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Investigating Allegations of Noncompliance and/or Misuse of Funds in the CACFP & SFSP

Investigating Allegations of Noncompliance and/or Misuse of Funds in the CACFP & SFSP. How the Investigation Affects the Administrative Hearing. MH Miles Company, CPA PC. Full service CPA firm Corporate Office in Decatur, GA Satellite office in Richmond, VA

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Investigating Allegations of Noncompliance and/or Misuse of Funds in the CACFP & SFSP

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  1. Investigating Allegations of Noncompliance and/or Misuse of Funds in the CACFP & SFSP How the Investigation Affects the Administrative Hearing 2012 CACFP National Professional Association Conference- Austin Texas

  2. MH Miles Company, CPA PC • Full service CPA firm • Corporate Office in Decatur, GA • Satellite office in Richmond, VA • MHM Financial Services - Washington DC 2012 CACFP National Professional Association Conference- Austin Texas

  3. Specialize in Compliance FEDERAL • Nutrition • Transportation • Equal Opportunity/ Civil Rights STATE Prekindergarten 2012 CACFP National Professional Association Conference- Austin Texas

  4. Nutrition – CACFP & SFSP • State Agencies • Complaint Investigations • Fraud Investigations • Agreed-upon Procedure Reviews • Staff Augmentation • Policy & Procedure Development • Internal/External Audit Services • Budget Reviews • VCA Analysis 2012 CACFP National Professional Association Conference- Austin Texas

  5. Nutrition – CACFP & SFSP • Sponsors • OMB Circular A-133 audits • Management Studies • Programmatic Audits • Compliance Monitoring • Management Plan Evaluation • Policy & Procedure Development • Accounting System Set-up 2012 CACFP National Professional Association Conference- Austin Texas

  6. Objectives • Documenting the Complaint/Allegation • Assessing the allegation(s) • Planning the engagement • Fieldwork • Techniques for Investigating Common Schemes • Reporting • Affects on the Administrative Hearing Process 2012 CACFP National Professional Association Conference- Austin Texas

  7. Looking at the Big Picture 2012 CACFP National Professional Association Conference- Austin Texas

  8. Who files Complaints? 2012 CACFP National Professional Association Conference- Austin Texas

  9. WHISTLEBLOWERS • Program Beneficiaries • Parents/Guardians • Caregivers • Employees • Agency • Sub-recipients • General Public • Vendors 2012 CACFP National Professional Association Conference- Austin Texas

  10. Documenting the Complaint/Allegation 2012 CACFP National Professional Association Conference- Austin Texas

  11. Documentation Process Capture Pertinent Information • Who received the complaint • Date Received • How the complaint was received • Written • Email • Letter • Recorded • Voicemail • Live • Telephone call • Interview in person • Does complainant want to remain anonymous? 2012 CACFP National Professional Association Conference- Austin Texas

  12. Documentation Process Documenting the actual complaint • Written or Recorded • Verbatim • Live / complainant doesn’t want to be anonymous • Verbatim • Clarity 2012 CACFP National Professional Association Conference- Austin Texas

  13. Helpful Words & Phrases I understand……… REALLY? What would happen when…? Thank you If anything else comes to mind… 2012 CACFP National Professional Association Conference- Austin Texas

  14. Organizing the Information What is being communicated Side bar thoughts What they didn’t say….. What other areas are impacted? Follow-up questions • What is actually being said? • Supporting documentation available? • Keep the complainant on track 2012 CACFP National Professional Association Conference- Austin Texas

  15. Documentation Process • Compiling the information • Assign a tracking number • Categorizing the Complaint 2012 CACFP National Professional Association Conference- Austin Texas

  16. Documentation Process C 2012-06178-01 - A Complaint Category Identifying Number Complaint Sequence in the year Year 2012 CACFP National Professional Association Conference- Austin Texas

  17. Assessing the Allegation(s) • Group allegation(s) in bite size subcategories 1st onface value then by noncompliance • Additional Observations • Committee for feedback • Next Steps 2012 CACFP National Professional Association Conference- Austin Texas

  18. USDA OIG Complaint Hotline Categories 2012 CACFP National Professional Association Conference- Austin Texas

  19. FY2010 – FY2011USDA-OIG Semiannual Report to Congress 2012 CACFP National Professional Association Conference- Austin Texas

  20. 2012 CACFP National Professional Association Conference- Austin Texas

  21. Planning the Engagement InvestigationReview Plan • Review Tools • Staffing Considerations • Scope • Determine Necessary Documents • Develop Interview List • Fieldwork- Action Plan • Timeline 2012 CACFP National Professional Association Conference- Austin Texas

  22. Review Tools • Review Reports & Management Plan • Interviews • Observations • Program Documentation • Independent Research • Supplies 2012 CACFP National Professional Association Conference- Austin Texas

  23. Staffing Considerations • Specific Experience • Independent • Coverage & Resources 2012 CACFP National Professional Association Conference- Austin Texas

  24. Scope & Timeline • Clear & Concise • Regulatory Compliance • Subject to Change • Documentation for Review • Interview List • Develop an initial timeline 2012 CACFP National Professional Association Conference- Austin Texas

  25. Action Plan • Start Big • Drill Down 2012 CACFP National Professional Association Conference- Austin Texas

  26. Fieldwork • Entrance Conference • Document Request • Tour 2012 CACFP National Professional Association Conference- Austin Texas

  27. Interviews& Observations Interview Methodology: • Telephone Interview • Quick • No Travel • Record • Ability to record (State) • Less intimidating • In-person Interview • Observe reactions to questions • Questionnaire 2012 CACFP National Professional Association Conference- Austin Texas

  28. Interview Objectives • Gather information related to the allegations • Identify possible “leads” to support/refute allegations 2012 CACFP National Professional Association Conference- Austin Texas

  29. Interview Techniques • Develop an Interview Plan • Start with easy questions • Build rapport • Relax • Identify relationships • Be prepared • Private/Confidential • Choose your words wisely 2012 CACFP National Professional Association Conference- Austin Texas

  30. Interview Techniques • Observe body language • Pose open & close ended questions • LISTEN • What is said • What is not said • Take Notes- not dictation • Show documentation where applicable 2012 CACFP National Professional Association Conference- Austin Texas

  31. Red Flags • Information changes • No eye contact • Long pauses 2012 CACFP National Professional Association Conference- Austin Texas

  32. Document Analysis Techniques • Horizontal & Vertical Analysis of Information • Signatures • Dates & Times • Transactions • Formatting • Verifying item codes 2012 CACFP National Professional Association Conference- Austin Texas

  33. Techniques for Common Program Schemes Inflated Meal Counts • Assess knowledge of sponsored facilities • Confirm affiliated/unaffiliated sites • Flux analysis of meals by type/site • Observe behavior 2012 CACFP National Professional Association Conference- Austin Texas

  34. Techniques for Common Program Schemes Inflated Meal Counts • Open Sites- #of meals delivered = # of meals served 100% • Simultaneous Reviews (open site & central kitchen) • Arrive early & engage participants • Observe behavior • Test Leftover meal practice 2012 CACFP National Professional Association Conference- Austin Texas

  35. Techniques for Common Program Schemes Falsified labor documentation • Review standardized forms by individual • Record transaction number by vendor/date/total • Be familiar with other programs Duplication of Costs • Record transaction number by vendor/date/total • Be familiar with other programs Other Unallowable Costs • Cost of Ownership between organizations under common control 2012 CACFP National Professional Association Conference- Austin Texas

  36. Reporting • Status Reports • Draft Report • Final Report • Findings of noncompliance • Recommendations for oversight 2012 CACFP National Professional Association Conference- Austin Texas

  37. Administrative Hearing • Methodology and Results are relied upon to determine how to move forward • Notes and emails related to investigation may be requested • Weakest Evidence is anything than can be contradicted • Anyone who has touched the investigation is a potential witness 2012 CACFP National Professional Association Conference- Austin Texas

  38. Ideal Witness • Education/Training/ Experience in the area • Knowledge of the investigation • Testified in other cases & courts have relied on information presented • 13 Tips 2012 CACFP National Professional Association Conference- Austin Texas

  39. 2012 CACFP National Professional Association Conference- Austin Texas

  40. Questions Cherese Myree, CFE Vice President, MH Miles Company, CPA PC (404) 633-4555 cmyree@mhm-cpa.com 2012 CACFP National Professional Association Conference- Austin Texas

  41. Thank You! 2012 CACFP National Professional Association Conference- Austin Texas

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