Audit 13148

2023-005 Federal Awarding Agency: Department of Agriculture Program title and ALN: Forest Schools and Roads Cluster, Title III, ALN #10.666 Compliance requirements applicable to finding: Reporting Findings: Material Weakness in Internal Control over Compliance of Major Programs Questioned Costs: We are reporting no questioned costs. Criteria: The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving Title III funds to submit to the Secretary of Agriculture an annual certification by February 1 for each calendar year that funds have been spent for authorized uses. The report is required to certify all expenditures under the Title III program. Condition and Context: During our review of the annual certification for calendar year 2022, we found the report was submitted after required deadlines and incorrectly reported the total expenditures of Title III funds. According to the general ledger, the county spent $139,982 of Title III funds in calendar year 2022. The certification reported total expenditures of $139,932. While differences identified in the 2022 certification were not deemed material to the major program, it was the result of missing all expenditures from Fund 142, the Forest Title III Fund for the third year in a row and the combination of reporting errors resulted in material noncompliance with the program. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: There is a lack of internal control over compliance related to reporting total Title III expenditures and the governing body in charge of ensuring compliance took limited responsibility in ensuring the report was submitted timely or accurately. Effect: The effect was noncompliance with reporting requirements. Recommendations: It is recommended that the county implement secondary review procedures prior to submission of the certification to the Secretary of Agriculture. We also recommend the responsible officials providing approval over the certification acquire proficiencies with the general ledger software and its reporting to identify accurate information for reporting and take responsibility to ensure timely completion of the reporting requirements. Views of responsible officials and planned corrective actions: A County Court member will meet with the contractor providing Title III services to discuss corrective action regarding timely completion of reporting and meeting reporting requirements.

2023-006 Federal Awarding Agency: Department of the Treasury Program title and ALN: Coronavirus State and Local Fiscal Recovery Funds #21.027 126 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2023 Compliance requirements applicable to finding: Activities Allowed or Unallowed Findings: Other findings disclosed in accordance with 2 CFR 200.516(a) Questioned Costs: $90,122 in known questioned costs related to the non-major federal program Criteria: The county spent $90,122 in Coronavirus State and Local Fiscal Recovery Funds on the remodel of a county building planned to materially be used for the new offices of the county’s emergency management department. Coronavirus State and Local Fiscal Recovery Funds under ALN #21.027 are required to be spent on projects that directly respond to the public health and negative economic impacts of the COVID-19 pandemic. Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not be considered a response to the public health emergency and its negative economic impacts unless the project responds to a specific pandemic-related public health need (e.g., investments in facilities for the delivery of vaccines) or a specific negative economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract). The emergency management department does not fit these criteria, which means this remodel project is an unallowed cost. Condition and Context: As a result of following up on prior year findings reported on the Schedule of Findings and Questioned Costs for the year ended June 30, 2022, significant transactions were identified that directly relate to noncompliance over the federal program that occurred during the June 30, 2023, fiscal year. These transactions were not tested as a major program during the 2023 fiscal year and were not subject to current year auditing procedures; however, noncompliance and known questioned costs were identified that met requirements for disclosure. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: Unfamiliarity with program requirements from those accumulating and tracking costs charged to the program and lack of knowledgeable oversight over the program was a significant cause for these findings. The county lacked internal controls to ensure expenditures reimbursed through the program met compliance requirements. Effect: Known questioned costs related to the compliance of federal programs in the amount of $90,122 related to expenditures in the 2023 fiscal year were identified. Recommendation: We recommend the county adopt formal policies to address transactional compliance over grant awards. Given the volume of grant activity, identifying a grant compliance officer with the requisite experience in program compliance monitoring should be an included control. The current general ledger system has historically been sufficient to address the appropriate segregation and tracking of individual awards but has been used inappropriately to be implemented as a control. Monitoring of controls over expenditures and grant award compliance should be implemented, and deviations from controls in place should be addressed timely. Views of responsible officials and planned corrective actions: The County does not have available funding to hire a grant compliance officer, however, the County plans to seek training resources for current staff responsible for grant administration.

2023-005 Federal Awarding Agency: Department of Agriculture Program title and ALN: Forest Schools and Roads Cluster, Title III, ALN #10.666 Compliance requirements applicable to finding: Reporting Findings: Material Weakness in Internal Control over Compliance of Major Programs Questioned Costs: We are reporting no questioned costs. Criteria: The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving Title III funds to submit to the Secretary of Agriculture an annual certification by February 1 for each calendar year that funds have been spent for authorized uses. The report is required to certify all expenditures under the Title III program. Condition and Context: During our review of the annual certification for calendar year 2022, we found the report was submitted after required deadlines and incorrectly reported the total expenditures of Title III funds. According to the general ledger, the county spent $139,982 of Title III funds in calendar year 2022. The certification reported total expenditures of $139,932. While differences identified in the 2022 certification were not deemed material to the major program, it was the result of missing all expenditures from Fund 142, the Forest Title III Fund for the third year in a row and the combination of reporting errors resulted in material noncompliance with the program. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: There is a lack of internal control over compliance related to reporting total Title III expenditures and the governing body in charge of ensuring compliance took limited responsibility in ensuring the report was submitted timely or accurately. Effect: The effect was noncompliance with reporting requirements. Recommendations: It is recommended that the county implement secondary review procedures prior to submission of the certification to the Secretary of Agriculture. We also recommend the responsible officials providing approval over the certification acquire proficiencies with the general ledger software and its reporting to identify accurate information for reporting and take responsibility to ensure timely completion of the reporting requirements. Views of responsible officials and planned corrective actions: A County Court member will meet with the contractor providing Title III services to discuss corrective action regarding timely completion of reporting and meeting reporting requirements.

2023-006 Federal Awarding Agency: Department of the Treasury Program title and ALN: Coronavirus State and Local Fiscal Recovery Funds #21.027 126 GRANT COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2023 Compliance requirements applicable to finding: Activities Allowed or Unallowed Findings: Other findings disclosed in accordance with 2 CFR 200.516(a) Questioned Costs: $90,122 in known questioned costs related to the non-major federal program Criteria: The county spent $90,122 in Coronavirus State and Local Fiscal Recovery Funds on the remodel of a county building planned to materially be used for the new offices of the county’s emergency management department. Coronavirus State and Local Fiscal Recovery Funds under ALN #21.027 are required to be spent on projects that directly respond to the public health and negative economic impacts of the COVID-19 pandemic. Under 602(c)(1)(A) or 603(c)(1)(A), a general infrastructure project typically would not be considered a response to the public health emergency and its negative economic impacts unless the project responds to a specific pandemic-related public health need (e.g., investments in facilities for the delivery of vaccines) or a specific negative economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract). The emergency management department does not fit these criteria, which means this remodel project is an unallowed cost. Condition and Context: As a result of following up on prior year findings reported on the Schedule of Findings and Questioned Costs for the year ended June 30, 2022, significant transactions were identified that directly relate to noncompliance over the federal program that occurred during the June 30, 2023, fiscal year. These transactions were not tested as a major program during the 2023 fiscal year and were not subject to current year auditing procedures; however, noncompliance and known questioned costs were identified that met requirements for disclosure. Furthermore, recommendations made by auditors and plans of corrective action identified by management in prior years were insufficiently addressed. Cause: Unfamiliarity with program requirements from those accumulating and tracking costs charged to the program and lack of knowledgeable oversight over the program was a significant cause for these findings. The county lacked internal controls to ensure expenditures reimbursed through the program met compliance requirements. Effect: Known questioned costs related to the compliance of federal programs in the amount of $90,122 related to expenditures in the 2023 fiscal year were identified. Recommendation: We recommend the county adopt formal policies to address transactional compliance over grant awards. Given the volume of grant activity, identifying a grant compliance officer with the requisite experience in program compliance monitoring should be an included control. The current general ledger system has historically been sufficient to address the appropriate segregation and tracking of individual awards but has been used inappropriately to be implemented as a control. Monitoring of controls over expenditures and grant award compliance should be implemented, and deviations from controls in place should be addressed timely. Views of responsible officials and planned corrective actions: The County does not have available funding to hire a grant compliance officer, however, the County plans to seek training resources for current staff responsible for grant administration.