The auditors will take an exception on a case if the CAO applies incorrect DHS policy and procedure or if they discover previously unknown information which affects eligibility.
The auditors will determine all exceptions to be the result of either:
new information which was not found in the case record and which was obtained from the client or a collateral contact; or
record information which was found to be insufficient and/or in error.
Each exception will identify how the auditors obtained the information:
In the case record at the time of the review.
Should be in the case record, but missing at the time of the review.
During the interview with the client.
Documents.
Sources other than the client.
The auditor will indicate, on the AG 1, the specific source of information, the exception, and the reason for the exception.
The AG 1 identifies exceptions as follows:
Program - whether the error was in the Cash Assistance, SNAP, State Blind Pension, or Medical Assistance program.
Item - the specific item found to be in error.
Manual Reference - The specific policy or procedure citation which is the basis for the exception.
Nature and Reason - the exact error and the reason the item is in error.
The specific reason for an exception is indicated on the AG 1 in Section II, Eligibility Factors. The auditor will indicate, in each item, the program in which the error occurred.
The auditors will take an exception for the following reasons:
Forms - missing or incomplete forms required for a specific category.
Budget Group or Household - an error in the number of persons in the budget group or household, including the omission of mandatory budget group members. The auditor will also verify that the correct Family Size Allowance is being given.
Category - incorrect category.
Client's Responsibility - client failure to report changes in circumstances which affect current eligibility or the payment amount.
Overpayment - client is currently being or was overpaid.
Underpayment - client is currently being or was underpaid.
Income - the CAO is using incorrect income or applying income incorrectly.
Employment/Work Registration - either the client has not met employment requirements or the CAO has not enforced employment regulations.
Resources - the CAO indicated incorrect resources in the case record either because the CAO did not determine the value correctly or the client did not report the resource.
Special Items - the special allowance is an incorrect amount, is being given but not needed, or needed but not being given.
One-Time Issuances - An OTI was indicated but was not issued or was issued in error.
Redetermination/Recertification - action was not completed within the proper time frame.
Claim Settlement (OFAIR) - record indicates referral was warranted, but action was not taken or was not taken within the proper time frame.
Computation - actual figures used were incorrect or benefits were computed incorrectly.
Others - any other errors found in related policies and procedures. A completed explanation will be noted in Section II of the AG 1.
The auditors will classify an exception as either immediate or regular. This classification determines the time the CAO has to correct the error. Either an immediate or regular exception may also be a controversial exception.
An immediate exception is one in which:
the current benefit indicates an overpayment or underpayment;
the case record has an incorrect category;
the case has not been redetermined within the proper time frame;
fraud is suspected; or
documents are needed to verify information, such as when the information indicates an overpayment or underpayment.
The CAO will initiate action, such as scheduling a redetermination or sending an Advance Notice, immediately upon receipt of an immediate exception. The CAO will correct any error no later than the first regular payment day for which deadline can be met.
A regular exception is an error which does not involve:
an overpayment;
an underpayment;
an incorrect category;
an overdue redetermination; or
suspected fraud.
A regular exception must be corrected no later than 30 days after the date the exception was submitted.
A controversial exception may be either a regular or immediate exception, but is one in which the CAO disagrees with the auditor's finding.
The CAO will reply to each exception on the PA 157, and return it to the auditors. See Section 805.23, Corrective Action. The CAO may agree or disagree entirely or in-part with the exception. The CAO will indicate, on the PA 157, the specific items with which it agrees or disagrees.
After completion of the PA 157, the Executive Director, or delegate, and the Auditors will review the exceptions. Both parties will present supporting evidence to arrive at an agreement on the disposition of each exception.
NOTE: If the client gives conflicting information and the correct facts cannot be determined, both the CAO and auditors will interview the recipient.
Reminder: The CAO will not duplicate verification already obtained by the auditors, but it may seek clarification from the same source.
When an agreement has been reached concerning the disposition of an exception, the auditors and the Executive Director will complete, sign, and date the PA 157.
If the CAO agrees completely with an exception, it will take the necessary action to correct the error. If the CAO agrees with the exception in-part, it will take corrective action on the items with which it agrees. See Appendix A.
When there is a disagreement with an exception, the CAO will thoroughly explain and substantiate the reason for the disagreement in Section C of the PA 157. The CAO will specifically identify the following:
Program - the specific program involved in the exception, such as Cash Assistance, SNAP, or Medical Assistance.
Item - the item with which the CAO disagrees.
Manual Reference - the policy or procedure citation which substantiates the CAO's action and the basis for the disagreement.
Nature and Reason - the specific nature and reason given for the exception and the CAO's reason for disagreement.
If the auditors and the CAO cannot resolve an exception through mutual agreement, the auditors or CAO will request a policy clarification from DHS. The request will include both the CAO's position and the auditors' position.
If the auditors find that a client was ineligible for medical assistance benefits, the amount of any overpayment will depend on:
the amount of any patient pay liability; and
whether or not the ACCESS card was used fraudulently during the period of ineligibility.
The CAO cannot determine the amount of the claim, only that the client was eligible or ineligible.
When responding to an exception, the CAO will agree in-part, or disagree with the findings. If all information about the client's circumstances is available, including income, resources, and allowable medical expenses during the period in question, the CAO may agree that an overpayment occurred, but will neither agree nor disagree with the amount. The claim is computed by the Office of Fraud and Abuse Investigation and Recovery (OFAIR). The CAO will include a statement to this effect in the disagreement section of the PA 157.
If the exception suggests a potential overpayment, the CAO will agree that a potential overpayment exists and agree to investigate in the same way as if the potential overpayment had been discovered by the CAO.
The CAO may disagree totally with the findings by challenging the auditor's calculations.
Reissued October 9. 2012, replacing March 16, 2012