AUDIT SUMMARY

 

Our audit of the Department of Social Services (Social Services) for the fiscal year ended June 30, 2025, found:

 

• • proper recording and reporting of all transactions, in all material respects, in the Commonwealth’s accounting and reporting system, Social Services’ financial systems, and supplemental information and attachments submitted to the Department of Accounts (Accounts);

 

• • two deficiencies related to subrecipient monitoring and federal reporting that we consider to be material weaknesses in internal controls and instances of noncompliance with applicable laws and regulations that are required to be reported under Government Auditing Standards;

 

• • 22 matters involving internal control and its operation requiring management’s attention, 19 of which also represent instances of noncompliance with applicable laws and regulations that are required to be reported under Government Auditing Standards; however, we do not consider the matters to be material weaknesses; and

 

• • adequate corrective action with respect to the prior audit findings identified as complete in the Findings Summary included in the Appendix.

 

In response to the Comment to Management included in Social Services’ fiscal year 2024 audit report, Social Services engaged a consultant in fiscal year 2025 to assist the agency with developing and evaluating the adequacy of its remediation plans for prior audit findings.  As a result of its efforts, Social Services was able to fully resolve eight of the 27 findings (30%) listed as “Ongoing” in its fiscal year 2024 audit report.  Additionally, through its corrective actions, Social Services successfully reduced the severity of the prior year finding titled “Improve Information Security Program and IT Governance” from a material weakness to a significant deficiency.  Social Services initiated corrective actions on the remaining ongoing findings during fiscal year 2026 and has dedicated the necessary resources to oversee and implement corrective actions.  Social Services anticipates that it will continue to fully resolve many of its ongoing findings by the end of fiscal year 2026.  Social Services’ efforts related to its ongoing findings are reflected in the section of our report titled “Internal Control and Compliance Findings and Recommendations.”

 

We identified the Temporary Assistance for Needy Families (TANF) federal grant program as a high-risk major federal program at Social Services and included it within the Commonwealth’s Single Audit scope.  The Office of Management and Budget’s Compliance Supplement requires an audit of Social Services’ Administration for Children and Families’ (ACF) 199 TANF Data Report (ACF-199) and 209 Separate State Programs – Maintenance-of-Effort Data Report (ACF-209) submissions.  During the audit, we determined that Social Services did not implement internal controls to comply with the provisions at 45 Code of Federal Regulations (CFR) § 265.7(b), which require States to have complete and accurate reports that reflect information available in case records, are free of computational errors, and are internally consistent.  As a result, we communicated this matter to Social Services’ management through the audit finding titled “Implement Internal Controls over TANF Federal Performance Reporting,” which is included in the section of our report titled “Internal Control and Compliance Findings and Recommendations.”  Additionally, we issued a qualified opinion on the reporting compliance requirement for the TANF federal grant program because Social Services did not materially comply with the provisions at 45 CFR § 265.7(b).

 

In the section titled “Internal Control and Compliance Findings and Recommendations” we have included our assessment of the conditions and causes resulting in the internal control and compliance findings identified through our audit as well as recommendations for addressing those findings.  Our assessment does not remove management’s responsibility to perform a thorough assessment of the conditions and causes of the findings and develop and appropriately implement adequate corrective actions to resolve the findings as required by Accounts in Topic 10205 – Agency Response to APA Audit of the Commonwealth Accounting Policies and Procedures (CAPP) Manual.  Those corrective actions may include additional items beyond our recommendation.