Finding 2022-002 ? Allowable Costs/Cost Principles Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A ? Direct Program Award Year: Fiscal Year 2021-2022 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $376,777 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testing of expenditures charged to the program, we noted one payment in the amount of $494,988 for emergency rental assistance; the amount was a supplemental payment for the month of September 2021 and, based on the invoices provided, the amount should have been $118,211. Cause of Condition The County?s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are accurate and allowable. The supplemental amount was incorrectly calculated based on a prior processed payment for August 2021 instead of September 2021. Repeat Finding No. Effect of Condition The County is not in compliance with the allowable cost/cost principles requirements related to the program. Recommendation We recommend that the County adhere to its payment procedures and review invoices and other related source documents for completeness, reasonableness, and accuracy. We also recommend the County ensure that source documents match the payment document and that supervisors review payment 19 documents for accuracy and match pertinent information with invoice, contract, and other related payment source documents with the PeopleSoft voucher that was created. Management Response and Corrective Action Plan The County issued reimbursement based on actuals. The voucher created by the department was for $494,988 and the County reimbursed this amount back to the department. ARPA over claiming started with the payment of the supplemental September 21 invoice that was miscalculated by reducing the Revised September 21 invoice with the Original August 21 invoice, instead of the Original September 21 invoice. This miscalculation was not immediately recognized when the supplemental payment was paid in November 2021. The need to return funds to ARPA was recognized after the DSS Admin completed a reconciliation at end of 2022. This was communicated to DSS Finance in January 2023, thus the discussion between DSS Finance and DSS Admin to finalize the amount. DSS is already in the process of finalizing the amount that needs to be returned to the County ARPA funds. For the corrective action, DSS will be submitting a memo signed by the DSS Director addressed to the CAO for the return of $376,777 to the County ARPA funds.
Finding 2022-003 ? Subrecipient and Contractor Determinations Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A ? Direct Program Award Year: Fiscal Year 2021-2022 Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per ?200.331, a pass-through entity (the County) must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. A pass-through entity (the County) with subrecipients is required to evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Depending upon the pass-through entity?s assessment of risk posed by the subrecipient, the entity must develop techniques/tools to ensure proper accountability and compliance with program requirements and achievement of performance goals by the subrecipient. Condition During our testing of compliance with the subrecipient monitoring requirement, we noted that the County did not have formal, written subrecipient monitoring policies or procedures in place, as the Subrecipient Monitoring Policy document was adopted on June 21, 2022. In addition, management did not conduct pre-award evaluations of whether the agreements made by the County for the disbursement of CSLFRF payments cast the party receiving the funds in the role of a subrecipient or contractor, as four out of four CSLFRF recipients were missing documentation regarding the characteristics which support the classifications and the judgments used to make such determinations. Also, the County did not evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. 20 Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under subrecipient monitoring. Repeat Finding No. Effect of Condition There is increased risk of noncompliance with the subrecipient monitoring requirement as set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Failure to perform a comprehensive risk assessment prior to executing subaward agreements may result in an incomplete understanding of a subrecipient?s risk profile, and insufficient monitoring or only relying on self-reporting can allow certain risks to go unaddressed and lead to noncompliance with grant requirements. In addition, an incorrect determination could have a significant impact on whether the party receiving federal funds is required to have an audit. Recommendation We recommend the County design and implement internal control activities over the subrecipient monitoring compliance requirement under the Uniform Guidance. We also recommend the County establish policies and procedures, especially documentation requirements, to make pre-award determinations of whether each agreement it makes for the disbursement of Federal award funds casts the party receiving the funds in the role of a subrecipient or a contractor. In addition, we recommend the County implement a training program for all staff directly involved in the administration of Federal award funds to become knowledgeable of the cost principles and requirements under the Uniform Guidance. Management Response and Corrective Action Plan Management agrees with the findings and has provided the following corrective action plan. 1. County will assess existing policies, design, and implement additional internal control activities over the subrecipients to improve monitoring compliance requirements under the Uniform Guidance. 2. County will establish policies and procedures to document pre-award determinations of whether each agreement it makes for the disbursement of Federal award funds casts the party receiving the funds in the role of a subrecipient or a contractor. 3. County will implement a training program for all staff directly involved in the administration of Federal award funds to become knowledgeable of the cost principles and requirements under the Uniform Guidance.
Finding 2022-004 ? Reporting Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing No.: 93.323 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Public Health (CDPH) Award Year: Fiscal Year 2021-2022 Compliance Requirement: Reporting Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that 21 provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a subrecipient of the COVID-19 ELC funding, the Centers for Disease and Control Prevention (CDC) requires timely submission of quarterly progress reports, quarterly expenditure reports, and monthly expenditure reports to the pass-through entity, CDPH. Condition During our testing of compliance with the reporting requirement, we selected two quarterly progress reports, two quarterly expenditure reports, and two monthly reports, and noted that the County did not submit the six required reports on a timely basis. Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under reporting requirements. Repeat Finding No. Effect of Condition The County did not comply with ELC reporting requirements. Recommendation We recommend the County design and implement proper internal control activities over the reporting compliance requirement to ensure fiscal accountability and reporting requirements are met in a timely manner. Management Response and Corrective Action Plan The quarterly reports were managed under Department administration resources during the COVID pandemic response. During this time there were significant vacancies with the Department and consistent turnover that required for staff to be constantly retrained in their duties. As Department administration was able to stabilize its resources the analyst compiling the information from multiple divisions still had the challenge of managing the collection of responses with a highly impacted department staff. The department administration analyst leading the compiling of the information for ELC quarterly reports was also assisting with COVID response duties in ensuring contracts and resources were in place to maintain or adjust COVID response resources. In addition, there was significant turnover and addition of staff at the State level that didn?t allow for timely responses to local inquiries that affect contract management and report. After the stabilization of the workforce at both levels there has been significant improvement in meeting timelines.
Finding 2022-004 ? Reporting Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing No.: 93.323 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Public Health (CDPH) Award Year: Fiscal Year 2021-2022 Compliance Requirement: Reporting Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that 21 provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a subrecipient of the COVID-19 ELC funding, the Centers for Disease and Control Prevention (CDC) requires timely submission of quarterly progress reports, quarterly expenditure reports, and monthly expenditure reports to the pass-through entity, CDPH. Condition During our testing of compliance with the reporting requirement, we selected two quarterly progress reports, two quarterly expenditure reports, and two monthly reports, and noted that the County did not submit the six required reports on a timely basis. Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under reporting requirements. Repeat Finding No. Effect of Condition The County did not comply with ELC reporting requirements. Recommendation We recommend the County design and implement proper internal control activities over the reporting compliance requirement to ensure fiscal accountability and reporting requirements are met in a timely manner. Management Response and Corrective Action Plan The quarterly reports were managed under Department administration resources during the COVID pandemic response. During this time there were significant vacancies with the Department and consistent turnover that required for staff to be constantly retrained in their duties. As Department administration was able to stabilize its resources the analyst compiling the information from multiple divisions still had the challenge of managing the collection of responses with a highly impacted department staff. The department administration analyst leading the compiling of the information for ELC quarterly reports was also assisting with COVID response duties in ensuring contracts and resources were in place to maintain or adjust COVID response resources. In addition, there was significant turnover and addition of staff at the State level that didn?t allow for timely responses to local inquiries that affect contract management and report. After the stabilization of the workforce at both levels there has been significant improvement in meeting timelines.
Finding 2022-002 ? Allowable Costs/Cost Principles Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A ? Direct Program Award Year: Fiscal Year 2021-2022 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $376,777 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testing of expenditures charged to the program, we noted one payment in the amount of $494,988 for emergency rental assistance; the amount was a supplemental payment for the month of September 2021 and, based on the invoices provided, the amount should have been $118,211. Cause of Condition The County?s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are accurate and allowable. The supplemental amount was incorrectly calculated based on a prior processed payment for August 2021 instead of September 2021. Repeat Finding No. Effect of Condition The County is not in compliance with the allowable cost/cost principles requirements related to the program. Recommendation We recommend that the County adhere to its payment procedures and review invoices and other related source documents for completeness, reasonableness, and accuracy. We also recommend the County ensure that source documents match the payment document and that supervisors review payment 19 documents for accuracy and match pertinent information with invoice, contract, and other related payment source documents with the PeopleSoft voucher that was created. Management Response and Corrective Action Plan The County issued reimbursement based on actuals. The voucher created by the department was for $494,988 and the County reimbursed this amount back to the department. ARPA over claiming started with the payment of the supplemental September 21 invoice that was miscalculated by reducing the Revised September 21 invoice with the Original August 21 invoice, instead of the Original September 21 invoice. This miscalculation was not immediately recognized when the supplemental payment was paid in November 2021. The need to return funds to ARPA was recognized after the DSS Admin completed a reconciliation at end of 2022. This was communicated to DSS Finance in January 2023, thus the discussion between DSS Finance and DSS Admin to finalize the amount. DSS is already in the process of finalizing the amount that needs to be returned to the County ARPA funds. For the corrective action, DSS will be submitting a memo signed by the DSS Director addressed to the CAO for the return of $376,777 to the County ARPA funds.
Finding 2022-003 ? Subrecipient and Contractor Determinations Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A ? Direct Program Award Year: Fiscal Year 2021-2022 Compliance Requirement: Subrecipient Monitoring Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per ?200.331, a pass-through entity (the County) must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. A pass-through entity (the County) with subrecipients is required to evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Depending upon the pass-through entity?s assessment of risk posed by the subrecipient, the entity must develop techniques/tools to ensure proper accountability and compliance with program requirements and achievement of performance goals by the subrecipient. Condition During our testing of compliance with the subrecipient monitoring requirement, we noted that the County did not have formal, written subrecipient monitoring policies or procedures in place, as the Subrecipient Monitoring Policy document was adopted on June 21, 2022. In addition, management did not conduct pre-award evaluations of whether the agreements made by the County for the disbursement of CSLFRF payments cast the party receiving the funds in the role of a subrecipient or contractor, as four out of four CSLFRF recipients were missing documentation regarding the characteristics which support the classifications and the judgments used to make such determinations. Also, the County did not evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. 20 Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under subrecipient monitoring. Repeat Finding No. Effect of Condition There is increased risk of noncompliance with the subrecipient monitoring requirement as set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Failure to perform a comprehensive risk assessment prior to executing subaward agreements may result in an incomplete understanding of a subrecipient?s risk profile, and insufficient monitoring or only relying on self-reporting can allow certain risks to go unaddressed and lead to noncompliance with grant requirements. In addition, an incorrect determination could have a significant impact on whether the party receiving federal funds is required to have an audit. Recommendation We recommend the County design and implement internal control activities over the subrecipient monitoring compliance requirement under the Uniform Guidance. We also recommend the County establish policies and procedures, especially documentation requirements, to make pre-award determinations of whether each agreement it makes for the disbursement of Federal award funds casts the party receiving the funds in the role of a subrecipient or a contractor. In addition, we recommend the County implement a training program for all staff directly involved in the administration of Federal award funds to become knowledgeable of the cost principles and requirements under the Uniform Guidance. Management Response and Corrective Action Plan Management agrees with the findings and has provided the following corrective action plan. 1. County will assess existing policies, design, and implement additional internal control activities over the subrecipients to improve monitoring compliance requirements under the Uniform Guidance. 2. County will establish policies and procedures to document pre-award determinations of whether each agreement it makes for the disbursement of Federal award funds casts the party receiving the funds in the role of a subrecipient or a contractor. 3. County will implement a training program for all staff directly involved in the administration of Federal award funds to become knowledgeable of the cost principles and requirements under the Uniform Guidance.
Finding 2022-004 ? Reporting Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing No.: 93.323 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Public Health (CDPH) Award Year: Fiscal Year 2021-2022 Compliance Requirement: Reporting Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that 21 provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a subrecipient of the COVID-19 ELC funding, the Centers for Disease and Control Prevention (CDC) requires timely submission of quarterly progress reports, quarterly expenditure reports, and monthly expenditure reports to the pass-through entity, CDPH. Condition During our testing of compliance with the reporting requirement, we selected two quarterly progress reports, two quarterly expenditure reports, and two monthly reports, and noted that the County did not submit the six required reports on a timely basis. Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under reporting requirements. Repeat Finding No. Effect of Condition The County did not comply with ELC reporting requirements. Recommendation We recommend the County design and implement proper internal control activities over the reporting compliance requirement to ensure fiscal accountability and reporting requirements are met in a timely manner. Management Response and Corrective Action Plan The quarterly reports were managed under Department administration resources during the COVID pandemic response. During this time there were significant vacancies with the Department and consistent turnover that required for staff to be constantly retrained in their duties. As Department administration was able to stabilize its resources the analyst compiling the information from multiple divisions still had the challenge of managing the collection of responses with a highly impacted department staff. The department administration analyst leading the compiling of the information for ELC quarterly reports was also assisting with COVID response duties in ensuring contracts and resources were in place to maintain or adjust COVID response resources. In addition, there was significant turnover and addition of staff at the State level that didn?t allow for timely responses to local inquiries that affect contract management and report. After the stabilization of the workforce at both levels there has been significant improvement in meeting timelines.
Finding 2022-004 ? Reporting Program: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing No.: 93.323 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Public Health (CDPH) Award Year: Fiscal Year 2021-2022 Compliance Requirement: Reporting Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that 21 provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). As a subrecipient of the COVID-19 ELC funding, the Centers for Disease and Control Prevention (CDC) requires timely submission of quarterly progress reports, quarterly expenditure reports, and monthly expenditure reports to the pass-through entity, CDPH. Condition During our testing of compliance with the reporting requirement, we selected two quarterly progress reports, two quarterly expenditure reports, and two monthly reports, and noted that the County did not submit the six required reports on a timely basis. Cause of Condition The County?s existing internal control system is not properly designed to meet the control objectives under reporting requirements. Repeat Finding No. Effect of Condition The County did not comply with ELC reporting requirements. Recommendation We recommend the County design and implement proper internal control activities over the reporting compliance requirement to ensure fiscal accountability and reporting requirements are met in a timely manner. Management Response and Corrective Action Plan The quarterly reports were managed under Department administration resources during the COVID pandemic response. During this time there were significant vacancies with the Department and consistent turnover that required for staff to be constantly retrained in their duties. As Department administration was able to stabilize its resources the analyst compiling the information from multiple divisions still had the challenge of managing the collection of responses with a highly impacted department staff. The department administration analyst leading the compiling of the information for ELC quarterly reports was also assisting with COVID response duties in ensuring contracts and resources were in place to maintain or adjust COVID response resources. In addition, there was significant turnover and addition of staff at the State level that didn?t allow for timely responses to local inquiries that affect contract management and report. After the stabilization of the workforce at both levels there has been significant improvement in meeting timelines.