Numbers: 1905NH5MAP, 2005NH5MAP, 2105NH5MAP, 1905NH5ADM,
2005NH5ADM, 2105NH5ADM, 1905NHIMPL, 2005NHIMP, 2105NHIMP
Federal Award Years: 2019, 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and
Enrollment)
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: 2020-022
Statistically Valid Sample: No
Criteria
In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state,
and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and
447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and
enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make
certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106).
Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and
termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR
Part 438, Subpart H.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
The Department assigns risks to each provider based on their provider type. All new provider enrollments
and moderate and high-risk revalidations are reviewed and approved by the Department of Health and
Human Services (the Department). However, for limited risk revalidations, the Department has
outsourced this service to the Department’s Medicaid Management Information System fiscal agent
(Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues
noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal
Agent to perform a quality assurance review over all new provider and revalidations prior to the
notification that they are an eligible provider for State of New Hampshire services to address the accuracy
of enrollment. The Department does not currently have a completeness process to ensure all providers are
revalidated timely.
F-77
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
During our testwork over provider eligibility, we noted:
1. For 5 of 65 providers, there was greater than five years between the Department revalidating the
providers eligibility. These providers were due for revalidation prior to the start of the COVID-19
pandemic.
2. For 2 of 65 providers, the identified providers were enrolled via roster and the Department
maintained an attestation that is uploaded with the enrollment with the provider facility. We
viewed the attestation from the provider facility, and noted it was uploaded to the MMIS during
the audit period but signed in 2012. The agreement should be more current than 2012.
Cause
The Department controls address accuracy but not completeness which would identify providers that are
due revalidation.
Effect
The effect of the condition found is that the Department does not revalidate providers timely and obtaining
all relevant supporting documentation which could lead to ineligible providers billing for Medicaid
services.
Questioned Costs
Not determinable.
Recommendation
We recommend the Department implement monitoring and communication controls to continually assess
the need for provider revalidation to ensure that it is executed timely and in accordance with the
requirements, including a plan to ensure all reviews are performed timely and include obtaining all
relevant information.
View of Responsible Officials
We concur. Program Integrity/Provider enrollment is currently working on a strategy to identify
revalidations not completed and a plan to disposition those providers while ensuring minimal disruption
to member services and protecting limited provider networks for certain disciplines such as the mental
health network. Program Integrity/Provider enrollment anticipates all past due provider revalidations to
be dispositioned by end of December 2022.
Program Integrity will be coordinating with Medicaid operations to update the original Provider
attestation to be completed by December 2022.
Anticipated Completion Date: December 2022
Contact Person
Karen Carleton, Administrator II, Department of Health and Human Services
F-78
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-035
NH Department of Health and Human Services
Medicaid Cluster (Assistance Listing #93.775, #93.777, and #93.778)
Federal Award Numbers: 1905NH5MAP, 2005NH5MAP, 2105NH5MAP, 1905NH5ADM,
2005NH5ADM, 2105NH5ADM, 1905NHIMPL, 2005NHIMP, 2105NHIMP
Federal Award Years: 2019, 2020, 2021
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provision: Medicaid National Correct Coding
Initiative
Type of Finding: Material Weakness and Scope Limitation
Prior Year Finding: 2020-024
Statistically Valid Sample: No
Criteria
In accordance with Section 1903(r) of the Social Security Act, effective October 1, 2010, SMAs were
required to incorporate NCCI methodologies into the state Medicaid programs pursuant to the
requirements of Section 6507 of the Affordable Care Act.
In paying applicable Medicaid claims, states’ MES are required to completely and correctly implement
the following six Medicaid NCCI methodologies to ensure that only proper payments of procedures are
reimbursed.
a. NCCI Procedure-to-Procedure (PTP) edits for practitioner and ambulatory surgical center (ASC)
claims.
b. NCCI PTP edits for outpatient hospital services, including emergency department, observation
care, and outpatient hospital laboratory services.
c. Medically Unlikely Edit (MUE) units of service (UOS) edits for practitioner and ASC services.
d. MUE UOS edits for outpatient hospital services including emergency department, observation
care, and outpatient hospital laboratory services.
e. MUE UOS edits for durable medical equipment (DME) billed by providers.
f. NCCI PTP edits for durable medical equipment (added in October 2012).
States are also required to use:
• all four components of each Medicaid NCCI methodology;
• the most recent quarterly Medicaid NCCI edit files for states;
• the Medicaid NCCI edits in effect for the date of service on the claim line or claim;
• the claim-adjudication rules in the Medicaid NCCI methodologies; and
F-79
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
• all modifiers for Healthcare Common Procedure Coding System (HCPCS) codes and Current
Procedural Terminology (CPT) codes needed for the correct adjudication of applicable Medicaid
claims.
The NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual contain
additional requirements for implementation of the NCCI methodologies.
The Medicaid NCCI methodologies must be applied to Medicaid fee-for-service claims submitted with,
and reimbursed on the basis of, HCPCS codes and CPT codes. This includes claims reimbursed on a fee-
for-service basis in state Medicaid Primary Care Case Management managed care programs. Application
of NCCI methodologies to fee-for-service claims processed by other entities, including limited benefit
plans or Managed Care Organizations, is not required; however, if SMAs require the application of NCCI
methodologies to fee-for-service claims processed by such entities, then such entities must meet NCCI
program requirements, including compliance with the NCCI Medicaid Policy Manual and the NCCI
Medicaid Technical Guidance Manual.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
Per the Department of Health and Human Services (the Department), the edits required by the above
criteria reside in the Medicaid Management Information System (MMIS) and are activated based on
responses sent back to MMIS from Cotiviti, a third-party vendor. MMIS is managed by Conduent.
Conduent has a SOC1 report prepared to report on the fairness of the presentation of management’s
description of the service organization’s system and the suitability of the design of the controls to achieve
the related control objectives included in the description as of a specified date. The Conduent SOC1
report for the period July 1, 2020 to June 30, 2021 did not include consideration of the NCCI process with
Cotiviti and the related NCCI edits within MMIS, outside of a brief description in the report. Based on
this, there is no ability to validate the NCCI process as the control environment and control objectives
were not included the SOC report.
Cause
The cause of the condition found was primarily due to the Departments lack of recognizing and notifying
Conduent of the requirement to test the automatic MMIS NCCI edits within the SOC1 report.
Effect
The six required Medicaid NCCI methodologies to ensure that only proper payments of procedures are
reimbursed may not be completely and correctly implemented by the Department.
Questioned Costs
Not determinable.
Recommendation
We recommend the Conduent SOC1 report for the period July 1, 2021 to June 30, 2022, the Department
implement a process to ensure the auditor of MMIS tests the automatic NCCI edits for the suitability of
F-80
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
the design of the controls to achieve the related control objectives and properly includes any additional
general control environment.
View of Responsible Officials
We concur. In SFY 2021, the State and Conduent prepared a plan to adequately test NCCI edits. Testing
will be completed in SFY 2022 and included in the 2022 SOC1 report.
Anticipated Completion Date: August 2022
Contact Person
Ken Gagne, MMIS Technology Manager, Department of Health and Human Services
F-81
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Finding Reference Number: 2021-036
NH Department of Health and Human Services
State Targeted Response to the Opioid Crisis (Assistance Listing #93.788)
Federal Award Numbers: 1H79TI083326-01
Federal Award Year: 2021
U.S. Department of Health and Human Services
Compliance Requirement: Reporting – Schedule of Assistance of Federal Awards
Type of Finding: Significant Deficiency
Prior Year Finding: None
Statistically Valid Sample: No
Criteria
Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements,
Cost Principles, and Audit Requirements, section 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.
While not required, the auditee may choose to provide information requested by Federal awarding
agencies and pass-through entities to make the schedule easier to use.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal
control over federal awards that provide reasonable assurance that the non-federal entity is managing the
federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition
During our testwork over the Schedule of Expenditures of Federal Awards (SEFA), we noted that the
New Hampshire Department of Health and Human Services (Department) incorrectly reported the value
of subrecipient expenditures included within the subrecipient expenditure column. For the year ended
June 30, 2021, the Department incurred $23,186,264 in subrecipient expenditures for this program and
incorrectly reported that there were no subrecipient expenditures on the draft SEFA. The error was
subsequently identified and corrected as a result of the audit process. While the subrecipient expenditure
column was not accurate, the total expenditure column was accurately reported.
Cause
The cause of the condition found is due to the Department not having information regarding the total
subrecipient expenditures at the time the draft SEFA was prepared. Subsequent to the submission of the
draft information, the Department did not follow up to ensure that the subrecipient expenditure data was
updated so it was reported accurately.
Effect
The effect of the condition found is that the Schedule of Expenditures of Federal Awards was not
accurately prepared.
F-82
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SCHEDULE OF CURRENT YEAR FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
Questioned Costs
None.
Recommendation
We recommend that the Department review its existing policies and procedures for preparing the
Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate.
View of Responsible Officials
The Department concurs. SEFA procedures will be reviewed and strengthened to ensure adequate
controls are in place.
Anticipated Completion Date: September 30, 2022
Contact Person
Hannah Glines, Revenue Director, Department of Health and Human Services
F-83
THIS PAGE INTENTIONALLY LEFT BLANK
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
Lack of internal controls and
Partially
Department of procedures in place to ensure
2020-002 16.575 Not Determinable Resolved (see
Justice documentation to support the FFR,
G-9)
as filed, is maintained by the
Department of
Unforeseen side effects of system
2020-003 Employment 17.225 Not Determinable Resolved
changes made to NHUIS.
Security
Department of Lack of formalized procedures over
2020-004 Employment 17.225 the review process and inconsistent None Resolved
Security evidence
BAM reviews may not have been
Department of
performed in accordance with
2020-005 Employment 17.225 Not Determinable Resolved
federal regulations and errors
Security
identified as a result of the BAM
20.205 Non Compliance with Procurement
Department of
2020-006 20.219 Suspension and Debarrment Not Determinable Resolved
Transportation
20.224 Requirements
20.205 Partially
Department of Non Compliance with Subrecipient
2020-007 20.219 Not Determinable Resolved (see
Transportation Monitoring Requirements
20.224 G-11)
Costs incurred prior to the start of
Department of
the federal award period were Unresolved
2020-008 Environmental 66.458 Not Determinable
inappropriately charged to the (see G-14)
Services
federal grant
The Department did not sufficiently
monitor the LEA’s compliance
Department of related to the removal of students
2020-009 84.010 None Resolved
Education from the cohort to ensure that
graduation rates are accurately
reported to the Department.
The Department did not sufficiently
monitor the LEA’s compliance with
Department of federal regulations applicable to
2020-010 84.010 None Resolved
Education Title 1 in accordance with 2 CFR
section 300.331(b) and 2 CFR
sections 200.331(d) through (f).
G-1
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
The Department did not properly
reduce the LEA’s annual allocation,
Department of due to its failure to meet the annual
2020-011 84.010 Not Determinable Resolved
Education MOE requirement, and received a
grant amount larger than it should
have.
Unresolved
Department of (see G-16)
Special Tests and Provisions: Child
2020-012 Health and 93.558 Not Determinable and related
Support Non-Cooperation
Human Services finding 2021-
023
Special Tests and Provisions: Lack
Department of of Child Care for Single Custodial
2020-013 Health and 93.558 Parent of Child under Age Six, Not Determinable Resolved
Human Services Child Support Non-Cooperation,
Penalty for Refusal to Work
Inadequate review controls in place
Unresolved
to ensure sufficient documentation
Department of (see G-19)
is maintained to support the number
2020-014 Health and 93.558 None and related
of work hours reported by
Human Services finding 2021-
participants and that the hours
025
worked are accurately reported
Department of
Special Tests and Provisions:
2020-015 Health and 93.558 None Resolved
Penalty for Refusal to Work
Human Services
Unresolved
Department of (see G-22)
Matching, Level of Effort and
2020-016 Health and 93.558 Not Determinable and related
Earmarking – Maintenance of Effort
Human Services finding 2021-
024
G-2
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
Insufficient controls to ensure that
the required judicial determination
of reasonable efforts to finalize a
permanency plan is obtained within
Department of
the appropriate time period allowed
2020-017 Health and 93.658 Not Determinable Resolved
and that all appropriate
Human Services
documentation is maintained for
each participant documenting that
they are eligible to receive Foster
Care IV-E services.
Insufficient controls and lack of
written documentation to support Unresolved
Department of the process for reviewing foster care (see G-25)
2020-018 Health and 93.658 maintenance rates and a lack of a Not Determinable and related
Human Services documented schedule for when the finding 2021-
maintenance rates would be 031
reviewed
Department of Partially
2020-019 Health and 93.667 Subrecipient Monitoring Not Determinable Resolved (see
Human Services G-27)
Department of The Department did not request
2020-020 Health and 93.667 funds for reimbursement in None Resolved
Human Services accordance with the approved TSA
Department of 93.775 Special Tests and Provision: Resolved
2020-021 Health and 93.777 Utilization Control and Program None Significantly
Human Services 93.778 Integrity Differently
Unresolved
Department of 93.775 Special Tests and Provision: (see G-32)
2020-022 Health and 93.777 Provider Eligibility (Screening and None and related
Human Services 93.778 Enrollment) finding 2021-
034
Unresolved
Department of 93.775 (see G-35)
2020-023 Health and 93.777 Eligibility Not Determinable and related
Human Services 93.778 finding 2021-
033
G-3
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
Unresolved
Department of 93.775 Special Tests and Provision: (see G-37)
2020-024 Health and 93.777 Medicaid National Correct Coding None and related
Human Services 93.778 Initiative finding 2021-
035
Department of
2020-025 Health and 93.788 Subrecipient Monitoring Not Determinable Resolved
Human Services
Partially
Department of Reporting – lack of internal controls
2019-005 16.575 Not Determinable Resolved (see
Justice and procedures
G-40)
Special Tests and Provisions –
Department of Annual Report Card, High School
2019-008 84.010 None Resolved
Education Graduation Rate – lack of internal
controls and procedures
Department of 84.027 Subrecipient Monitoring –
2019-009 None Resolved
Education 84.173 insufficient controls and procedures
Partially
Department of Subrecipient Monitoring –
2019-010 84.048 None Resolved (see
Education insufficient controls and procedures
G-42)
Department of 93.044 Partially
Subrecipient Monitoring –
2019-011 Health and 93.045 None Resolved (see
insufficient controls and procedures
Human Services 93.053 G-45)
Department of 93.044 Matching, Level of Effort,
2019-012 Health and 93.045 Earmarking – insufficient review None Resolved
Human Services 93.053 controls
Department of 93.044 Special Tests and Provisions –
2019-013 Health and 93.045 Distribution of Cash – insufficient Not Determinable Resolved
Human Services 93.053 controls and procedures
G-4
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
Unresolved
Department of Special Tests and Provisions: Child (see G-49)
93.558
2019-015 Health and Support Non-Cooperation – Not Determinable and related
93.714
Human Services inadequate review controls finding 2021-
023
Special Tests and Provisions: Lack
Department of
93.558 of Child Care for Single Custodial
2019-016 Health and Not Determinable Resolved
93.714 Parent of Child under Age Six –
Human Services
inadequate review controls
Unresolved
Special Tests and Provisions:
Department of (see G-51)
93.558 Penalty for Failure to Comply with
2019-017 Health and Not Determinable and related
93.714 Work Verification Plan – inadequate
Human Services finding 2021-
review controls
025
Department of Partially
Subrecipient Monitoring –
2019-018 Health and 93.569 None Resolved (see
insufficient controls and procedures
Human Services G-53)
Department of Partially
Subrecipient Monitoring –
2019-019 Health and 93.667 Not Determinable Resolved (see
insufficient controls and procedures
Human Services G-56)
Special Tests and Provision:
Department of 93.775 Resolved
Utilization Control and Program
2019-020 Health and 93.777 None Significantly
Integrity – inability to provide
Human Services 93.778 Differently
required documentation
Unresolved
Special Tests and Provision:
Department of 93.775 (see G-59)
Provider Eligibility (Screening and
2019-021 Health and 93.777 None and related
Enrollment) – inconsistent processes
Human Services 93.778 finding 2021-
and documentation
034
G-5
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
Unresolved
Department of 93.775 (see G-62)
Eligibility – ineffective controls and
2019-022 Health and 93.777 Not Determinable and related
improper oversight
Human Services 93.778 finding 2021-
033
Department of
Subrecipient Monitoring –
2019-023 Health and 93.778 Not Determinable Resolved
insufficient controls and procedures
Human Services
Department of Subrecipient Monitoring –
2019-024 97.036 Not Determinable Resolved
Safety insufficient controls and procedures
Backlog of Medicaid cases
Department of 93.775 Resolved
identified for investigations relating
2018-002 Health and 93.777 None Significantly
to unnecessary utilization of care
Human Services 93.778 Differently
and services
Department of
Special Test and Provision –
2018-006 Health and 93.959 None Resolved
Independent Peer Reviews
Human Services
Incorrect sanctioning of benefit,
Unresolved
Noncompliance under Special Test -
Department of (see G-65)
Child Support Noncooperation and
2018-007 Health and 93.558 None and related
Adult Custodial Parent of Child
Human Services finding 2021-
Under Six When Childcare Not
023
Available
Insufficient documentation to
support compliance with required
Department of
maintenance of effort (MOE) Unresolved
2018-008 Health and 93.558 None
requirements as it relates to in-kind (see G-68)
Human Services
contributions from third party
organizations
Unresolved
Department of Special Test and Provision - (see G-71)
2018-009 Health and 93.558 Insufficient documentation to Not Determinable and related
Human Services support work verification activities finding 2021-
025
G-6
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
General Information Technology
Department of 93.575 Controls related to access to
2018-012 Health and 93.596 programs and data within the None Resolved
Human Services 93.558 Bridges application were not
operating effectively for the period
Reporting
• Annual SF-425 FFR requirement
Department of was not submitted timely
2018-014 Health and 93.268 • Schedule of Expenditures of None Resolved
Human Services Federal Awards (SEFA) reporting
was not reviewed and incorrect
The Department of Health and
Department of
Human Services (DHHS) should Unresolved
2018-016 Health and 93.069 None
comply with the earmarking (see G-73)
Human Services
requirements.
The Department should improve
Department of internal controls over and Partially
2018-018 Health and 93.889 compliance with reporting of the SF- $ 14,497 Resolved (see
Human Services 425 annual report and Period of G-75)
Performance Requirements.
Lack of Controls over Schedule of
Expenditures of Federal Awards
Department of Partially
93.069 (SEFA) Reporting
2018-019 Health and None Resolved (see
93.889 and Financial Reporting and
Human Services G-77)
Reconciliation
Department of
Direct payroll costs not approved
2018-020 Health and 93.889 None Resolved
appropriately
Human Services
Lack of controls and policies and
procedures over ensuring LEAs are
Department of
2018-030 84.010 maintaining documentation to None Resolved
Education
support removal of students from
the regulatory adjusted cohort
G-7
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
FINDING STATE ALN QUESTIONED CURRENT
DESCRIPTION
NUMBER AGENCY NUMBER COSTS STATUS
Unresolved
10.553 Internal controls were not
Department of (see G-80)
10.555 functioning and compliance over
2018-034 Administrative None and related
10.556 accountability for USDA-donated
Services finding 2021-
10.559 foods was not met.
006
10.553
Internal controls were not
Department of 10.555
2018-035 functioning and noncompliance over None Resolved
Education 10.556
reporting
10.559
TOTAL UNRESOLVED QUESTIONED COSTS AS OF JUNE 2021: $ 14,497
G-8
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-002
NH Department of Justice
Crime Victim Assistance (16.575)
Federal Award Numbers: 2016-VA-GX-0061, 2017-VA-GX-0044, 2018-V2-GX-0036
Federal Award Year: 2016, 2017, 2018
U.S. Department of Justice
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2019-005
Statistically Valid Sample: No
Criteria
Federal Financial Report (FFR) (SF-425/SF-425A (OMB No. 0348-0061)). Recipients use the FFR as a
standardized format to report expenditures under Federal awards, as well as, when applicable, cash status
(Lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a
cash status report unless otherwise indicated. Electronic versions of the standard forms are located on
agency’s home page.
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
During our testwork over the federal reporting process, we were unable to agree the current period
expenditures reported to external supporting documentation for each of the 5 reports selected for
testwork. The Department prepared each federal financial report (FFR) using internally prepared
spreadsheets, referred to as VOCA spreadsheets. The Department continuously updates these
spreadsheets and did not save the version that was used to prepare the FFR. In addition, the Department
did not maintain documentation of a formal reconciliation between the VOCA spreadsheets and the State
of New Hampshire’s centralized accounting system, NH First, at the time of filing. As such, we were
unable to agree the amounts reported on the FFR to the underlying supporting records or verify whether
the federal reports filed were complete and accurate. The Department did provide an additional
reconciliation file to support the completeness and accuracy of the federal reports but we were unable to
agree this file to the NH First detail provided by the Department to support reporting of expenditures on
the schedule of expenditures of federal awards. The Department also provided guidance from the United
States Department of Justice, Office of the Chief Financial Officer, indicating that previously submitted
FFR’s are unable to be modified to fix any errors. Changes to previous FFR’s must be indicated in the
most recently filed FFR.
G-9
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Cause
The cause of the condition found was primarily due to the lack of internal controls and procedures in
place to ensure documentation to support the FFR, as filed, is maintained by the Department and that the
internal spreadsheets used to prepare the FFR reconcile to NH First.
Effect
The effect of the condition found is that the Department may not have filed accurate federal reports.
Questioned Costs
Not determinable.
Recommendation
We recommend the Department review its existing policies and implement internal control procedures to
ensure it complies with federal financial reporting requirements. These procedures should include that for
each FFR filed, the Department maintains accounting records which support the amounts reported. We
also recommend that the Department take steps to ensure the records maintained internally agree to the
State’s accounting system of record, NH First.
View of Responsible Officials
The Department of Justice agrees with this recommendation. The internal controls involved with the FFR
process have been enhanced since the end of the audit period, to include reporting FFR’s from the grant
spreadsheets after they are reconciled to NH First data. All grant expenditures and revenues, including
administrative costs, are now tracked using activity codes that correlate to each grant. The Grants
Management Unit (GMU) reconciles the data each month and reports into the FFR’s quarterly, as
required. The spreadsheets that are used for reporting the FFR are now saved for each reporting period.
The GMU Policy and Procedures have been updated to reflect these changes.
Anticipated Completion Date
Complete
Contact Person
Thomas Kaempfer
Status as of Opinion Date
Although partially resolved at June 30, 2021, the Department has since received formal correspondence
from the Office of Justice Programs, Office of Audit, Assessment, and Management dated March 30,
2022 indicating, based on their review of corrective actions taken, no further action is required for
findings issued in the fiscal year ending June 30, 2020 pertaining to the US Department of Justice.
G-10
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-007
NH Department of Transportation
Highway Planning and Construction Cluster (20.205, 20.219, 20.224)
Federal Award Numbers: 2020G996115, 2021G996115
Federal Award Year: 2020,2021
U.S. Department of Transportation
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.331(a); and
2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b))
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
The New Hampshire Department of Transportation (the Department) enters into subrecipient agreements
primarily with local municipalities to provide funding to assist the municipality with allowable local
transportation projects (such as road paving, culverts, etc). During our testwork over subrecipient
monitoring, we noted the following:
A. The Department did not communicate all the required elements as required by CFR 200.331(a) to
each of the 9 subrecipients selected for testwork. Specifically, the following elements were not
communicated:
a. Federal Award Identification Number (FAIN)
b. Federal Award Date of award to the recipient by the Federal Agency
c. Subaward period of performance start and end date
d. CFDA number and name
e. Identification of whether the award is R&D
f. Indirect cost rate for the federal award
B. The Department does not have any formal policies, procedures and related internal controls over
evaluating a subrecipient’s risk of non-compliance with federal requirements. Further, we noted
G-11
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
that the Department did not perform any evaluations over the 9 subrecipients selected for
testwork.
Cause
The cause of the condition found is that the Department began utilizing a risk assessment questionnaire on
July 1, 2020 for all subrecipients in which a municipal agreement is entered into. The implementation of
the new policy and procedure was subsequent to the period under audit. In addition, the Department does
not have policies and procedures in place to ensure that all required information as outlined in 2 CFR
section 200.331(a) is communicated to the subrecipient.
Effect
The effect of the condition found is that the Department did not comply with the 2 CFR sections
200.331(a) and 200.331(b).
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department continues to review its existing policies, procedures and internal
controls to ensure that the Department complies with the provisions of 2 CFR section 200.331(a) and 2
CFR section 200.331(b). This would include ensuring that:
1. All required award information is communicated to subrecipients; and
2. A documented risk assessment is performed over all subrecipients and the results of that risk
assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient.
View of Responsible Officials
1. The Department did modify its documentation to incorporate the needed items when identified in a
previous audit. The Department assigns both a unique state project number and federal project
number as identification for each project and includes both in the Municipal Agreement.
Commencement and completion time frames are listed in the Municipal Agreement with specific
dates triggered by the first notice to proceed. The CFDA number and name is included in each
reimbursement request letter the sub-recipient receives. Our projects are not R&D but would be
identified as such in the Municipal Agreement. Neither Municipalities nor the Department charge an
indirect cost on Municipal projects. However, the Department will review the grant agreement to
ensure that all required information is included although not utilized.
2. The Department has added the risk assessment questionnaire as of July 1, 2020.
Anticipated Completion Date
1. July 1, 2018. Review to be completed by December 2021.
2. July 1, 2020
Contact Person
Bill Watson, Administrator, Bureau of Planning and Community Assistance
G-12
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Status as of Opinion Date
Although partially resolved at June 30, 2021, the Department has since completed their corrective actions.
The Department has modified its municipal agreements to incorporate all the required items. Revisions
were complete as of approximately December 31, 2021.
G-13
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-008
N.H. Department of Environmental Services
Clean Water State Revolving Fund Cluster: (66.458)
Federal Award Numbers: CS33000119
Federal Award Year: 2019
U.S. Environmental Protection Agency
Compliance Requirement: Period of Performance
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A non-federal entity may charge to the federal award only allowable costs incurred during the period of
performance and any costs incurred before the federal awarding agency or passthrough entity made the
federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR section
200.309).
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
During our testwork over period of performance, we noted the New Hampshire Department of
Environmental Services (the Department) appeared to have charged expenditures to the federal fiscal year
2019 award that had a service period prior to the start date of the award period of October 1, 2019. The
Department did not appear to verify whether these expenses had been incurred within the period of
performance before including the expenses within the Department’s request for federal reimbursement.
Cause
The cause of the condition found is that the Department indicated that while the service period was
incurred prior to the start of the federal award period, the Department did not pay for the services until
after the federal award period began. As the Department reports based upon cash basis expenditures, the
Department believed that the costs would be allowable.
Effect
The effect of the condition found is that costs incurred prior to the start of the federal award period were
inappropriately charged to the federal grant resulting in unallowable costs being incurred.
Questioned Costs
Not determinable.
G-14
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Recommendation
We recommend the Department develop and implement policies, procedures and internal controls to
ensure all expenses charged to a federal award are incurred within the period of performance of the grant
award prior to requesting federal reimbursement. This would include ensuring that the service period
associated with the cost also relates to a service period within the awards period of performance.
View of Responsible Officials
The Department does not concur with this finding. When DES was presented this finding, the department
reached out to its federal Cognizant Agency (EPA) for guidance on this issue. Their response was:
“EPA does not feel this is a valid finding based on the nature of the CWSRF. The Clean Water Act
(CWA) provides an “allowance” of up to four percent of the cumulative awards. As long as the
administrative expense charged does not bring the total cumulative admin costs in excess of 4 percent of
the cumulative awards, the expense is eligible. The statute doesn’t limit the CWSRF admin expenses to
the timing of project/budget period of the individual annual grants – just the reverse, it makes it clear that
it is cumulative. In our reviews, this transaction would not have been an improper payment. We find this
is an eligible expense and can be reimbursed from the 2019 Cap Grant.”
DES will continue to work with both the auditors and EPA to ensure that all parties come to a mutual
understanding of the rules and regulations.
Anticipated Completion Date
N/A
Contact Person
Susan Carlson, Chief Operations Officer
Rejoinder
Title 30, section 35.3120(g)(1) states the money in the SRF may be used for the reasonable costs of
administering the SRF, provided that the amount does not exceed 4% of all grant awards receive by the
SRF. Expenses of the SRF in excess of the amount permitted under this section must be paid for from
sources outside the SRF.
The condition found however does not question whether federal funds can be used to support
administrative costs. The condition found identified that administrative costs were charged and drawn
under the federal fiscal year 2019 grant that were incurred or paid for by the State of New Hampshire
prior to the start of the performance period for this grant which was October 1, 2019. As the costs were
incurred prior to when the federal funds became available for use, the costs do not appear to be allowable
under the federal fiscal year 2019 grant.
Status as of Opinion Date
Although unresolved at June 30, 2021, the Department has since received correspondence dated
November 18, 2021 from the Environmental Protection Agency supporting the Department’s position and
indicating no further action necessary.
G-15
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-012
NH Department of Health and Human Services
Temporary Assistance for Needy Families (93.558)
Federal Award Numbers: 2019G996115, 2020G996115
Federal Award Year: 2019, 2020
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions: Child Support Non-Cooperation
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2019-015
Statistically Valid Sample: No
Criteria
If the State agency responsible for administering the State plan under Title IV-D of the Social Security
Act determines that an individual is not cooperating with the State in establishing paternity, or in
establishing, modifying or enforcing a support order with respect to a child of the individual, and reports
that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an
amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the
family of the individual and (20 may deny the family any TANF assistance. Health and Human Services
(HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this
required State child support program (45 CFR sections 264.30 and 264.31)
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition
During our testwork related to child support non-cooperation, we noted the following:
A. For 2 of 40 participants selected for testwork, while the participant had been correctly sanctioned due
to non-cooperation, the sanction was not applied timely, resulting in a delay in applying the sanction
against the participants benefit payment.
B. For 1 of 40 participants selected for testwork, while the participant had been correctly sanctioned due
to non-cooperation, the sanction was lifted earlier than it should have been resulting in the
participant’s benefit payment being larger than it should have.
C. For 4 of 40 participants selected for testwork, while the participant should have been sanctioned due
to non-cooperation, the sanction was never applied to the participant’s benefit payment, resulting in
the participant being overpaid.
D. For 7 of 40 participants selected for testwork, the participant was incorrectly sanctioned for non-
cooperation and their benefits should not have been reduced.
G-16
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Cause
The cause of the condition found was a result of inadequate review controls in place to ensure sufficient
documentation is maintained to support the beginning and termination of sanction periods related to child
support non-cooperation and ensuring that the New Heights system is updated timely to reflect the correct
sanction dates. In addition, there appears to be inadequate controls in place to ensure that the sanction
imposed is valid.
Effect
The effect of the condition found is that participant benefit payments may not be accurately paid and could
result in unallowable costs charged to the federal program.
Questioned Costs
Not determinable.
Recommendation
We recommend that the New Hampshire Department of Health and Human Services (the Department)
enhance its existing controls and procedures to ensure the documentation used to support the beginning and
termination of sanction periods is maintained and that those dates are accurately reflected within the New
Heights system. In addition, controls and procedures should be implemented so that sanctions are properly
reviewed and approved prior to implementation to ensure that the sanction being imposed is valid.
View of Responsible Officials
While that the Department concurs with most of the errors included in the findings, we do not concur with
all of them. See below for details.
A. We concur that the sanction for non-cooperation was not applied timely.
B. We concur that the sanction for non-cooperation was lifted earlier than it should have been.
C. We concur, the participant should have been sanctioned due to non-cooperation, resulting in the
participant being overpaid.
D. We concur with this finding. However, we wanted to note that while the clients in these cases
were properly reported as non-cooperation by BCSS, the action taken by the BFA worker was
done incorrectly. The Policy change in 2018 SR-18-29 for FAP cases allows us to close these
cases for failing to cooperate and exploring other benefits the household is entitled to when the
parent or relative was not included in the assistance group.
Although the errors for Conditions A – D are valid, the cases were pulled before the 2019 KPMG audit
was completed and the department’s corrective action plan was in place. The pulls during this period of
time do not provide a true reflection of the progress made since implementing the department’s corrective
action plan which was put in place June 2020 in response to the 2019 KPMG audit findings. We believe
the corrective action plan may have prevented some of the errors.
The previous corrective action plan included:
• coaching discussions between the supervisors and workers directly associated with each of the
findings,
• a state wide staff meeting where all of the findings from the 2019 KPMG audit (which include
the same findings of the Conditions stated above) were reviewed, and
G-17
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
• The New Hire training presentation regarding how to properly sanction a case for non-
cooperation was updated.
In addition:
• The Bureau of Family Assistance (BFA) has partnered with the Bureau of Child Support Services
(BCSS) for quarterly meetings. To date, these meetings have resulted in a uniform Non
Cooperation/Cooperation process to address concerns of the 608 forms being properly placed in
the clients file as well as a clear process for all staff to follow to ensure proper action on cases
occurs timely.
• BFA is currently working with the BCSS DoIT department to create a report that will be utilized
to do quarterly quality assurance reviews on cases that are listed with BCSS as being under
sanction.
• Quarterly quality assurance reviews will be performed to ensure:
non-cooperation/cooperation protocols put in place in June 2020 are being followed and
applied correctly
non-cooperation/cooperation protocols are being executed timely.
• The above action plans for Condition A, B, and C, will also apply for Condition D. However, in
addition to this, BFA will also be creating a refresher training. The training will include the
proper way to act on a non-cooperation request from BCSS based on the FANF Cash program
that is open, how to fill out HEIGHTS screens appropriately, and how to utilize NECSES (BCSS
computer system) to verify whether BCSS has a sanction on the parent/relative for the case they
are working on.
BFA anticipates having this training developed by September 30, 2021 and take place during
the fall.
Anticipated Completion Date
January 2022
Contact Person
Karyl Provost, Administrator III
Status as of Opinion Date
Although unresolved at June 30, 2021 as a similar finding was identified in the 2021 single audit report;
see finding and views of responsible officials at 2021-023; the Department has since developed and
conducted training sessions on November 3, 2021. The department has also converted the training into a
Moodle platform to provide the training to field personnel as well.
G-18
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-014
NH Department of Health and Human Services
Temporary Assistance for Needy Families (93.558)
Federal Award Numbers: 2019G996115, 2020G996115
Federal Award Year: 2019, 2020
U.S. Department of Health and Human Services
Compliance Requirement: Reporting
Special Tests and Provisions: Penalty for Failure to Comply with Work
Verification Plan
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2019-017
Statistically Valid Sample: No
Criteria
The State agency must maintain adequate documentation, verification, and internal control procedures to
ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in
place procedures to (a) determine whether its work activities may count for participation rate purposes;
(b) determine how to count and verify reported hours of work; (c) identify who is a work eligible
individual; and (d) control internal data transmission and accuracy. Each State agency must comply with
its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the
State by an amount not less than one percent and not more than five percent of the SFAG for violation of
this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64,
and 261.65).
ACF-199, TANF Data Report (OMB No. 0970-0338) and ACF-343, Tribal TANF Data Report (OMB
No. 0970-0215) (65 FR 8545, Appendix A, February 18, 2000) - State agencies must meet or exceed
their minimum annual work participation rates. The minimum work participation rates are 50 percent for
the overall rate and 90 percent for the two-parent rate. A state’s minimum work participation rate may
be reduced by its caseload reduction credit. HHS may penalize the state by an amount of up to 21
percent of the SFAG for violation of this provision (42 USC 609(a)(4); 45 CFR section 262.1(a)(4)).
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition
During our testwork related to compliance with the New Hampshire Department of Human Services (the
Department) work verification plan we noted the following:
A. For 1 of 40 participants selected for testwork, the documentation used to support the hours worked for
the participant did not agree to the New Heights system and as a result, the hours for the participant
were under reported.
B. For 1 of 40 participants selected for testwork, the participant did not have an active employment plan
for the period selected for testwork. In addition, the hours reported worked for the participant were
G-19
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
based on outdated employment information and did not represent the actual hours worked by the
participant. As a result, we were unable to verify if the participant complied with their work
verification plan or if the hours reported worked were accurate.
C. For 1 of 40 participants selected for testwork, there was insufficient documentation to support the
number of hours worked within the New Heights system for the participant.
D. For 1 of 40 participants selected for testwork, the participant was enrolled in multiple activities which
were supported with work logs of hours worked. However, per review of the New Heights system,
only part of the participant’s hours were reported.
Cause
The cause of the condition found was a result of inadequate review controls in place to ensure sufficient
documentation is maintained to support the number of work hours reported by participants and that the
hours worked are accurately reported within the New Heights system. The inaccurate reporting also
impacted the accuracy of the data submitted within the ACF-199 TANF Data Report.
Effect
The effect of the condition found is that the State may not be in compliance with its work verification plan
and would not be able to identify the noncompliance and related reporting errors within the ACF-199
TANF Data report timely.
Questioned Costs
None.
Recommendation
We recommend that the Department enhance its existing controls and procedures to ensure the
documentation used to support participant work hours is maintained, that the hours reported agree to the
documented hours worked and that the work hours are accurately reflected within the New Heights system
so that they are ultimately accurately reported on the ACF-199 TANF Data Report.
View of Responsible Officials
While that the Department concurs with most of the errors included in the findings, we do not concur with
all of them. See below for details.
A. We concur. There were unreported hours in a job readiness activity when the verification was
entered into the New Heights verification screen.
B. We concur. The Department agrees that there is not a current Employment plan for the period of
April 2020. While an Employment Plan was mailed to the participant, it was not returned to the
Department. The Department also agrees that the hours reported worked for the participant was
based on outdated employment information and did not represent the actual hours worked by the
participant.
C. We concur. The Department agrees that one of the participants had insufficient documentation to
support the number of hours worked.
D. We concur with this error. The Department agrees that the number of participant’s hours reported
were not correct.
G-20
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
To address these issues, an audit training power point presentation was created for an all staff
training event which was held on March 19, 2021.
Anticipated Completion Date
March 19, 2021
Contact Person
Kim Runion, Bureau Chief of Employment Services
Status as of Opinion Date
Although unresolved at June 30, 2021, as a similar finding was identified in the 2021 single audit report;
see finding and views of responsible officials at 2021-025. The department has since held an all-day
training on September 16, 2021 and discussed the State of NH Work Verification Plan to staff.
In addition, the unit now has a Training Coordinator who schedules and provides all training to a new
Employment Counselor either in person or via video conference. The Training Coordinator also develops
specialized trainings as well as review trainings on an as needed basis – this would be for new initiatives,
pilots, changes to policy/protocol, etc.
The Unit also has hired a Quality Assurance (QA) Specialist. The Quality Assurance Specialist meets
face to face with each new employee 30 days after the completion of training. This meeting will be to
facilitate an introduction, answer questions, provide technical assistance training and provide support. The
QA Specialist will provide the new employee with the 90-day technical assistance tool. The Quality
Assurance Specialist will conduct a 90-day technical assistance review – the QA Specialist will review a
maximum of 10 cases via a desk review and complete a report on those 10 cases. Once this report is
complete, the Quality Assurance Specialist will share and discuss the results with the new employee at a
face-to-face technical assistance meeting. During the meeting, The QA Specialist and the employee
review remaining cases (above the 10 reviewed prior to the meeting) together. The QA Specialist
continues to be a support to that person through their first year of employment.
G-21
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-016
NH Department of Health and Human Services
Temporary Assistance for Needy Families (93.558)
Federal Award Numbers: 2019G996115, 2020G996115
Federal Award Year: 2019, 2020
U.S. Department of Health and Human Services
Compliance Requirement: Matching, Level of Effort and Earmarking – Maintenance of Effort
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Every fiscal year, a State must maintain an amount of “qualified state expenditures” (as defined in 42
US609(a)(7)(B) and 45 CFR section 263.2) for eligible families (as defined in 42 USC
609(a)(7)(B)(i)(IV) and 45 CFR section 263.2(b)) at least at the applicable percentage of the State’s
historic State expenditures. Qualified expenditures with respect to eligible families may come from all
programs. This requirement may be met through allowable state or local cash expenditures for goods and
services, cash donations by non-governmental third parties, or the value of third-party in-kind
contributions. A State’s records must show that all costs are verifiable and meet all applicable
requirements in 45 CFR sections 263.2 through 263.6.45 CFR 75 303(a) states the non-Federal entity
must establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award.
Condition
For the federal fiscal year end September 30, 2019, the New Hampshire Department of Health and
Human Services (the Department) is required to meet an annual maintenance of effort (MOE)
requirement of $32,115,003. In total, the Department incurred $38,813,585 in eligible MOE expenditures,
which exceeded the amount required. Of the MOE expenditures incurred, $11,627,710 represented in-
kind contributions from 15 community organizations. On an annual basis, each community organization
completes a TANF MOE form to report expenses that qualify as TANF expenditures. The form requires a
description of the program operations, what TANF purpose the program addresses, the number of
families served, and the amount of eligible expenditures in total. The form is signed by the organization
and submitted to the Department to serve as the supporting documentation for the in-kind contribution
provided by the community organization. No additional documentation is provided by the community
organization to support the amount of the expenditures included on the form. The Department does not
perform procedures to ensure expenditures reported by the community organization are accurate and
represent valid expenditures that were incurred to support the program outlined within the form and in
turn to ensure the in-kind contribution used to support the required MOE is appropriate.
G-22
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Cause
The cause of the condition found was a result of insufficient controls and procedures to ensure the
expenditures reported by the community organization are properly supported by valid expenditures that
meet the criteria of qualified TANF expenditures. As the Department enters into a memorandum of
understanding (MOU) with each community organization that outlines the types of costs that are
allowable sources of MOE and obtains a signed certification from each organization as to the amount of
expenditures incurred, the Department indicated that the support provided is sufficient and therefore does
not validate the information for accuracy.
Effect
The effect of the condition found is that the Department may not meet the required annual MOE
requirement as in-kind contributions may not be complete or represent qualified expenditures does not
have controls and procedures in place to identify the noncompliance timely.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department implement controls and procedures to ensure that in-kind
contributions used to support MOE are reviewed to ensure that the expenditures are accurate and meet the
definition of qualifying expenditures.
View of Responsible Officials
We do not concur. The expenditures outlined are considered verifiable costs via the Memorandum of
Understanding (MOU) and the Maintenance of Effort (MOE) forms completed by the third party agency.
As part of the June 30, 2018 audit a similar finding is noted which we also did not concur with as part of
that audit. As of May 2021, the Federal Administration for Children and Families (ACF) has not
rendered a decision yet concerning this finding and as such, we do not believe any corrective action is
required.
Anticipated Completion Date
No corrective action is considered necessary
Rejoinder
The Department stated in their response that it verifies the completeness and accuracy of the third-party
in-kind match through the MOU entered into and the MOE forms that the providers submit. Per review of
the signed certifications (or the MOE forms), we noted the certification contains a description of the
general purpose of the program, an identification of the TANF purpose the program addresses, the
number of families/individuals served, the expenses incurred under the program, excluding any federal
and state funds received. While we were provided with documentation to support that the third party
certifications were received, we were not provided with evidence to support the Department had
performed additional procedures to verify the incurred costs were complete and accurate as required by
45 CFR section 263.2(e) and 75.306. We do not agree that a certification alone from a third party meets
the definition of a verifiable cost from third -party records.
G-23
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Status as of Opinion Date
Unresolved. A similar finding was identified in the 2021 single audit report; see finding and views of
responsible officials at 2021-024. The department is awaiting a review decision from the Federal
Administration for Children and Families (ACF).
G-24
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-018
NH Department of Health and Human Services
Foster Care – Title IV-E (93.658)
Federal Award Numbers: 2001NHFOST
Federal Award Year: 2020
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Title IV-E agencies establish payment rates for maintenance payments (e.g., payments to foster parents,
childcare institutions or directly to youth).Payment rates may also be established for Title IV-E
administrative expenditures (e.g., payments to child placement agencies or other contractors, which may
be either subrecipients or vendors) and for other services. Payment rates must provide for proper
allocation of costs between foster care maintenance payments, administrative expenditures, and other
services in conformance with the cost principles. The Title IV-E agency’s plan approved by ACF must
provide for periodic review of payment rates for foster care maintenance payments at reasonable,
specific, time-limited periods established by the Title IV-E agency to assure the rate’s continuing
appropriateness for the administration of the Title IV-E program (42 USC 671(a)(11); 45 CFR section
1356.21(m)(1); 45 CFR section 1356.60(a)(1) and (c)).
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
During our testwork over the payment rate setting and application process, the Department for Health and
Human Services (the Department) did not appear to have a periodic schedule to review and determine the
continued appropriateness of amounts paid as foster care maintenance rates. It did not appear that foster
care maintenance rates had been reviewed since 2017.
Cause
The cause of the condition found was primarily due to insufficient controls and lack of written
documentation to support the process for reviewing foster care maintenance rates and a lack of a
documented schedule for when the maintenance rates would be reviewed.
Effect
The effect of the condition found is that the Department’s maintenance rates that are utilized for the Foster
Care program may not be appropriate.
Questioned Costs
Not determinable.
G-25
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Recommendation
We recommend that the Department develop policies, procedures and relevant internal controls to ensure
that foster care maintenance rates are periodically reviewed to determine their continued appropriateness.
The policy should also outline the frequency of when maintenance rates will be reviewed.
View of Responsible Officials
The Department concurs. Previously, rate setting was the responsibility of individual divisions before
moving to a centralized function. Due to that transition, new procedures need to be created and
implemented to ensure rates are reviewed regularly based on state and federal requirements.
Procedures have been drafted by the Department’s Rate Setting Unit which is responsible for initiating
the review of rates. The rate review process is to begin in the first quarter of each calendar year.
Foster Care and Residential Treatment Facility rate review responsibilities are a combined effort with the
Rate Setting Unit, DCYF Finance, and the Division’s Certification teams.
Anticipated Completion Date
October 31, 2021
Contact Person
Christy Roy, Administrator III
Status as of Opinion Date
Although unresolved at June 30, 2021, as a similar finding was identified in the 2021 single audit report;
see finding and views of responsible officials at 2021-031. The Department has since instituted
procedures drafted by the Department’s Rate Setting Unit, which is responsible for initiating the review of
rates. The rate review process is to begin in the first quarter of each calendar year. The Foster Care and
Residential Treatment Facility rate review responsibilities are a combined effort with the Rate Setting
Unit, DCYF Finance, and the Division’s Certification teams. In addition, an annual Foster Care Review
is completed to show a comparison of NH’s rates versus the surrounding New England states.
G-26
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-019
NH Department of Health and Human Services
Social Services Block Grant (93.667)
Federal Award Numbers: 2017G992342, 2018G992342, 2019G992342
Federal Award Year: 2017, 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2019-019
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.331(a);
2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and
3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required
through the terms and conditions of the award, subaward monitoring must include 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 other means.
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
As part of the Social Services Block Grant program, the New Hampshire Department of Health and
Human Services (the Department) enters into grant agreements with local entities to provide a variety of
services, including meals, adult day services and comprehensive family services. On a periodic basis, the
subrecipient submits a request for reimbursement for the services that are rendered that is reviewed and
approved by the Department prior to payment. As part of our testwork over the subrecipient monitoring
process, we noted the following for the year ended June 30, 2020:
A. The Department communicates award information to subrecipients through the approved
contract. Per review of the contract, for all 10 subrecipients selected for testwork, the Department
did not communicate all the required award information as outlined in 2 CFR section 200.331(a).
Specifically, the following elements were not communicated:
G-27
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
a. Federal Award Identification Number (FAIN);
b. Federal award date;
c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2
CFR section 200.414); and
d. Identification of whether the award is R&D.
B. The Department did not perform a risk assessment for each of the 10 subrecipients selected for
testwork. As a result, it was unclear as to what type of during the award monitoring was required
to be performed over the 10 subrecipients selected for testwork.
C. The Department’s during the award monitoring is primarily composed of the Department’s
review over requests for reimbursement submitted by the subrecipient. The Department reviews
the invoices prior to payment indicating that the invoice appears reasonable and allowable under
federal regulations. For each of the 10 subrecipients selected for testwork, the Department was
unable to provide documentation to support that it had performed additional monitoring
procedures over the subrecipients to address whether or not the subrecipient had sufficient
documentation to support that the costs requested for reimbursement were allowable or whether
the subrecipient had determined participant eligibility accurately if eligibility requirements were
applicable. As the Department does not have a formal subrecipient monitoring policy that
outlines the types and frequency of monitoring activities to be performed and there was no risk
assessment performed for these subrecipients, it was unclear whether the exclusion of these types
of monitoring activities was appropriate.
Cause
The cause of the condition found was primarily due to the following:
• The Department is in the process of modifying its subrecipient grant agreements in response to a
corrective action plan that is being implemented as a result of a similar finding identified in the prior
year. As new grant agreements are executed, the required information will be communicated to
subrecipients. The 10 grant agreements reviewed as part of our testwork were not newly executed
agreements as the subrecipient grant expenditures incurred during the audit period were associated with
amendments on existing agreements. The changes being implemented on new subrecipient agreements
are not being made to amendments to existing agreements.
• The Department requires a risk assessment to be performed prior to entering into a subrecipient grant
agreement. For each of the 10 subrecipient selected for testwork, the grant agreements were entered
into prior to the date in which the Department’s risk assessment policy went into effect in June of 2018.
The Department has made some changes to its risk assessments process; however, those changes did
not go into effect until State fiscal year 2021.
• The Department currently does not have a documented subrecipient monitoring policy that outlines the
types and frequency of monitoring procedures that will be performed over this federal program and how
those monitoring procedures will be documented.
G-28
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a), 2
CFR section 200.331(b) and 2 CFR sections 200.331(d) through (f). In addition, as there is no
documented subrecipient monitoring policy for this program, fiscal and programmatic monitoring
requirements that the subrecipient is required to comply with may not be appropriately or timely monitored
for compliance by the Department, resulting in potential unallowable costs being charged to the program.
Questioned Costs
Not determinable.
Recommendation
We recommend that the Department continue to review its existing policies and procedures to ensure that
the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and
2 CFR sections 200.331(d) through (f). This would include ensuring that:
1. All required award information is communicated to subrecipients;
2. A documented risk assessment is performed over all subrecipients and the results of that risk
assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient; and
3. As a result of the risk assessment performed, monitoring activities are performed over
subrecipients to ensure compliance with the terms and conditions of its subrecipient grant
agreement. The procedures that are to be performed based upon the assessed level for of risk
should be outlined in a documented subrecipient monitoring policy that is specific to this
program. The subrecipient monitoring policy should document the types and frequency of
monitoring activities that will be performed.
View of Responsible Officials
A. We concur the Department did not communicate award information to subrecipients through the
approved contract as required by 2 CFR 200.331 (a). The remedy has already been implemented.
a. Federal Award Identification Number (FAIN) – In November 2019, the Department
added the FAIN number to the letter for the Governor and Council requesting approval.
Further, the FAIN number was also added to Exhibit C of the Department’s contracts in
February 2020.
b. Federal award date – The Federal Award Date was added to Exhibit C of the
Department’s contracts.
c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2
CFR section 200.414) – Indirect cost rates were added to Exhibit C of the Department’s
contracts in April 2020.
d. Identification of whether the award is R&D – R&D identification was added to Exhibit C
of the Department’s contracts in February 2020.
B. and C. We concur with the finding. We consider the finding to be fully resolved through
Department policy and Department wide implementation. However, it should be noted full
compliance will not be achieved for one to two contact cycles due to timing.
G-29
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
The Department began addressing the issue of Subrecipient Monitoring issue in June 2017 when
the first Grants Administrator was hired.
The Department finalized the Subrecipient Monitoring Policy, which encompasses the financial
and programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The
Department provided user training on the subject in February and September 2018, training over
one hundred forty-six staff. However, only brand new procurements utilized this policy during
the initial roll out of this policy.
The Department hired a new Grants Administrator in May 2019. The full Subrecipient
Monitoring policy rolled out to all procurements, including sole source, amendments, and
renewals, effective August 1, 2020. The Contracts Unit received specialized subrecipient
monitoring training on May 13 and October 28, 2020. Department wide training to all staff
occurred weekly between September 8 and November 3, 2020. The Grants Office provided
additional targeted training to Program staff through team meetings. Over one hundred fifty
Program and Finance staff received training. Annual training will be held in September each
year. Refresher training or training for new staff is available upon request from the Grants
Office.
Additionally, the Grants Office website launched in June 2020, which offers Program, Finance,
and Contracts Unit staff access to the all the Grants Office policies, including the subrecipient
monitoring policy, as well as training modules, slides, and tools. The training has also been
recorded and is available on this site.
The Subrecipient Monitoring Policy requires Program to determine whether any vendor which
receives funds in exchange for goods or services is a Contractor or Subrecipient. Determined
subrecipients receive an Appendix B, which includes an eighteen question questionnaire and
requirements for submitting financial data. This information is used to populate the Risk
Assessment Tool, which shows any risks pertinent to a subrecipient and the subaward. Based on
the risks shown, Program chooses monitoring activities to mitigate the risks and the Contracts
Unit memorializes these choices in the contract.
The Grants Office works closely with the Contracts Unit to ensure compliance with the
Subrecipient Monitoring policy.
Anticipated Completion Date
A. Completed.
B. Policy implementation complete.
C. Policy implementation complete.
Contact Person
Melissa Kelleher, Grants Administrator
Status as of Opinion Date
Partially resolved. A review of the SSBG contracts for FY21 shows that all the contracts subject to the
implementation timeframe for the Subrecipient monitoring policy have been evaluated for risk as required
or fell under the exceptions of the Exigent Circumstances policy due to the COVID 19 pandemic.
G-30
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
In addition, a review of the SSBG contracts thus far for FY22 shows that contracts subject to the
implementation timeframe for the Subrecipient monitoring policy were evaluated for risk as required,
with the exception of one award to six subrecipients that did not go through this policy as required during
the early weeks of the rollout of this policy. The anticipated end of the current contract cycle is Fiscal
Year end June 30, 2023, therefore the anticipated completion date is September 30, 2023.
G-31
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-022
NH Department of Health and Human Services
Medicaid Cluster (93.775, 93.777, 93,778)
Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM,
1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP
Federal Award Years: 2018, 2019, 2020
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and
Enrollment)
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: 2019-021
Statistically Valid Sample: No
Criteria
In order to receive Medicaid payments, providers must: (1) be licensed in accordance with Federal, State,
and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and
447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and
enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make
certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid
managed care network providers are subject to the same disclosure, screening, enrollment, and
termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR
Part 438, Subpart H.
Per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal
awards that provide reasonable assurance that the non-federal entity is managing the federal award in
compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition
The Department assigns risks to each provider based on their provider type. All new provider enrollments
and moderate and high-risk revalidations are reviewed and approved by the Department of Health and
Human Services (the Department). However, for limited risk revalidations, the Department has
outsourced this service to the Department’s Medicaid Management Information System fiscal agent
(Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues
noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal
Agent to perform a quality assurance review over all new provider and revalidations prior to the
notification that they are an eligible provider for State of New Hampshire services to address the accuracy
of enrollment. During 2019, the Department modified their process such that the Fiscal Agency received
all results from the vendor screenings for revalidations.
During our testwork over the above monitoring controls, the Department provided minutes of the
meetings that demonstrated review of enrollment and revalidation processes and discussion of resulting
trends and efficiencies on a consistent basis. The feedback from the Fiscal Agent regarding the quality
assurance process is less formalized and more ad-hoc in nature not allowing for audit evidence throughout
the fiscal year of the accuracy and operating effectiveness of the monitoring controls.
G-32
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
During our testwork over provider eligibility, we noted for 7 of 65 providers, there was greater than six
years between the Department revalidating the providers eligibility. COVID-19 waivers extended prior
authorizations for 12 months. However, as these providers were not revalidated in six years, there
appears to have been an issue with compliance with the revalidation process prior to COVID-19.
Cause
With regard to the monitoring controls, the condition noted is due to lack of a formalized process to
receive information on a regular basis from the Fiscal Agent resulting in the control not being effectively
designed. The main cause for the delay in revalidation was funding priorities to start the project and the
length of time it took to implement the project which included proper notification to providers of the
requirement.
Effect
The effect of the condition found is that the Department does not revalidate providers timely.
Questioned Costs
None.
Recommendation
We recommend the Department implement monitoring and communication controls to continually assess
the need for provider revalidation to ensure that it is executed timely and in accordance with the
requirements, including a plan to become current on older reviews.
View of Responsible Officials
DHHS knew that we were behind in establishing the system processes for revalidation. DHHS
established a team of DHHS staff, MMIS, DoIT staff and fiscal agent staff to establish a project plan and
implementation of the revalidation process. This required system updates, new provider revalidation
application, provider notification, and how to handle revalidations that were past due. DHHS approved
all decision regarding this project. DHHS also reached out to CMS for technical assistance to perform
revalidations including the electronic data exchange of duel providers that are enrolled with Medicare and
Medicaid to expect the revalidation screening process, which allowed DHHS to screen thousands of
providers quickly and efficiently expediting the process. DHHS and the fiscal agent are actively
performing revalidation monthly and the process is being reviewed and updated as needed to ensure all
revalidations are done correctly and timely. As such, starting in July 2019, revalidations are reviewed and
approved by the Department which includes a DEX lookup for each provider and the Fiscal Agent
changed the screening reporting with their vendor to send all screening results to the Fiscal Agent, not just
the negative results. The Fiscal Agent does not approve the revalidation until all screenings are complete,
including the Department review and properly documented in the provider’s electronic case file. All
older reviews have been processed and notices have been sent. However, based on the restrictions on
revalidation and enrollment due to COVID, we will not be able to terminate any providers for not
completing revalidation until the emergency has ended. During this time, DHHS receives a Work List
Report of providers selected for revalidation that have not submitted their revalidation application.
DHHS is diligently reaching out to these providers to obtain revalidation applications and documentation
to reduce the number of outstanding revalidations during COVID. DHHS and the Fiscal Agent has also
established a plan to address non-compliant revalidations once the emergency period has ended.
G-33
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
DHHS will ensure current procedures cover all required regulations for provider enrollment. DHHS will
establish with the Fiscal Agent, quarterly reporting of the Fiscal Agent’s Quality Assurance unit to
monitor errors and trends for correction.
Anticipated Completion Date
Outstanding revalidations and process changes will be completed within 6 months of the end of the
Federal Emergency Order (EO) as required under the EO
Contact Person
Francessca Hennessy
Status as of Opinion Date
Although unresolved at June 30, 2021, as a similar finding was identified in the 2021 single audit report;
see finding and views of responsible officials at 2021-034. The Department has since begun the
implementation of the corrective action noting the Federal Emergency Order is still currently in effect and
noting outstanding revalidations and process changes require completion within 6 months of the end of
the Federal Emergency Order (EO) per the EO itself.
G-34
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-023
NH Department of Health and Human Services
Medicaid Cluster (93.775, 93.777, 93,778)
Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM,
1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP
Federal Award Years: 2018, 2019, 2020
U.S. Department of Health and Human Services
Compliance Requirement: Eligibility
Type of Finding: Significant Deficiency and Material Noncompliance
Prior Year Finding: 2019-022
Statistically Valid Sample: No
Criteria
Eligibility for Medicaid can be broadly grouped into determinations based on Modified Adjusted Gross
Income (MAGI-based determination) and non-MAGI determinations (e.g. Aged, Blind and Disabled).
Auditors should test eligibility determinations made for fee-for-service and managed care beneficiaries.
The auditors should re-determine eligibility to ensure beneficiaries qualify for the Medicaid program and
are in the appropriate enrollment category.
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition
The Division of Medicaid Services (DMS), with the Department of Health and Human Services (the
Department) administers the Medicaid program. The Bureau of Family Assistance (BFA) is responsible
for determining eligibility for non-MAGI groups as well as MAGI groups according to New Hampshire
policy.
One hundred sixty MAGI and non-MAGI participants were selected for review, who fell into four main
eligibility types: fee for service, managed care, waiver, and nursing home. During the audit, for 64 of 160
participants, (7 of 40 for fee for service, 7 of 40 for MCO, 12 of 40 waiver and 38 of 40 nursing home)
the Department was unable to provide support to verify that the participants social security income had
been matched, via a Bendex match, with the Social Security Administration (SSA) because the SSA has
not provided New Hampshire authorization to share that information. Therefore, validation that the
participants were deemed eligible by the SSA was not able to be determined.
Cause
The cause of the condition is that the SSA has not issued a Redisclosure Memorandum for the CMS Single
Audit. Without the Memorandum, states do not have permission to disclose SSA data to any auditors.
G-35
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Effect
The Department could be providing Medicaid benefits to participants who may be ineligible for the
program.
Questioned Costs
Not determinable.
Recommendation
The Department should obtain approval from SSA to share data with the single auditor or work with SSA
to provide correspondence to the single auditor confirming eligibility for individuals during the audit
process.
View of Responsible Officials
We concur. We are in the process of updating the Informational Exchange Agreement (IEA) between the
Social Security Administration (SSA) and the New Hampshire Department of Health and Human
Services (DHHS). This will include obtaining authorization for KPMG, as a contractor, to receive access
to the necessary data to complete the Single Audit of the department.
Anticipated Completion Date
Approval of Updated IEA
Contact Person
Elizabeth Gillett
Status as of Opinion Date
Although unresolved at June 30, 2021, as a similar finding was identified in the 2021 single audit report;
see finding and views of responsible officials at 2021-033. The Department has written a letter to the
Social Security Administration (SSA) requesting a re-disclosure letter, which the Department’s
Commissioner will sign once received. The Department is still awaiting a response from SSA.
G-36
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2020-024
NH Department of Health and Human Services
Medicaid Cluster (93.775, 93.777, 93,778)
Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 2005NH5MAP, 1805NH5ADM,
1905NH5ADM, 2005NH5ADM, 1805NHIMPL, 1905NHIMP, 2005NHIMP
Federal Award Years: 2018, 2019, 2020
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provision: Medicaid National Correct Coding
Initiative
Type of Finding: Material Weakness and Scope Limitation
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
In accordance with Section 1903(r) of the Social Security Act, effective October 1, 2010, SMAs were
required to incorporate NCCI methodologies into the state Medicaid programs pursuant to the
requirements of Section 6507 of the Affordable Care Act.
In paying applicable Medicaid claims, states’ MES are required to completely and correctly implement
the following six Medicaid NCCI methodologies to ensure that only proper payments of procedures are
reimbursed.
a. NCCI Procedure-to-Procedure (PTP) edits for practitioner and ambulatory surgical center (ASC)
claims.
b. NCCI PTP edits for outpatient hospital services, including emergency department, observation
care, and outpatient hospital laboratory services.
c. Medically Unlikely Edit (MUE) units of service (UOS) edits for practitioner and ASC services.
d. MUE UOS edits for outpatient hospital services including emergency department, observation
care, and outpatient hospital laboratory services.
e. MUE UOS edits for durable medical equipment (DME) billed by providers.
f. NCCI PTP edits for durable medical equipment (added in October 2012).
States are also required to use:
• all four components of each Medicaid NCCI methodology;
• the most recent quarterly Medicaid NCCI edit files for states;
• the Medicaid NCCI edits in effect for the date of service on the claim line or claim;
• the claim-adjudication rules in the Medicaid NCCI methodologies; and
G-37
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
• all modifiers for Healthcare Common Procedure Coding System (HCPCS) codes and Current
Procedural Terminology (CPT) codes needed for the correct adjudication of applicable Medicaid
claims.
The NCCI Medicaid Policy Manual and the NCCI Medicaid Technical Guidance Manual contain
additional requirements for implementation of the NCCI methodologies.
The Medicaid NCCI methodologies must be applied to Medicaid fee-for-service claims submitted with,
and reimbursed on the basis of, HCPCS codes and CPT codes. This includes claims reimbursed on a fee-
for-service basis in state Medicaid Primary Care Case Management managed care programs. Application
of NCCI methodologies to fee-for-service claims processed by other entities, including limited benefit
plans or Managed Care Organizations, is not required; however, if SMAs require the application of NCCI
methodologies to fee-for-service claims processed by such entities, then such entities must meet NCCI
program requirements, including compliance with the NCCI Medicaid Policy Manual and the NCCI
Medicaid Technical Guidance Manual.
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition
Per the Department of Health and Human Services (the Department), the edits required by the above
criteria reside in the Medicaid Management Information System (MMIS) and are activated based on
responses sent back to MMIS from Cotiviti, a third-party vendor. MMIS is managed by Conduent.
Conduent has a SOC1 report prepared to report on the fairness of the presentation of management’s
description of the service organization’s system and the suitability of the design of the controls to achieve
the related control objectives included in the description as of a specified date. The Conduent SOC1
report for the period July 1, 2019 to June 30, 2020 did not include consideration of the NCCI process with
Cotiviti and the related NCCI edits within MMIS. Based on this, there is no ability to validate the NCCI
process as the control environment and control objectives were not included the SOC report.
Cause
The cause of the condition found was primarily due to the Departments lack of recognizing and notifying
Conduent of the requirement to test the automatic MMIS NCCI edits within the SOC1 report.
Effect
The six required Medicaid NCCI methodologies to ensure that only proper payments of procedures are
reimbursed may not be completely and correctly implemented by the Department.
Questioned Costs
None.
Recommendation
We recommend for the Conduent SOC1 report for the period July 1, 2020 to June 30, 2021, the
Department implement a process to ensure the auditor of MMIS tests the automatic NCCI edits for the
suitability of the design of the controls to achieve the related control objectives and properly includes any
additional general control environment.
G-38
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
View of Responsible Officials
We concur. Conduent will update the narrative within the SOC 1 document for Claims Processing
Control Objective 5 to include NCCI editing from SOC1 2021 audit (audit period July 1, 2020 to June 30,
2021) onwards. The auditing firm will update the objective tracker to include a sample selection of claims
that would have NCCI edits on them. The SOC1 report will be provided to the State.
Anticipated Completion Date
Completion of the FY2021 SOC audit.
Contact Person
Ken Gagne, MMIS Technology Manager
Status as of Opinion Date
Although unresolved at June 30, 2021, as a similar finding was identified in the 2021 single audit report;
see finding and views of responsible officials at 2021-035. Conduent has since updated the narrative
within the SOC 1 document for Claims Processing Control Objective 5 to include NCCI editing from
SOC1 2021 audit (audit period July 1, 2020 to June 30, 2021) onwards. The auditing firm will need to
update the objective tracker to include a sample selection of claims that would have NCCI edits on them.
The Department has provided the State with a copy of the FY21SOC 1 report, which contains the NCCI
Information
G-39
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-005
NH Department of Justice
Crime Victim Assistance (16.575)
Federal Award Numbers: 2015-VA-GX-0007, 2016-VA-GX-0061, 2017-VA-GX-0044
Federal Award Year: 2014, 2015, 2016
U.S. Department of Justice
Compliance Requirement: Reporting
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Federal Financial Report (FFR) (SF-425/SF-425A (OMB No. 0348-0061)). Recipients use the FFR as a
standardized format to report expenditures under Federal awards, as well as, when applicable, cash status
(Lines 10.a, 10.b, and 10c). References to this report include its applicability as both an expenditure and a
cash status report unless otherwise indicated. Electronic versions of the standard forms are located on
agency’s home page.
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
During our testwork over the federal reporting process, we were unable to agree the current period
expenditures reported to external supporting documentation for 5 reports selected for testwork. The
Department prepares the federal report using internally prepared spreadsheets, referred to as VOCA
spreadsheets. The Department continuously updates these spreadsheets and does not save the version that
was used to prepare the FFR. In addition, the Department does not perform a formal reconciliation
between the VOCA spreadsheets and the State of New Hampshire’s centralized accounting system,
NHFirst. As such, we were unable to agree the amounts on the FFR to the underlying supporting records.
As a result, we were unable to verify whether or not the federal reports filed were complete and accurate
Cause
The cause of the condition found was primarily due to the lack of internal controls and procedures in
place to ensure documentation to support the FFR, as filed, is maintained by the Department and that the
internal spreadsheets used to prepare the FFR is reconciled to NHFirst.
Effect
The effect of the condition found is that the Department may not have filed accurate federal reports.
Questioned Costs
Not determinable
Recommendation
G-40
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
We recommend the Department review its existing policies and procedures to implement policies and
controls to ensure it complies with the federal financial reporting requirements. These procedures should
include that for each FFR filed, the Department maintains accounting records which support the amounts
reported. We also recommend that the Department take steps to ensure the records maintained internally
agree to the State’s accounting system of record, NHFirst.
View of Responsible Officials
The DOJ concurs with this Finding. The Federal Financial Reports filed at the time with the US
Department of Justice were correct. However, subsequent adjustments and reconciliations to the awards
ultimately indicted previous reporting to be incorrect. Each FFR filed with US DOJ indicates that the FFR
is “updated” and that the cumulative numbers are accurate. The FFR website does not allow data entry
into the cumulative numbers section, only the reporting period. This causes data entry to be skewed to
report numbers to match the cumulative amounts. This information was provided to the auditors during
the audit. Due to systemic improvements in the accounting and reconciliation of federal programs, this
should no longer be an issue going forward. VOCA Spreadsheets utilized to report the FFR are now being
kept as historical back up information to the FFR.
Expenditures reported into the VOCA tracking spreadsheets are now entered into the spreadsheet only
after posting into the State’s system of record, NHFirst, by the Grants Management Unit accountant. This
was a system that was not in place at the beginning of the audit period.
Anticipated Completion Date
Completed
Contact Person
Thomas Kaempfer, Interim Director of Administration
Tanya Pitman, VOCA Grant Administrator
Anne Edwards, Associate Attorney General
Status as of Opinion Date
Although partially resolved at June 30, 2021, the Department has since received formal correspondence
from the Office of Justice Programs, Office of Audit, Assessment, and Management dated March 30,
2022 indicating, based on their review of corrective actions taken, no further action is required for
findings issued in the fiscal year ending June 30, 2020 pertaining to the US Department of Justice. Given
the similarities of this finding to 2020-002, the Department considers the status of 2020-002 applicable.
G-41
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-010
NH Department of Education
Career and Technical Education – Basic Grants to States (84.048)
Federal Award Numbers: V048A160029-16B
Federal Award Year: 2017
U.S. Department of Education
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and
2. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.331(d) through (f). This would include ensuring that
subrecipients only used funds for career and technical education activities that supplement,
not supplant, non-federal funds expended to carry out career and technical education activities
and tech-prep activities (Section 311(a) of Perkins IV(20 USC2391(a)).
3. In addition to procedures identified as necessary based on the evaluation of subrecipient risk
or specifically required by the terms and conditions of the award, subaward monitoring must
include following up and ensuring that the subrecipient takes timely and appropriate action on
all deficiencies pertaining to the federal awarded provided to the subrecipient from the pass
through entity detected through audits, on-site reviews, and other means.
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
The New Hampshire Department of Education (the Department) enters into grant agreements with local
educational agencies (subrecipients) to provide funds to develop the career, technical, and academic skills
of secondary and postsecondary schools. As part of our testwork over the subrecipient monitoring
process, we noted the following as of the year ending June 30, 2019:
A. On an annual basis the Department performs a risk assessment rubric to determine which
subrecipients should be subjected to an in-depth programmatic monitoring visit. For 8 of 18
subrecipients selected for testwork, the Department was unable to provide the risk assessment
rubric that was completed as part of the programmatic monitoring process.
G-42
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
B. For all 3 subrecipients selected for testwork, we were unable to identify any monitoring
procedures, either at the time that the grant was awarded or as part of its subrecipient monitoring
process, the Department performed to ensure that subrecipients had used funds to supplement and
not supplant non-federal funds to carry out career and technical education activities.
C. For 2 of 3 programmatic monitoring visits selected for testwork, there was no documentation to
support that the Department had sent a formal letter to the subrecipient outlining the results of the
programmatic monitoring review or whether or not the Department had ensured that corrective
action was taken if required.
Cause
The cause of the condition found was primarily due to the insufficient controls and procedures in place over
the subrecipient monitoring process to ensure that all required programmatic risk assessments are
performed, that supplement not supplant considerations are reviewed as part of the monitoring process and
that letters are issued upon conclusion of programmatic monitoring visits.
Effect
The effect of the condition found is that noncompliance could exist at the subrecipient level and there
would not be controls and procedures in place for the Department to identify the noncompliance timely.
Questioned Costs
None
Recommendation
We recommend that the Department review its existing policies and procedures to ensure that the
Department complies with the provisions 2 CFR section 200.331(b) and 2 CFR section 200.331(d)
through (f). This would include implementing controls and procedures to ensure that:
1. A documented programmatic risk assessment is performed over all subrecipients and the
results of that risk assessment is used to evaluate the types of monitoring procedures that will
be performed over the subrecipient;
2. As part of the subrecipient monitoring process the Department should review compliance with
supplement not supplant requirements; and
3. A formal letter be issued as a result of all programmatic monitoring visits that outlines, if
applicable, all items requiring corrective action and that all items that require corrective action
are followed up on to ensure the matters identified are resolved timely by the subrecipient.
View of Responsible Officials
We concur
1 A documented programmatic risk assessment is performed over all subrecipients and the results of
that risk assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient.
• Bureau of Career Development is in the process of reworking the risk assessment rubric used to
assess risk factors associated with CTE programs funded by Perkins of not meeting performance
goals (Core Indicators of Performance).
G-43
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
• Annual applications for funds forms submitted for Perkins funds granted to eligible CTE
programs will be part of the determination process for targeted monitoring of programs. The
Bureau of Career Development will look closely at costs associated with required uses of Perkins
funds, and as part of monitoring, we will look at such spending in the programs to be monitored.
2 As part of the subrecipient monitoring process the Department reviews compliance with supplement
not supplant requirements
• The annual application for Perkins funds implemented in February 2020, with a due date of May
31, 2020 includes a justification line for each cost. This line includes items about previous
sources of funding, including a question about whether or not the spending is new, was previously
funded by Perkins, or was previously funded from other sources. The answer for these items
gives reviewers of the annual application for funds the opportunity to question the costs, and not
test for supplement, not supplant.
3 A formal letter is issued as a result of all programmatic monitoring
• As part of a new, two-tiered monitoring process the Bureau of Career Development will issue a
monitoring letter to each Perkins subrecipient in April of each year. The letter will include CTE
center-wide (non-Federal) findings, recommendations, and corrective actions, and the results,
including findings, recommendations, and corrective actions for programs selected as part of the
programmatic monitoring (Perkins, Federal).
• Follow up on the letter will take the form of a corrective action plan, developed by the Bureau of
Career Development in collaboration with the CTE director of the center with programs
monitored. This corrective action plan will include steps taken to address compliance issues
identified in the program monitoring letter, along with due dates for completion of activities to
resolve the issues.
Anticipated Completion Date
June 1, 2020
Contact Person
Lindsey Scribner, Agency Audit Manager, Bureau of Federal Compliance
Status as of Opinion Date
Although partially resolved at June 30, 2021, on September 3, 2020, the Department received a program
determination letter (PDL) from USDOE specifying the finding as resolved with the caveat of the auditor
will report on the progress of completion of the corrective action plan. Since no reviews were performed
during fiscal year 2021 KPMG has determined the finding only partially resolved for fiscal year 2021.
G-44
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-011
NH Department of Health and Human Services
Aging Cluster (93.044, 93.045, 93.053)
Federal Award Numbers: 18AANHT3SS, 18AANHT3CM, 18AANHT3HD, 18AANHNSIP,
1901NHOANS
Federal Award Year: 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
1. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.331(a);
2. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and
3. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required
through the terms and conditions of the award, subaward monitoring must include 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 other means.
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
As part of the Aging Cluster, the New Hampshire Department of Health and Human Services (the
Department) enters into grant agreements with local entities to provide congregate and home delivery
meals to program participants. On a monthly basis, the subrecipient submits a request for reimbursement
that is composed of the number of meals served during that month and the subrecipient is reimbursed a set
rate for each meal served. As part of our testwork over the subrecipient monitoring process, we noted the
following as of the year ending June 30, 2019:
A. The Department communicates award information to subrecipients through the approved
contract. Per review of the contract, for all 5 subrecipients selected for testwork, the Department
did not communicate all the required award information as outlined in 2 CFR section 200.331(a).
Specifically the following elements were not communicated:
G-45
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
a. Federal award date
b. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2
CFR section 200.414)
c. Identification of whether the award is research and development (R&D)
B. The Department did not perform a risk assessment for each of the 5 subrecipients selected for
testwork. As a result, it was unclear what type of during the award monitoring was required to be
performed over the 5 subrecipients selected for testwork.
C. The Department’s during the award monitoring is primarily composed of the Department’s
review process over monthly invoices submitted for reimbursement by the subrecipient. The
Department reviews the invoices prior to payment indicating that the invoice appears reasonable
and allowable under federal regulations. In addition, the Department also reviews meal count
trends for each subrecipient to look for trends in number of meals provided. While this review is
performed at the invoice level, for each of the 5 subrecipients selected for testwork, the
Department was unable to provide any documentation to support that it had performed any
monitoring procedures to ensure that the actual meal count information submitted by the
subrecipient is accurate and that there is sufficient documentation maintained by the subrecipient
to support the meals served. As the Department does not have a formal subrecipient monitoring
policy that outlines the types and frequency of monitoring activities to be performed and there
was no risk assessment performed for these subrecipients, it was unclear whether or not the
exclusion of these types of monitoring activities was appropriate.
Cause
The cause of the condition found was primarily due to the following:
• Insufficient controls and procedures to ensure that all required federal award information has been
communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and
is not R&D, the Department was unaware that it was required to formally communicate that these items
are not applicable to the federal award.
• The Department requires a risk assessment to be performed prior to entering into a subrecipient contact.
For each of the 5 subrecipient selected for testwork, the contracts were 5 years old and were entered
into before the Department’s risk assessment policy was implemented. The original contracts reviewed
as part of our audit were for a 3 year period with 2 one year renewal options exercised. The
Department’s risk assessment policy went into effect in June of 2018 and as a result, these existing
agreements are not subject to the provisions of the risk assessment policy.
• The Department currently does not have a documented subrecipient monitoring policy that outlines the
types and frequency of monitoring procedures that will be performed over this federal program and how
those monitoring procedures will be documented.
G-46
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a)
and 2 CFR section 200.331(b). In addition, as there is no documented subrecipient monitoring policy for
this program, fiscal and programmatic monitoring requirements that the subrecipient is required to comply
with may not be appropriately or timely monitored for compliance by the Department, resulting in
potential unallowable costs being charged to the program.
Questioned Costs
None
Recommendation
We recommend that the Department continue to review its existing policies and procedures to ensure that
the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and
2 CFR section 200.251. This would include implementing controls and procedures to ensure that:
1. All required award information is communicated to subrecipients;
2. A documented risk assessment is performed over all subrecipients and the results of that risk
assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient; and
3. As a result of the risk assessment performed, monitoring activities are performed over
subrecipients to ensure compliance with the terms and conditions of its subrecipient grant
agreement. The procedures that are to be performed based upon the assessed level for of risk
should be outlined in a documented subrecipient monitoring policy that is specific to this
program. The subrecipient monitoring policy should document the types and frequency of
monitoring activities that will be performed.
View of Responsible Officials
We partially concur with the findings.
1. The Department has developed an exhibit to address the required notification under 2 CFR
200.331. This exhibit will be included in all procurements with Federal Funding, and will be
implemented in the Spring of 2020.
2. The Department finalized the Subrecipient Monitoring Policy, which encompasses the
financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1,
2018. The Department provided user training on the subject in February 2018. However, only
brand new competitively bid procurements utilized this policy during the initial roll out of this
policy. The audited procurements were amendments, not new procurements, and therefore
were not included in the roll out of the Subrecipient Monitoring policy at that time.
3. The Department is currently rolling out the Subrecipient Monitoring policy to all procurements.
Combined with the subrecipient training module and tools, staff have been trained on contract
management and monitoring tools to better ensure compliance with Uniform Guidance
requirements. This is to be followed by ongoing specialized trainings, supporting tools, and
procedures for expenditure testing, site visits, files reviews, and corrective action planning.
G-47
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Anticipated Completion Date
June 30, 2020
Contact Person
Melissa Kelleher, Grants Administrator
Status as of Opinion Date
Partially resolved. The DHHS considers all of the subrecipient monitoring findings to be fully resolved
through Department policy and Department wide implementation. However, it should be noted full
compliance will not be achieved for one to two contract cycles due to timing.
The Department began addressing the issue of Subrecipient Monitoring issue in June 2017 when the first
Grants Administrator was hired.
The Department finalized the Subrecipient Monitoring Policy, which, encompasses the financial and
programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department
provided user training on the subject in February and September 2018, training over one hundred forty-six
staff. However, only brand new procurements utilized this policy during the initial roll out of this
policy.
The Department hired a new Grants Administrator in May 2019. The Subrecipient Monitoring policy
rolled out to all procurements, including sole source, amendments, and renewals, effective July 1,
2020. The Contracts Unit received specialized subrecipient monitoring training on May 13 and October
28, 2020. Department wide training to all staff occurred weekly between September 8 and November 3,
2020. The Grants Office provided additional targeted training to Program staff through team
meetings. Over one hundred fifty Program and Finance staff received training. Annual training will be
held in September each year. Refresher training or training for new staff is available upon request from
the Grants Office.
Additionally, the Grants Office website launched in June 2020, which offers Program, Finance, and
Contracts Unit staff access to the all the Grants Office policies, including the subrecipient monitoring
policy, as well as training modules, slides, and tools.
The Grants Office works closely with the Contracts Unit to ensure compliance with the Subrecipient
Monitoring policy.
G-48
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-015
NH Department of Health and Human Services
TANF Cluster (93.558, 93.714)
Federal Award Numbers: 2018G996115, 2019G996115
Federal Award Year: 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions: Child Support Non-Cooperation
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2018-007
Statistically Valid Sample: No
Criteria
If the State agency responsible for administering the State plan under Title IV-D of the Social Security
Act determines that an individual is not cooperating with the State in establishing paternity, or in
establishing, modifying or enforcing a support order with respect to a child of the individual, and reports
that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an
amount equal to not less than 25% from the TANF assistance that would otherwise be provided to the
family of the individual and (20 may deny the family any TANF assistance. Health and Human Services
(HHS) may penalize a State for up to 5% of the SFAG for failure to substantially comply with this
required State child support program (45 CFR sections 264.30 and 264.31)
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition
During our testwork related to child support non-cooperation, we noted the following:
E. For 2 of 40 participants selected for testwork, while the participant had been correctly sanctioned due
to non-cooperation, there was documentation maintained within the file that the participant’s sanction
should have been lifted due to future cooperation. While the sanction was authorized to be lifted,
New Heights, the eligibility maintenance system, was not properly updated and the sanction remained
in effect, resulting in an inappropriate reduction of the participant’s benefits.
F. For 6 of 40 participants selected for testwork, there was insufficient support maintained within the file
to document that the participant had not been cooperating and as a result, it was unclear if the
participant’s benefits should have been sanctioned.
G. For 1 of 40 participants selected for testwork, the participant’s case file indicated that the participant
was issued a letter of non-compliance in July 2017, however the participant was not sanctioned until
May 2019. It was unclear why the sanction was not imposed as of July 2017 and if the participant’s
benefit payment was accurate during this time period.
G-49
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Cause
The cause of the condition found was a result of inadequate review controls in place to ensure sufficient
documentation is maintained to support the beginning and termination of sanction periods related to child
support non-cooperation and ensuring that the New Heights system is updated timely to reflect the correct
sanction dates.
Effect
The effect of the condition found is that participant benefit payments may not be accurately paid and could
result in unallowable costs charged to the federal program.
Questioned Costs
Not determinable
Recommendation
We recommend that the Department enhance its existing controls and procedures to ensure the
documentation used to support the beginning and termination of sanction periods is maintained and that
those dates are accurately reflected within the New Heights System.
View of Responsible Officials
We partially concur. While there are errors regarding insufficient documentation for child support
sanctions, we believe there are sufficient processes in place to ensure documentation is maintained to
support these sanctions.
We believe that additional communication needs to be given to all staff to reiterate these procedures.
We will notify all supervisors in an email explaining the errors that were found during the audit. We will
require the supervisors to include these topics at their next staff meeting.
Individual emails will be sent to the staff involved with the errors for additional guidance.
We have also added an additional slide in our Power Point presentation for new staff.
Anticipated Completion Date
June 1, 2020
Contact Person
Colleen McKinlay, Program Specialist IV
Status as of Opinion Date
Unresolved. A similar finding was identified in the 2020 and the 2021 single audit report. See finding and
views of responsible officials at 2020-012 and 2021-023
G-50
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-017
NH Department of Health and Human Services
TANF Cluster (93.558, 93.714)
Federal Award Numbers: 2018G996115, 2019G996115
Federal Award Year: 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provisions: Penalty for Failure to Comply with Work
Verification Plan
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: 2018-009
Statistically Valid Sample: No
Criteria
The State agency must maintain adequate documentation, verification, and internal control procedures to
ensure the accuracy of the data used in calculating work participation rates. In so doing, it must have in
place procedures to (a) determine whether its work activities may count for participation rate purposes;
(b) determine how to count and verify reported hours of work; (c) identify who is a work eligible
individual; and (d) control internal data transmission and accuracy. Each State agency must comply with
its HHS-approved Work Verification Plan in effect for the period that is audited. HHS may penalize the
State by an amount not less than one percent and not more than five percent of the SFAG for violation of
this provision (42 USC 601, 602, 607, and 609); 45 CFR sections 261.60, 261.61, 261.62, 261.63, 261.64,
and 261.65).
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition
During our testwork related to the compliance with the State’s work verification plan we noted the
following:
E. For 10 of 40 participants selected for testwork, the documentation to support the hours worked for
each participant did not agree to the New Height’s system and as a result, the hours for each
participant were under reported.
F. For 1 of 40 participants selected for testwork, the participant’s work hours were auto populated within
the New Heights system and were not properly adjusted once supporting documentation such as
paystubs were received. As a result, the participant’s work hours were over reported.
G. For 3 of 40 participants selected for testwork, there was insufficient documentation to support the
number of hours worked within the New Heights system for each participant.
G-51
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Cause
The cause of the condition found was a result of inadequate review controls in place to ensure sufficient
documentation is maintained to support the number of work hours reported by participants and that the
hours worked is accurately reported within the New Heights system.
Effect
The effect of the condition found is that the State may not be in compliance with its work verification plan
and would not be able to identify the noncompliance timely.
Questioned Costs
Not determinable
Recommendation
We recommend that the Department enhance its existing controls and procedures to ensure the
documentation used to support participant workhours is maintained and that the hours reported agree to the
documented hours worked and are accurately reflected within the New Heights System.
View of Responsible Officials
We concur with the findings listed above. The following actions to mitigate future issues have been put
in place.
• We have redesigned the WPS Activity Tracking Sheet. This will be implemented for the month
of March 2020.
• A memo was created highlighting the errors found during the audit reminding all staff to follow
procedures to prevent errors.
• We will be adding additional slides in the Quality Assurance Section of the Core Power Point
Training for new staff.
Anticipated Completion Date
June 30, 2020
Contact Person
Kim Runion, Bureau Chief
Status as of Opinion Date
Unresolved. A similar finding was identified in the 2020 and the 2021 single audit report. See finding and
views of responsible officials at 2020-014 and 2021-025
G-52
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-018
NH Department of Health and Human Services
Community Services Block Grant (93.569)
Federal Award Numbers: G-18B1NHCOSR, G-1901NHCOSR
Federal Award Year: 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
3. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.331(a)
4. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b))
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
As part of the Community Services Block Grant program, the New Hampshire Department of Health and
Human Services (the Department) enters into grant agreements with local entities to provide services to
eligible participants. As part of our testwork over the subrecipient monitoring process, we noted the
following as of the year ending June 30, 2019:
A. The Department communicates award information to subrecipients through the approved
contract. Per review of the contract, for each of the 2 subrecipients selected for testwork, the
Department did not communicate all the required award information as outlined in 2 CFR section
200.331(a). Specifically the following elements were not communicated:
a. Federal award date
b. Federal Award Identification Number (FAIN)
c. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2
CFR section 200.414)
d. Identification of whether the award is research and development (R&D)
B. The Department was unable to provide support that a programmatic risk assessment was
completed for each of the 2 subrecipients selected for testwork as required under the
Department’s Subrecipient Monitoring Policy dated March 5, 2018. As a result, it was unclear
G-53
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
what type of during the award monitoring was required to be performed over the 2 subrecipients
selected for testwork.
Cause
The cause of the condition found was primarily due to:
• Insufficient controls and procedures to ensure that all required federal award information has been
communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and
is not R&D, the Department was unaware that it was required to formally communicate that these items
are not applicable to the federal award.
• The Department requires a risk assessment to be performed prior to entering into a subrecipient contact.
There does not appear to be sufficient controls and procedures to ensure that the required risk
assessments have been performed or if they are performed that they are retained and used to support
the subrecipient monitoring process.
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a)
and 2 CFR section 200.331(b).
Questioned Costs
None
Recommendation
We recommend that the Department continue to review its existing policies and procedures to ensure that
the Department complies with the provisions of 2 CFR section 200.331(a) and 2 CFR section 200.331(b).
This would include implementing controls and procedures to ensure that t:
1. All required award information is communicated to subrecipients;
2. A documented risk assessment is performed over all subrecipients and the results of that risk
assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient.
View of Responsible Officials
We concur.
1. The Department has developed an exhibit to address the required notification under 2 CFR
200.331. This exhibit will be included in all procurements with Federal Funding, and will be
implemented in the Spring of 2020.
2. The Department finalized the Subrecipient Monitoring Policy, which, encompasses the
financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1,
2018. The Department provided user training on the subject in February 2018. However, only
brand new competitively bid procurements utilized this policy during the initial roll out of this
policy. The audited procurements were amendments, not new procurements, and therefore
were not included in the roll out of the Subrecipient Monitoring policy at that time.
3. The Department is currently rolling out the Subrecipient Monitoring policy to all procurements.
Combined with the subrecipient training module and tools, staff have been trained on contract
G-54
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
management and monitoring tools to better ensure compliance with Uniform Guidance
requirements. This is to be followed by ongoing specialized trainings, supporting tools, and
procedures for expenditure testing, site visits, files reviews, and corrective action planning.
Anticipated Completion Date
June 30, 2020
Contact Person
Melissa Kelleher, Grants Administrator
Status as of Opinion Date
Partially resolved. The DHHS considers all of the subrecipient monitoring findings to be fully resolved
through Department policy and Department wide implementation. However, it should be noted full
compliance will not be achieved for one to two contract cycles due to timing.
The Department began addressing the issue of Subrecipient Monitoring issue in June 2017 when the first
Grants Administrator was hired.
The Department finalized the Subrecipient Monitoring Policy, which, encompasses the financial and
programmatic risk assessments as well as the subrecipient monitoring, on June 1, 2018. The Department
provided user training on the subject in February and September 2018, training over one hundred forty-six
staff. However, only brand new procurements utilized this policy during the initial roll out of this
policy.
The Department hired a new Grants Administrator in May 2019. The Subrecipient Monitoring policy
rolled out to all procurements, including sole source, amendments, and renewals, effective July 1,
2020. The Contracts Unit received specialized subrecipient monitoring training on May 13 and October
28, 2020. Department wide training to all staff occurred weekly between September 8 and November 3,
2020. The Grants Office provided additional targeted training to Program staff through team
meetings. Over one hundred fifty Program and Finance staff received training. Annual training will be
held in September each year. Refresher training or training for new staff is available upon request from
the Grants Office.
Additionally, the Grants Office website launched in June 2020, which offers Program, Finance, and
Contracts Unit staff access to the all the Grants Office policies, including the subrecipient monitoring
policy, as well as training modules, slides, and tools.
The Grants Office works closely with the Contracts Unit to ensure compliance with the Subrecipient
Monitoring policy.
G-55
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-019
NH Department of Health and Human Services
Social Services Block Grant (93.667)
Federal Award Numbers: 2017G992342, 2018G992342, 2019G992342
Federal Award Year: 2017, 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
A pass-through entity must:
4. Clearly identify to the subrecipient required award information and applicable requirements
described in 2 CFR section 200.331(a);
5. Evaluate each subrecipient’s risk of noncompliance for the purposes of determining the
appropriate subrecipient monitoring related to the subaward (2 CFR section 300.331(b)); and
6. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, complies with the terms and conditions of the subaward, and achieves
performance goals (2 CFR sections 200.331(d) through (f). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required
through the terms and conditions of the award, subaward monitoring must include 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 other means.
Non-federal entities must establish and maintain effective internal control over federal awards that
provide reasonable assurance that the non-federal entity is managing the federal award in compliance with
federal statutes, regulations, and the terms and conditions of the federal award.
Condition
As part of the Social Services Block Grant program, the New Hampshire Department of Health and
Human Services (the Department) enters into grant agreements with local entities to provide a variety of
services, including meals, adult day services and comprehensive family services. On a periodic basis, the
subrecipient submits a request for reimbursement for the services that are rendered which is reviewed and
approved by the Department prior to payment. As part of our testwork over the subrecipient monitoring
process, we noted the following as of the year ending June 30, 2019:
D. The Department communicates award information to subrecipients through the approved
contract. Per review of the contract, for all 6 subrecipients selected for testwork, the Department
did not communicate all the required award information as outlined in 2 CFR section 200.331(a).
Specifically the following elements were not communicated:
G-56
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
a. Federal award date
b. Indirect cost rate for federal awards (including if the deminimus rate is charged per 2
CFR section 200.414)
c. Identification of whether the award is research and development (R&D)
E. The Department did not perform a risk assessment for each of the 6 subrecipients selected for
testwork. As a result, it was unclear what type of during the award monitoring was required to be
performed over the 6 subrecipients selected for testwork.
D. The Department’s during the award monitoring is primarily composed of the Department’s
review process related to requests for reimbursement submitted by the subrecipient. The
Department reviews the invoices prior to payment indicating that the invoice appears reasonable
and allowable under federal regulations. For each of the 6 subrecipients selected for testwork, the
Department was unable to provide documentation to support that it had performed additional
monitoring procedures over its subrecipients to address whether or not the subrecipient had
sufficient documentation to support that the costs requested for reimbursement were allowable or
whether or not the subrecipient had determined participant eligibility accurately if eligibility
requirements were applicable. As the Department does not have a formal subrecipient monitoring
policy that outlines the types and frequency of monitoring activities to be performed and there
was no risk assessment performed for these subrecipients, it was unclear whether or not the
exclusion of these types of monitoring activities was appropriate.
Cause
The cause of the condition found was primarily due to:
• Insufficient controls and procedures to ensure that all required federal award information has been
communicated to subrecipients. As this program does not allow for an indirect cost reimbursement and
is not R&D, the Department was unaware that it was required to formally communicate that these items
are not applicable to the federal award.
• The Department requires a risk assessment to be performed prior to entering into a subrecipient contact.
For each of the 6 subrecipient selected for testwork, the contracts were entered into prior to the date in
which the Department’s risk assessment policy went into effect in June of 2018.
• The Department currently does not have a documented subrecipient monitoring policy that outlines the
types and frequency of monitoring procedures that will be performed over this federal program and how
those monitoring procedures will be documented.
Effect
The effect of the condition found is that the Department did not comply with 2 CFR section 200.331(a)
and 2 CFR section 200.331(b). In addition, as there is no documented subrecipient monitoring policy for
this program, fiscal and programmatic monitoring requirements that the subrecipient is required to comply
with may not be appropriately or timely monitored for compliance by the Department, resulting in
potential unallowable costs being charged to the program.
Questioned Costs
Not determinable
G-57
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Recommendation
We recommend that the Department continue to review its existing policies and procedures to ensure that
the Department complies with the provisions of 2 CFR section 200.331(a), 2 CFR section 200.331(b) and
2 CFR section 200.251. This would include implementing controls and procedures to ensure that:
4. All required award information is communicated to subrecipients;
5. A documented risk assessment is performed over all subrecipients and the results of that risk
assessment is used to evaluate the types of monitoring procedures that will be performed over
the subrecipient; and
6. As a result of the risk assessment performed, monitoring activities are performed over
subrecipients to ensure compliance with the terms and conditions of its subrecipient grant
agreement. The procedures that are to be performed based upon the assessed level for of risk
should be outlined in a documented subrecipient monitoring policy that is specific to this
program. The subrecipient monitoring policy should document the types and frequency of
monitoring activities that will be performed.
View of Responsible Officials
We concur.
1. The Department has developed an exhibit to address the required notification under 2 CFR
200.331. This exhibit will be included in all procurements with Federal Funding, and will be
implemented in the Spring of 2020.
2. The Department finalized the Subrecipient Monitoring Policy, which, encompasses the
financial and programmatic risk assessments as well as the subrecipient monitoring, on June 1,
2018. The Department provided user training on the subject in February 2018. However, only
brand new competitively bid procurements utilized this policy during the initial roll out of this
policy. The audited procurements were amendments, not new procurements, and therefore
were not included in the roll out of the Subrecipient Monitoring policy at that time.
3. The Department is currently rolling out the Subrecipient Monitoring policy to all procurements.
Combined with the subrecipient training module and tools, staff have been trained on contract
management and monitoring tools to better ensure compliance with Uniform Guidance
requirements. This is to be followed by ongoing specialized trainings, supporting tools, and
procedures for expenditure testing, site visits, files reviews, and corrective action planning.
Anticipated Completion Date
June 30, 2020
Contact Person
Melissa Kelleher, Grants Administrator
Status as of Opinion Date
Partially resolved. A similar finding was identified in the 2020 single audit report. See finding and views
of responsible officials at 2020-019
G-58
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-021
NH Department of Health and Human Services
Medicaid Cluster (93.775, 93.777, 93,778)
Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 1805NH5ADM, 1905NH5ADM,
1805NHIMPL, 1905NHIMP
Federal Award Years: 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Special Tests and Provision: Provider Eligibility (Screening and
Enrollment)
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
In order to receive Medicaid payments, providers must: (1) be licensed in accordance with Federal, State,
and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and
447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and
enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make
certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid
managed care network providers are subject to the same disclosure, screening, enrollment, and
termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR
Part 438, Subpart H.
Per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal
awards that provide reasonable assurance that the non-federal entity is managing the federal award in
compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition
The Department assigns risks to each provider based on their provider type. All new provider enrollments
and moderate and high risk revalidations are reviewed and approved by the Department of Health and
Human Services (the Department). However, for limited risk revalidations, the Department has
outsourced this service to the Department’s Medicaid Management Information System fiscal agent
(Fiscal Agent). The Department holds at least bi-weekly meetings with the fiscal agent to discuss issues
noted with enrollment, revalidation, trends noted, etc. In addition, the Department has hired the Fiscal
Agent to perform a quality assurance review over all provider new and revalidations prior to the
notification that they are an eligible provider for State of New Hampshire services to address the accuracy
of enrollment. During the year the Department noted issues and inconsistencies in the revalidations which
were performed by the Fiscal Agent and decided as of July 1, 2019 all new enrollments and revalidations
are reviewed and approved by the Department before the Fiscal Agent completes the application or
revalidation process.
During our test work over the above monitoring controls, the Department provided minutes of the
meetings that demonstrated review of enrollment and revalidation processes and discussion of resulting
trends and efficiencies on a consistent basis. The feedback from the Fiscal Agent regarding the quality
G-59
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
assurance process is less formalized and more ad-hoc in nature not allowing for audit evidence throughout
the fiscal year of the accuracy monitoring control.
During our testwork over provider eligibility we noted:
(a) For 6 of 105 providers selected for testwork, there was a discrepancy between the risk noted in
the MMIS and the risk per the Department’s “Provider application fee and type of screening
required for NH Medicaid Program” (risk chart) file.
a. For 4 of 6, the provider was coded as a Moderate risk provider per the risk chart, but was
coded limited risk in MMIS. For these 4 provider, we noted the risk per the risk chart was
incorrect. As MMIS was correct, the procedures performed were in accordance with
policy.
b. For 1 of 6, the provider was coded a Limited risk provider in MMIS although the
provider was coded moderate risk per the risk chart. The Department performed the
review as if the provider was Moderate, however, the coded risk in MMIS was
inaccurate.
c. For 1 of 6, this provider was coded a moderate risk provider in MMIS, but per the risk
chart should have been a limited risk provider. Moderate procedures were performed.
(b) For 41 of 105 providers selected for testwork, the Department did not revalidate the provider
within the required 5 year timeframe. Timeframes ranged from 5.1 to 6.9 years.
(c) For 3 of 105 providers selected for testwork, the providers did not have a most recent revalidation
date completed within MMIS. The Department noted the revalidation was still being investigated
due to issues noted on the license. The documentation reflected an outstanding license, however,
there didn’t appear to be an update related to the investigations in over 9 months. Additionally, as
the provider has not yet been revalidated, the provider did not have a risk assigned in MMIS.
Cause
With regard to the monitoring controls, the condition noted is due to lack of a formalized process to receive
information on a regular basis from the Fiscal Agent resulting in the control not being effectively designed.
The cause of the noncompliance conditions found was primarily due to the following:
(a) inconsistent documentation maintained related to provider risk assignment, and;
(b) System updates causing delays in the revalidation process.
Effect
The effect of the condition found is that the Department does not revalidate providers timely and does not
have steps to ensure provider revalidates are documented accurately.
Questioned Costs
None
G-60
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Recommendation
The Department has represented that review and approval are required of the limited risk revalidations
and new provider enrollment effective July 1, 2019. For the monitoring control, the Department should
implement a more formal process for receiving quality assurance feedback from the Fiscal Agent such
that the Department has adequate documentation on a defined periodic basis that can be reviewed.
With regard to compliance, the Department should consistently apply provider risk as noted per the risk
chart and implement procedures to ensure provider revalidations are completed timely.
View of Responsible Officials
We concur with the finding. DHHS knew that we were behind in establishing the system processes for
revalidation. DHHS established a team of DHHS staff, MMIS, DoIT staff, and fiscal agent staff to
establish a project plan and implementation of the revalidation process. This requires system updates,
new provider revalidation application, and provider notification. DHHS also reached out to CMS for
technical assistance to perform revalidations including the electronic data exchange of duel providers that
are enrolled with Medicare and Medicaid to expect the revalidation screening process which allowed
DHHS to screen thousands of providers quickly and efficiently expediting the process. DHHS and the
fiscal agent are actively performing revalidation monthly and the process is being reviewed and updated
as needed to ensure all revalidations are done correctly and timely.
DHHS will ensure current procedures cover all required regulations for provider enrollment. DHHS will
ensure there is documentation of our periodic, systematic oversight of the fiscal agent’s quality review
process. However, based on the restrictions on revalidation and enrollment due to COVID, we will not be
able to complete and implement a new process for overseeing the fiscal manager in revalidations as our
previous completion date indicated the Federal Emergency Order is still in effect as of the date of this
form.
DHHS will ensure all of the SFY2019 revalidations are complete by December 2022.
Anticipated Completion Date
March 2021
Contact Person
Francesca Hennessy
Status as of Opinion Date
Unresolved. A similar finding was identified in the 2020 and the 2021 single audit report. See finding and
views of responsible officials at 2020-022 and 2021-034
G-61
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Finding Reference Number: 2019-022
NH Department of Health and Human Services
Medicaid Cluster (93.775, 93.777, 93,778)
Federal Award Numbers: 1805NH5MAP, 1905NH5MAP, 1805NH5ADM, 1905NH5ADM,
1805NHIMPL, 1905NHIMP
Federal Award Years: 2018, 2019
U.S. Department of Health and Human Services
Compliance Requirement: Eligibility
Type of Finding: Significant Deficiency and Material Noncompliance
Prior Year Finding: No
Statistically Valid Sample: No
Criteria
Eligibility for Medicaid can be broadly grouped into determinations based on Modified Adjusted Gross
Income (MAGI-based determination) and non-MAGI determinations (e.g. Aged, Blind and Disabled).
Auditors should test eligibility determinations made for fee-for-service and managed care beneficiaries.
The auditors should re-determine eligibility to ensure beneficiaries qualify for the Medicaid program and
are in the appropriate enrollment category.
Condition
The Division of Medicaid Services (DMS), with the Department of Health and Human Services (DHHS)
administers the Medicaid program. The Bureau of Family Assistance (BFA) is responsible for
determining eligibility for non-MAGI groups as well as MAGI groups according to New Hampshire
policy.
One hundred sixty MAGI and non-MAGI participants were selected for review, who fell into four main
eligibility types: fee for service, managed care, waiver, and nursing home. During the audit, the following
was noted:
(a) For 1 of 40 managed care participants, the State did not take steps to ensure the participant was a
New Hampshire resident and the participants income verification was not verified via the verify
current income (VCI) match (<10%) or New Hampshire employment Security (NHES)
verification. We noted that pursuant to NH’s CMS approved MAGI-based verification plan,
residency is a “self-attest” factor of eligibility for New Hampshire Medicaid, however, when this
participant applied they indicated they would be moving to New Hampshire and never attested
they had in fact moved to New Hampshire and the application for funding showed they attested to
not living in New Hampshire. In addition the participant failed the data match for income.
However when updated income information was received, the DHHS trainee case worker did not
properly process the case and the trainee’s supervisor did not review, correct, and confirm the
case. The New HEIGHTS system enrolled the participant. DHHS requires the case workers to
review and uncheck the eligibility notation applied by the system. In this case, the case worker
inadvertently did not uncheck the MAGI-eligible notation and the person received Medicaid
benefits for a period of approximately a year without appropriate income support. The
G-62
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Department’s control to have all trainee cases reviewed and confirmed by a supervisor was not
conducted and failed to prevent the beneficiary from becoming enrolled.
(b) For 96 of 160 participants, (21 of 40 fee for service, 6 of 40 managed care, 30 of 40 waiver, and
39 of 40 nursing home) the Department was unable to provide support to verify that the
participants social security income had been matched, via a Bendex match, with the Social
Security Administration (SSA) because the SSA has not provided New Hampshire authorization
to share that information. Therefore validation that the participants were deemed eligible by the
SSA was not able to be determined.
Cause
The cause of the condition found under paragraph (a) was primarily due to a trainee not properly processing
the case combined with improper oversight of the trainee’s case, i.e., the supervisor not correcting and
confirming the case before processing is an ineffective control.
The cause of the condition under paragraph (b) is that the SSA has not issued a Redisclosure Memorandum
for the CMS Single Audit. Without the Memorandum, states do not have permission to disclose SSA data
to any auditors. There is no control failure attached to this compliance issue as there are conflicting federal
regulations that prevented the information from being shared.
Effect
The Department is providing Medicaid benefits to participants who may be ineligible for the program.
Questioned Costs
Not determinable
Recommendation
The Department should implement a process to ensure all participants meet all eligibility requirements
before being awarded benefits. In addition, the Department should obtain approval from SSA to share
data with the single auditor or work with SSA to provide correspondence to the single auditor confirming
eligibility for individuals during the audit process.
View of Responsible Officials
We concur.
This was an isolated incident which has been discussed thoroughly with the supervisor, both via email
and over the phone. The supervisor went over the error with the trainee. Management will review other
procedures performed at other District Office to determine whether other processes should be
implemented to ensure supervisors know the cases completed by trainees and verify they have reviewed
the cases to ensure accurate eligibility determinations.
However, the Department would point out that there was no issue with the self-attestation of residency.
Federal regulations permit states to choose to accept self-attestation for residency of the individual’s
information for all factors of eligibility except where otherwise required by law (e.g. citizenship and
immigration status). Self-attestation can be accepted from the individual applying, an adult who is in the
applicant’s household, an authorized representative, or if the individual is a minor or incapacitated,
someone acting responsibly for the individual. States must accept self-attestation of pregnancy unless the
state has information that is not reasonably compatible with such attestation (see Self-attestation
(§435.945)).
G-63
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
The Department has contacted the Social Security Administration (SSA) and has requested written
permission from SSA to authorize KPMG access for the Single Audit. The Department of Health and
Human Services is governed by the Computer Match Agreement (CMA) it has executed with SSA, which
governs the safeguarding of its data. This is an open request with SSA and the DHHS will continue to
follow-up until a written decision is received from the SSA.
Anticipated Completion Date
September 30, 2020
Contact Person
Debra Sorli, Bureau Chief, Bureau of Family Assistance
Elizabeth Gillett, Deputy Information Security Officer
Status as of Opinion Date
Unresolved. A similar finding was identified in the 2020 and the 2021 single audit report. See finding and
views of responsible officials at 2020-023 and 2021-033
G-64
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
U.S. Department of Health and Human Services 2018-007
NH Department of Health and Human Services
CFDA# 93.558 Temporary Assistance for Needy Families (TANF)
Grant Year and Awards:
2017G996115 10/1/16-9/30/17
2018G996115 10/1/17-9/30/18
Finding: Incorrect sanctioning of benefit, Noncompliance under Special Test - Child Support
Noncooperation and Adult Custodial Parent of Child Under Six When Childcare Not Available
Criteria:
If the State agency responsible for administering the State plan approved under Title IV-D of the Social
Security Act determines that an individual is not cooperating with the State in establishing paternity, or in
establishing, modifying or enforcing a support order with respect to a child of the individual, and reports
that information to the State agency responsible for TANF, the State TANF agency must (1) deduct an
amount equal to not less than 25 percent from the TANF assistance that would otherwise be provided to the
family of the individual, and (2) may deny the family any TANF assistance. HHS may penalize a State for
up to five percent of the SFAG for failure to substantially comply with this required State child support
program (42 USC 608(a)(2) and 609(a)(8); 45 CFR sections 264.30 and 264.31).
If an individual is a single custodial parent caring for a child under the age of six, the State may not reduce
or terminate assistance for the individual’s refusal to engage in required work if the individual demonstrates
to the State an inability to obtain needed child care for one or more of the following reasons: (a)
unavailability of appropriate child care within a reasonable distance from the individual’s home or work
site; (b) unavailability or unsuitability of informal child care by a relative or under other arrangements; or
(c) unavailability of appropriate and affordable formal child care arrangements. The determination of
inability to find child care is made by the State. HHS may penalize a State for up to five percent of the
SFAG for violation of this provision (42 USC 607(e)(2) and 609(a)(11); 45 CFR sections 261.15, 261.56,
and 261.57).
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition:
During our testwork over special tests and provisions related to the sanctioning of benefits, we noted the
following:
1 For 1 of 40 participants selected for testwork related to sanctions for failure to cooperate with the
Department for Child Support Services, the participant had been incorrectly sanctioned resulting in an
incorrect reduction of benefits paid to the participant. The error had been identified previously by the
Department and the sanction had been lifted, however, the participant did not receive a supplemental
payment of benefits to rectify the payment reduction. As a result, the participant was underpaid the
amount of benefits eligible to receive.
G-65
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
2 For 1 of 40 participants selected for testwork related to sanctions for failure to comply with work
requirements, the participant had been incorrectly sanctioned resulting in an incorrect reduction of
benefits paid to the participant. The error had been identified previously and the sanction had been
lifted, however, the participant did not receive a supplemental payment of benefits to rectify the
payment reduction. As a result, the participant was underpaid the amount of benefits eligible to receive.
Cause:
The cause of the condition found was a result of insufficient controls and procedures in place to ensure
retroactive benefits were paid to each participant. In both cases, the participant did not timely provide the
appropriate documentation to prevent the penalty from being placed. Subsequent to being sanctioned, the
participant provided the required documentation to support that a sanction was not warranted. While the
Department reviewed the documentation and lifted the sanction from being applied to future benefits, it did
not retroactively pay the prior sanctioned benefit amount that the participant was eligible to receive as
required.
Effect:
The effect of the condition found is that participants did not receive the full benefit amount that they were
eligible to receive.
Questioned Costs:
None
Repeat Finding:
No
Whether Sampling Was Statistically Valid:
The sample was not intended to be and, was not, a statistically valid sample.
Recommendation:
We recommend that the Department enhance its existing policies and procedures to ensure there are
sufficient controls in place to provide retroactive benefits to participants that are improperly sanctioned as
a result of a delay in the receipt of documentation from participants to support that a sanction is not
warranted.
View of Responsible Officials:
We concur. We agree that the individuals’ sanction should have been lifted, or that a supplement should
have been issued when the recertification completed. Staff will be reminded to look at all aspects of a case
when they are confirming a recertification including potential for retroactive benefits.
The training unit will be engaged in this effort along with supervisors.
Anticipated Completion Date:
August 31, 2019
Contact Person:
Maureen Burke, Administrator III
G-66
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Status as of Opinion Date:
Unresolved. A similar finding was identified in the 2019, 2020, and 2021 single audit report. See finding
and views of responsible officials at 2019-015, 2019-016, 2020-012, 2020-013, and 2021-023
G-67
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
U.S. Department of Health and Human Services 2018-008
NH Department of Health and Human Services
CFDA# 93.558 Temporary Assistance for Needy Families (TANF)
Grant Year and Awards:
2017G996115 10/1/16-9/30/17
2018G996115 10/1/17-9/30/18
Finding: Insufficient documentation to support compliance with required maintenance of effort (MOE)
requirements as it relates to in-kind contributions from third party organizations
Criteria:
Every fiscal year, a State must maintain an amount of “qualified state expenditures” (as defined in 42 US
609(a)(7)(B) and 45 CFR section 263.2) for eligible families (as defined in 42 USC 609(a)(7)(B)(i)(IV) and
45 CFR section 263.2(b)) at least at the applicable percentage of the State’s historic State expenditures.
Qualified expenditures with respect to eligible families may come from all programs. This requirement
may be met through allowable state or local cash expenditures for goods and services, cash donations by
non-governmental third parties, or the value of third party in-kind contributions. A State’s records must
show that all costs are verifiable and meet all applicable requirements in 45 CFR sections 263.2 through
263.6.
45 CFR 75 303(a) states the non-Federal entity must establish and maintain effective internal control over
the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition:
For the federal fiscal year ending September 31, 2017, the State was required to meet an annual MOE
requirement of $32,115,003. In total, the State incurred $36,271,757 in eligible MOE expenditures, which
exceeded the amount required. Of the MOE expenditures incurred, $9,256,657 represented in-kind
contributions from 13 community organizations. On an annual basis, each community organization
completes a TANF Maintenance of Effort form to report expenses that qualify as TANF expenditures. The
form requires a description of the program operated and what TANF purpose the program addresses, the
number of families served, and the amount of eligible expenditures in total. The form is signed by the
organization and submitted to the State to serve as the supporting documentation for the in-kind contribution
provided by the community organization. No additional documentation is provided by the community
organization to support the amount of the expenditures included on the form. The State does not perform
procedures to ensure expenditures reported by the community organization are accurate and represent valid
expenditures that were incurred to support the program outlined within the form and therefore to ensure the
in-kind contribution used to support the required MOE is appropriate.
Cause:
The cause of the condition found was a result of insufficient controls and procedures in place to ensure the
expenditures reported by the community organization are properly supported by valid expenditures that
meet the criteria of qualified TANF expenditures.
G-68
STATE OF NEW HAMPSHIRE – FISCAL YEAR 2021 SINGLE AUDIT
SUMMARY STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
FOR FISCAL YEARS 2020, 2019, AND 2018
Effect:
The effect of the condition found is that the State may not meet the required annual MOE requirement as
in-kind contributions may not be complete or represent qualified expenditures and they do not have controls
and procedures in place to identify the noncompliance timely.
Questioned Costs:
Not determinable.
Repeat Finding:
No
Whether Sampling Was Statistically Valid:
The sample was not intended to be and, was not, a statistically valid sample.
Recommendation:
We recommend that the Department implement controls and procedures to ensure that in-kind contributions
used to support MOE are reviewed to ensure that the expenditures are accurate and meet the definition of
qualifying expenditures.
View of Responsible Officials:
The Department does not concur. We have procedures to ensure that in-kind contributions used to support
MOE are reviewed to ensure that the expenditures are accurate and meet the definition of qualifying
expenditures. The procedures the Department performs include meeting with the providers to provide them
with training and support on the front end to ensure amounts reported are complete and accurate and in
accordance with Federal regulations. The Department understands the definition of third party in-kind
contributions is:
Third-party in-kind contributions means the value of non-cash contributions (i.e., property or services) that:
(1) Benefit a federally assisted project or program; and
(2) Are contributed by non-Federal third parties, without charge, to a non-Federal entity under a Federal
award.
The Department requires that the providers certify allowable expenditures which is how it verifies the
amounts provided are accurate and complete. The Department has forwarded all of the documents that the
providers submitted certifying allowable expenditures. In addition, we have submitted the specific
Memorandum of Understandings (MOUs) that were requested.
Anticipated Completion Date:
N/A
Contact Person:
Maureen Burke, Administrator III
KPMG Rejoinder:
The Department stated in their response that it verifies the completeness and accuracy of the third party in-
kind match through certifications the providers submit. Per review of the signed certifications, we noted
G-69
Full text shows the first 300 of 332 pages; the complete document is the PDF above.