Audit 14118

2022-001 The County’s internal controls were inadequate for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: 202105020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. In 2022, the County spent about $8.67 million in program funds for these activities. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended or debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification . from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking the System for Award Management (SAM.gov) for exclusion records. The County must perform this verification before awarding the contract, or paying the contractor more than $25,000 , and it must keep documentation demonstrating compliance with this federal requirement. The County has a process in place to verify the suspension and debarment status of contractors that are paid more than $25,000. However, the County entered into one new contract in 2022 and paid the contractor more than $25,000 for computer equipment, but did not follow itsthis established process to verify the contractor’s status. for two one new contracts entered into and paid with SLFRF funds. The first contract was for a lease agreement that was utilized by the Attorney’s Office to work through the criminal backlog that accumulated during the pandemic. The second contract was for the purchase of computer equipment using a contract awarded by another government, a process commonly referred to as “piggybacking.” We consider this deficiency in internal controls to be a material weakness, which led to noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition When the County entered into the lease agreement, it did not use its standard contract template, which includes suspension and debarment language in the contract. The County purchased the equipment from another government’s contract, which is a process commonly referred to as “piggybacking.”, and County staff responsible for the purchase When the County purchased through piggybacking, it did not further check the suspension and debarment status of the contractor, as the next tieruse its standard procurement checklist or include suspension and debarment language in the contract. Instead, the County relied on the awarding agency’s suspension and debarment verification to ensure compliance with this requirement. By relying on the piggybackingpiggybackingthe awarding agency, the County staff did not follow the County’sir standard procedure of checklist control step of either checking the SAM.gov certification or including the clause in the contract, which is required whenever entering into this type of transaction. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check for exclusion records to verify the two new contractors it paid with SLFRF funds wasere not suspended or debarred. The County paid $93,61527,000 to theseto this contractors. Without adequate internal controls, the County cannot ensure the contractors paid with federal funds are is eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the federal grantor could potentially recover them. During the audit, we verified the contractors were was not suspended or debarred, so . Therefore, we are not questioning costs for these payments.   Recommendation We recommend the County strengthen its internal controls to ensure it verifies that y all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred. We also recommend the County establish a process to ensure it verifies the suspension and debarment status of contractors it purchases from when using piggybacking to purchase from them. County’s Response We acknowledge this error. In the future we will ensure we check for vendor debarment when piggybacking on another entity’s bid for purchases that utilize federal funds. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines on Agencies on Governmentwide Department and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-001 The County’s internal controls were inadequate for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: 202105020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. In 2022, the County spent about $8.67 million in program funds for these activities. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended or debarred or otherwise excluded. The County may accomplish this verification by collecting a written certification . from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking the System for Award Management (SAM.gov) for exclusion records. The County must perform this verification before awarding the contract, or paying the contractor more than $25,000 , and it must keep documentation demonstrating compliance with this federal requirement. The County has a process in place to verify the suspension and debarment status of contractors that are paid more than $25,000. However, the County entered into one new contract in 2022 and paid the contractor more than $25,000 for computer equipment, but did not follow itsthis established process to verify the contractor’s status. for two one new contracts entered into and paid with SLFRF funds. The first contract was for a lease agreement that was utilized by the Attorney’s Office to work through the criminal backlog that accumulated during the pandemic. The second contract was for the purchase of computer equipment using a contract awarded by another government, a process commonly referred to as “piggybacking.” We consider this deficiency in internal controls to be a material weakness, which led to noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition When the County entered into the lease agreement, it did not use its standard contract template, which includes suspension and debarment language in the contract. The County purchased the equipment from another government’s contract, which is a process commonly referred to as “piggybacking.”, and County staff responsible for the purchase When the County purchased through piggybacking, it did not further check the suspension and debarment status of the contractor, as the next tieruse its standard procurement checklist or include suspension and debarment language in the contract. Instead, the County relied on the awarding agency’s suspension and debarment verification to ensure compliance with this requirement. By relying on the piggybackingpiggybackingthe awarding agency, the County staff did not follow the County’sir standard procedure of checklist control step of either checking the SAM.gov certification or including the clause in the contract, which is required whenever entering into this type of transaction. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check for exclusion records to verify the two new contractors it paid with SLFRF funds wasere not suspended or debarred. The County paid $93,61527,000 to theseto this contractors. Without adequate internal controls, the County cannot ensure the contractors paid with federal funds are is eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the federal grantor could potentially recover them. During the audit, we verified the contractors were was not suspended or debarred, so . Therefore, we are not questioning costs for these payments.   Recommendation We recommend the County strengthen its internal controls to ensure it verifies that y all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred. We also recommend the County establish a process to ensure it verifies the suspension and debarment status of contractors it purchases from when using piggybacking to purchase from them. County’s Response We acknowledge this error. In the future we will ensure we check for vendor debarment when piggybacking on another entity’s bid for purchases that utilize federal funds. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines on Agencies on Governmentwide Department and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.

2022-002 The County did not have adequate internal controls to ensurefor ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Grantor Name: Federal Emergency Management Agency, U.S. Department of Homeland Security Federal Award/Contract Number: FEMA-4539-DR-WA Pass-through Entity Name: WA Washington State Military Department Pass-through Award/Contract Number: D20-2069 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Disaster Grants- – Public Assistance (PA) program helps state, tribal and local governments pay for their response to and recovery from disasters. Following a pPresidential declaration of a major disaster or an emergency, the Federal Emergency Management Agency (FEMA) provides program funds supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the restoration of disaster-damaged facilities owned by states, municipalities, tribes and certain private nonprofit organizations. In Washington, the PA program agency is the Military Department (Department). In 2022, the County spent $3,329,662 in program PA funds. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Federal regulations require the County to submit qThe County must comply with the following PA requirement for reporting: Quarterly Performance Reporting Quarterly progress reports are due from recipients onfor all open large projects within 30 days after the end of each calendar quarter. FEMA defines a large project as "“a project for which the final obligated (federal and nonfederal) amount is equal to or greater than the annually adjusted cost threshold for small project grants.” In 2022, the threshold for large projects was $139,800." The County is required to submit to the Department a quarterly report indicating the status of all their large projects. The reports shall status shall identify the costs incurred to date, the percentage of work completed, the anticipated completion date of the project and whether cost under runs or over runs are expected. In addition, the County should note in the comment field any challenges or issues associated with the project. Failure to submit a complete quarterly report within 15 days following the end of the quarter will result in suspension of all payments to the County until a complete quarterly report is received by the Department. The quarterly report will serve as the basis for any FEMA Office of Chief Financial Officer (OCFO) funds reduction. We found the County did not have a control in place have adequate controls in place and did not retain documentation showing it submitted six out of eight quarterly reports due to FEMA for two large projects in 2022 to the awarding agency. to ensure all quarterly performance reports were retained. As a result, we were unable to obtain sufficient appropriate audit evidence for six out of eight quarterly performance reports. We consider this control deficiency to be a material weakness that led to material noncompliance. This issue was not reported as a finding in the prior audit. Cause of Condition The County staff said indicated it did submit they submitted hardprinted copies of all required quarterly performance reports to the Departmentawarding agencyFEMA. H, however, due to staff turnover due tobecause of staff turnover and the fact that printed reports were submittedreports being submitted in hard copy form, the County staff were was unable to locate an auditable copycopies of the reports submitted to demonstrate compliance . Effect of Condition By not retaining copies of the quarterly performance reports, management was unable to demonstrate the information the County reported was complete, and accurate, andthe Countyit submitted them within the required timeframe. FEMA The grantor may withhold payment if it does not receive quarterly reports are not received within 30 days. We did not identify any withheld payments. Recommendation We recommend the County strengthen internal controls to ensure for ensuring it maintains documentation showing it submitted required quarterly reports to the awarding agency FEMA when dueand supporting documentation are retained. County’s Response We agree the County failed to retain the first three quarters of this report. Accounting staff identified this issue at year end, prior to our audit and this finding. Procedures were updated in time for our 2022 4th quarter reporting and going forward. Auditor’s Remarks We thank the County for its commitment to resolving this issue. We will follow up on the status of this finding during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11 . Title 44 CFR section 206.204(f), Project Performance, states quarterly progress reports are required to be submitted for large projects. 2 CFR Part 200, Appendix XI, April 2022 Compliance Supplement, Part 4 – Agency Program Requirements, 97.036-Disaster Grants-Public Assistance (Presidentially Declared Disasters), Reporting section describes the requirement for grantees to prepare quarterly progress reports on all open large projects 30 days after the end of each calendar quarter.