Finding # 2022-002 Program - Various, including AL 20.509 ? Formula Grants for Rural Areas ? Reporting Grant Number & Year - Various Federal Grantor Agency -Various, including U.S. Department of Transportation Pass-Through Entity -Various, including Nebraska Department of Transportation Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) ? 200.510(b) (January 1, 2022) states, in part, the following: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. Title 2 CFR ? 200.302(b) (January 1, 2022) states, in relevant part, the following: The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. On January 18, 2020, the Office of Management and Budget (OMB) issued Memorandum M-20-26, which included the following requirement to identify separately COVID-19 Emergency Acts expenditures on the Schedule of Expenditures of Federal Awards. Additionally, in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify COVID-19 Emergency Acts expenditures on the Schedule of Federal Awards and audit report findings. Title 2 CFR ? 200.303 (January 1, 2022) states the following, in relevant part: The non-Federal entity must: (a) 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). A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures Federal Awards (SEFA) is properly presented and includes all Federal expenditures made by the County during the fiscal year, including properly identifying COVID-19 expenditures. Furthermore, such internal control plan should also include procedures to ensure Federal reimbursements are properly recorded using a Federal revenue code in the County?s accounting system. Condition -Kimball County does not have adequate procedures in place to ensure the Schedule of Expenditures of Federal Awards (SEFA) is completed accurately and includes all Federal expenditures paid by the County. Specifically, we noted the following errors during our audit: ?Expenditures of $32,031 for Assistance Listing 20.509 were omitted from the County?s fiscal year ending June 30, 2021, SEFA. This was not considered a material error, and it would not have impacted major program determination for the fiscal year 2021 audit. ?Expenditures for fiscal year 2022, originally reported by Kimball County for Assistance Listing 20.509, did not include expenditures of $5,310 actually incurred during the fiscal year. ?Expenditures originally reported by Kimball County for Assistance Listing 20.509 did not identify $55,464 of COVID-19 expenditures separately. ?Federal reimbursements, totaling $23,719, were not recorded to a Federal revenue code in the County?s accounting system. Instead, this funding was recorded to a miscellaneous revenue code. Repeat Finding -No Questioned Costs - None Statistical Sample -No Cause - Administration of Federal awards is decentralized, with each County office operating independently without any centralized reporting procedures in place to ensure all Federal expenditures of the County are accurately reported on the SEFA. Additionally, there is an overall lack of knowledge by County personnel related to Federal reporting and compliance requirements. Effect -Increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions or failure to audit programs that should be audited. Recommendation -We recommend the County establish written procedures to ensure the SEFA is complete and accurate. Such procedures may include, among other things, a requirement that all offices in the County responsible for administering Federal grants report their grant expenditures, as well as related information, to a single individual in the County with overall responsibility for Federal reporting requirements. That individual should be knowledgeable of all Federal reporting and compliance requirements, and review expenditures provided by each office to ensure all amounts are accurate and include all Federal expenditures of the County. View of Officials -Moving forward the transit office will implement a policy and get training to ensure compliance.
Finding # 2022-002 Program - Various, including AL 20.509 ? Formula Grants for Rural Areas ? Reporting Grant Number & Year - Various Federal Grantor Agency -Various, including U.S. Department of Transportation Pass-Through Entity -Various, including Nebraska Department of Transportation Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) ? 200.510(b) (January 1, 2022) states, in part, the following: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. Title 2 CFR ? 200.302(b) (January 1, 2022) states, in relevant part, the following: The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. On January 18, 2020, the Office of Management and Budget (OMB) issued Memorandum M-20-26, which included the following requirement to identify separately COVID-19 Emergency Acts expenditures on the Schedule of Expenditures of Federal Awards. Additionally, in order to provide adequate oversight of the COVID-19 Emergency Acts funding and programs, recipients and subrecipients must separately identify COVID-19 Emergency Acts expenditures on the Schedule of Federal Awards and audit report findings. Title 2 CFR ? 200.303 (January 1, 2022) states the following, in relevant part: The non-Federal entity must: (a) 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). A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures Federal Awards (SEFA) is properly presented and includes all Federal expenditures made by the County during the fiscal year, including properly identifying COVID-19 expenditures. Furthermore, such internal control plan should also include procedures to ensure Federal reimbursements are properly recorded using a Federal revenue code in the County?s accounting system. Condition -Kimball County does not have adequate procedures in place to ensure the Schedule of Expenditures of Federal Awards (SEFA) is completed accurately and includes all Federal expenditures paid by the County. Specifically, we noted the following errors during our audit: ?Expenditures of $32,031 for Assistance Listing 20.509 were omitted from the County?s fiscal year ending June 30, 2021, SEFA. This was not considered a material error, and it would not have impacted major program determination for the fiscal year 2021 audit. ?Expenditures for fiscal year 2022, originally reported by Kimball County for Assistance Listing 20.509, did not include expenditures of $5,310 actually incurred during the fiscal year. ?Expenditures originally reported by Kimball County for Assistance Listing 20.509 did not identify $55,464 of COVID-19 expenditures separately. ?Federal reimbursements, totaling $23,719, were not recorded to a Federal revenue code in the County?s accounting system. Instead, this funding was recorded to a miscellaneous revenue code. Repeat Finding -No Questioned Costs - None Statistical Sample -No Cause - Administration of Federal awards is decentralized, with each County office operating independently without any centralized reporting procedures in place to ensure all Federal expenditures of the County are accurately reported on the SEFA. Additionally, there is an overall lack of knowledge by County personnel related to Federal reporting and compliance requirements. Effect -Increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions or failure to audit programs that should be audited. Recommendation -We recommend the County establish written procedures to ensure the SEFA is complete and accurate. Such procedures may include, among other things, a requirement that all offices in the County responsible for administering Federal grants report their grant expenditures, as well as related information, to a single individual in the County with overall responsibility for Federal reporting requirements. That individual should be knowledgeable of all Federal reporting and compliance requirements, and review expenditures provided by each office to ensure all amounts are accurate and include all Federal expenditures of the County. View of Officials -Moving forward the transit office will implement a policy and get training to ensure compliance.