Audit 292830

Reporting Prior Year Finding Number: 2021-002 Repeat Finding Since: 2021 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Agriculture Program: 10.665 Schools and Roads – Grants to States Award Number and Year: P.L. 117-58; 2021 Pass-Through Agency: Minnesota Management and Budget Criteria: Per Office of Management and Budget (OMB) No. 0596-0220, not later than February 1st of the year after the year in which any Title III county funds were expended by a participating county, the participating county must submit a certification that the county funds expended in the applicable year, have been used as authorized under this title, including a description of the amounts expended and their use. The participating county certification also must include the amount of Title III funds not obligated by September 30 of the previous year. Condition: The County did not submit the required certification by February 1, 2023, for Title III funds expended in 2022. Questioned Costs: None. Context: The County submitted the required report in March 2023. Effect: The County did not meet the reporting requirements for the program which may affect future funding. Cause: Program personnel forgot to submit the yearly certification. Recommendation: We recommend County staff establish procedures to ensure the required yearly certification for Title III funds is submitted to meet reporting requirements. View of Responsible Official: Acknowledge

Suspension and Debarment Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Criteria: Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Condition: For two covered transactions tested, the verification for suspension or debarred vendors was not performed before entering into the covered transactions. Questioned Costs: None. Context: The County informed us that it had a prior working relationship with these vendors. In addition, neither of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended or debarred may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County was not aware that it had to assign specific expenditures when classifying them as "Revenue Replacement". As a result, the County did not complete its established procedures for these expenditures as identified in its Procurement Policy because it was not aware they would be assigned as funded through the SLFRF grant at the time funds were disbursed. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur Section IV – Other Findings and Recommendations

Reporting Prior Year Finding Number: 2021-002 Repeat Finding Since: 2021 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Agriculture Program: 10.665 Schools and Roads – Grants to States Award Number and Year: P.L. 117-58; 2021 Pass-Through Agency: Minnesota Management and Budget Criteria: Per Office of Management and Budget (OMB) No. 0596-0220, not later than February 1st of the year after the year in which any Title III county funds were expended by a participating county, the participating county must submit a certification that the county funds expended in the applicable year, have been used as authorized under this title, including a description of the amounts expended and their use. The participating county certification also must include the amount of Title III funds not obligated by September 30 of the previous year. Condition: The County did not submit the required certification by February 1, 2023, for Title III funds expended in 2022. Questioned Costs: None. Context: The County submitted the required report in March 2023. Effect: The County did not meet the reporting requirements for the program which may affect future funding. Cause: Program personnel forgot to submit the yearly certification. Recommendation: We recommend County staff establish procedures to ensure the required yearly certification for Title III funds is submitted to meet reporting requirements. View of Responsible Official: Acknowledge

Suspension and Debarment Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Criteria: Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The suspension and debarment requirements apply to covered transaction amounts over $25,000. Condition: For two covered transactions tested, the verification for suspension or debarred vendors was not performed before entering into the covered transactions. Questioned Costs: None. Context: The County informed us that it had a prior working relationship with these vendors. In addition, neither of the vendors tested were listed as suspended or debarred on SAM.gov at the time of the audit. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended or debarred may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County was not aware that it had to assign specific expenditures when classifying them as "Revenue Replacement". As a result, the County did not complete its established procedures for these expenditures as identified in its Procurement Policy because it was not aware they would be assigned as funded through the SLFRF grant at the time funds were disbursed. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur Section IV – Other Findings and Recommendations