Finding 2022-006 – Lack of County-Wide Internal Controls Over Major Federal Program
Coronavirus State and Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring
QUESTIONED COSTS: $-0-
Condition: County-wide internal controls regarding Control Environment, Risk Assessment, Information
and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the
County complies with grant requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal
funds.
Recommendation: OSAI recommends the County implement a system of internal controls to ensure
compliance with grant requirements.
Management Response:
Chairman of the Board of County Commissioners: We will work to implement a Risk Assessment plan.
We will implement controls to help make sure we are in compliance with all grant requirements and federal
funds are expended in accordance with grant agreements and in a timely manner. We will ensure employees
have the current and correct compliance supplement to work from.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in
part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04
states in part:
Components, Principles, and Attributes
Control Environment - The foundation for an internal control system. It provides the
discipline and structure to help an entity achieve its objectives.
Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives.
This assessment provides the basis for developing appropriate risk responses.
Information and Communication - The quality information management and personnel
communicate and use to support the internal control system.
Monitoring - Activities management establishes and operates to assess the quality of
performance over time and promptly resolve the findings of audits and other reviews.
Finding 2022-007 – Lack of Internal Controls Over Major Federal Program Coronavirus State and
Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal
disbursements, we noted that the County has not established procedures to ensure compliance with the
following compliance requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles;
Period of Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition attributed to the noncompliance with grant requirements and could
result in a loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program
and implement internal control procedures to ensure compliance with requirements.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will work with
all County Officials to go over all grants and federal monies that the County receives to ensure that proper
internal controls are implemented.
Criteria: OMB 2 CFR 200, Subpart D. §_ .303(a) reads as follows:
Subpart D-Post Federal Award Requirements
§200.303 Internal Controls
The non-Federal entity 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). Further, accountability and stewardship should be overall goals in management's accounting of federal
funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to
grant contracts.
Finding 2022-013 – Lack of Internal Controls and Noncompliance with Reporting Requirements
Over Federal Grant Coronavirus State and Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Reporting
QUESTIONED COSTS: $-0-
Condition: The County has not established internal controls to ensure the correct expenditure category is
used for reporting payments to the grant administrative contractor. The quarterly reports improperly
classified payments totaling $147,883 to a contractor as a Revenue Replacement expense instead of using
the Administrative expense category.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements.
Recommendation: OSAI recommends the County gain an understanding of the requirements for this
program and implement internal controls to ensure compliance with these requirements.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will take
measures to ensure future compliance with all requirements of federal grants.
Criteria: Accountability and stewardship should be overall goals in management’s accounting of federal
funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to
grant contracts.
Title 2 CFR § 200.303 Internal Controls (a) reads as follows:
The non-Federal entity 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 theUnited States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as
follows:
All recipients of federal funds must complete financial, performance, and compliance
reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported
on a cash or accrual basis, as long as the methodology is disclosed and consistently applied.
Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1.
Your organization should appropriately maintain accounting records for compiling and
reporting accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, you organization needs to establish controls to ensure
completion and timely submission of all mandatory performance and/or compliance
reporting.
Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows:
The non-Federal entity must submit performance reports at the interval required by the
Federal awarding agency or pass-through entity to best inform improvements in program
outcomes and productivity. Intervals must be no less frequent than annually nor more
frequent than quarterly except in unusual circumstances, for example where more frequent
reporting is necessary for the effective monitoring of the Federal award or could
significantly affect program outcomes. Reports submitted annually by the non-Federal
entity and/or pass-through entity must be due no later than 90 calendar days after the
reporting period. Reports submitted quarterly or semiannually must be due no later than 30
calendar days after the reporting period. Alternatively, the Federal awarding agency or
pass-through entity may require annual reports before the anniversary dates of multiple
year Federal awards. The final performance report submitted by the non-Federal entity
and/or pass-through entity must be due no later than 120 calendar days after the period of
performance end date. A subrecipient must submit to the pass-through entity, no later than
90 calendar days after the period of performance end date, all final performance reports as
required by the terms and conditions of the Federal award. See also § 200.344. If a justified
request is submitted by a non-Federal entity, the Federal agency may extend the due date
for any performance report.
Finding 2022-006 – Lack of County-Wide Internal Controls Over Major Federal Program
Coronavirus State and Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring
QUESTIONED COSTS: $-0-
Condition: County-wide internal controls regarding Control Environment, Risk Assessment, Information
and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the
County complies with grant requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal
funds.
Recommendation: OSAI recommends the County implement a system of internal controls to ensure
compliance with grant requirements.
Management Response:
Chairman of the Board of County Commissioners: We will work to implement a Risk Assessment plan.
We will implement controls to help make sure we are in compliance with all grant requirements and federal
funds are expended in accordance with grant agreements and in a timely manner. We will ensure employees
have the current and correct compliance supplement to work from.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in
part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04
states in part:
Components, Principles, and Attributes
Control Environment - The foundation for an internal control system. It provides the
discipline and structure to help an entity achieve its objectives.
Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives.
This assessment provides the basis for developing appropriate risk responses.
Information and Communication - The quality information management and personnel
communicate and use to support the internal control system.
Monitoring - Activities management establishes and operates to assess the quality of
performance over time and promptly resolve the findings of audits and other reviews.
Finding 2022-007 – Lack of Internal Controls Over Major Federal Program Coronavirus State and
Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal
disbursements, we noted that the County has not established procedures to ensure compliance with the
following compliance requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles;
Period of Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition attributed to the noncompliance with grant requirements and could
result in a loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program
and implement internal control procedures to ensure compliance with requirements.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will work with
all County Officials to go over all grants and federal monies that the County receives to ensure that proper
internal controls are implemented.
Criteria: OMB 2 CFR 200, Subpart D. §_ .303(a) reads as follows:
Subpart D-Post Federal Award Requirements
§200.303 Internal Controls
The non-Federal entity 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). Further, accountability and stewardship should be overall goals in management's accounting of federal
funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to
grant contracts.
Finding 2022-013 – Lack of Internal Controls and Noncompliance with Reporting Requirements
Over Federal Grant Coronavirus State and Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Reporting
QUESTIONED COSTS: $-0-
Condition: The County has not established internal controls to ensure the correct expenditure category is
used for reporting payments to the grant administrative contractor. The quarterly reports improperly
classified payments totaling $147,883 to a contractor as a Revenue Replacement expense instead of using
the Administrative expense category.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements.
Recommendation: OSAI recommends the County gain an understanding of the requirements for this
program and implement internal controls to ensure compliance with these requirements.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will take
measures to ensure future compliance with all requirements of federal grants.
Criteria: Accountability and stewardship should be overall goals in management’s accounting of federal
funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to
grant contracts.
Title 2 CFR § 200.303 Internal Controls (a) reads as follows:
The non-Federal entity 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 theUnited States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as
follows:
All recipients of federal funds must complete financial, performance, and compliance
reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported
on a cash or accrual basis, as long as the methodology is disclosed and consistently applied.
Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1.
Your organization should appropriately maintain accounting records for compiling and
reporting accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, you organization needs to establish controls to ensure
completion and timely submission of all mandatory performance and/or compliance
reporting.
Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows:
The non-Federal entity must submit performance reports at the interval required by the
Federal awarding agency or pass-through entity to best inform improvements in program
outcomes and productivity. Intervals must be no less frequent than annually nor more
frequent than quarterly except in unusual circumstances, for example where more frequent
reporting is necessary for the effective monitoring of the Federal award or could
significantly affect program outcomes. Reports submitted annually by the non-Federal
entity and/or pass-through entity must be due no later than 90 calendar days after the
reporting period. Reports submitted quarterly or semiannually must be due no later than 30
calendar days after the reporting period. Alternatively, the Federal awarding agency or
pass-through entity may require annual reports before the anniversary dates of multiple
year Federal awards. The final performance report submitted by the non-Federal entity
and/or pass-through entity must be due no later than 120 calendar days after the period of
performance end date. A subrecipient must submit to the pass-through entity, no later than
90 calendar days after the period of performance end date, all final performance reports as
required by the terms and conditions of the Federal award. See also § 200.344. If a justified
request is submitted by a non-Federal entity, the Federal agency may extend the due date
for any performance report.