16 | Audit of Contracted Human Services August 2024 7. Residency Verification in Reimbursement Requests Observation During our audit of reimbursement requests for Funds 117, 154, and 191, we identified recurring issues related to residency verification, which impact compliance with contractual requirements. These issues primarily stem from challenges in documenting and verifying that reimbursements are solely for services provided to Sarasota County residents. A prevalent issue observed across agencies is the insufficient documentation and verification processes concerning participant residency status. Specifically, seven (7) out of the twenty-nine (29) agencies sampled encountered challenges in providing clear and adequate documentation on residency status. • Demographic reports often lacked comprehensive details or standardized formats for documenting residency status. • Agencies struggled to consistently verify and document residency status, leading to uncertainties about compliance with contractual requirements. Although the auditee performs internal quarterly monitoring of residency verification, this process is conducted internally and is not adequately documented for third-party review. Without clear and comprehensive documentation, third-party reviewers cannot reliably verify that agencies are complying with the residency requirement. This is particularly challenging when agencies have multiple programs in different counties, as it can create some ambiguity regarding the allocation of reimbursements. The primary risk stemming from these findings is the potential for misallocation of County funds due to inadequate verification of residency status. Without proper documentation and verification, there is a heightened risk of inaccuracies in reimbursement requests and improper use of public funds. Recommendation To address the identified issues and enhance compliance with residency verification requirements, we recommend that Human Services: • Implement a Documentation Process for Internal Verifications: As part of their quarterly monitoring processes, the auditee should document a checklist or similar tool that outlines the internal verification steps taken to ensure compliance with residency requirements. This checklist should be comprehensive and include specific details about the verification process for each program and county receiving services. • Ensure Third-Party Reviewability: The documented checklist should be made available for review by third-party auditors to verify that the internal verifications are being completed as described. This process will provide transparency and ensure that the internal monitoring activities are being reviewed by the appropriate parties.
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