FAC Explorer

Audit 293110

FY End
2023-06-30
Total Expended
$2.38M
Findings
2
Programs
5
Organization: Henderson County Fiscal Court (KY)
Year: 2023 Accepted: 2024-03-01
Auditor: Roy W Hunter CPA PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
371596 2023-002 Material Weakness Yes AB
948038 2023-002 Material Weakness Yes AB

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.68M Yes 1
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $202,000 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $200,000 - 0
93.563 Child Support Enforcement $70,839 - 0
97.042 Emergency Management Performance Grants $24,892 - 0

Contacts

Name Title Type
XEVLRRJ3JCJ7 Roy W. Hunter Auditee
8598065342 Roy W. Hunter CPA Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the basis of the accounting practices prescribed or permitted by the Department for Local Government to demonstrate compliance with the Commonwealth of Kentucky’s regulatory basis of accounting and budget laws, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Henderson County has not adopted an indirect cost rate and has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of Henderson County, Kentucky under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Henderson County, Kentucky, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Henderson County, Kentucky.
Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the basis of the accounting practices prescribed or permitted by the Department for Local Government to demonstrate compliance with the Commonwealth of Kentucky’s regulatory basis of accounting and budget laws, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Henderson County has not adopted an indirect cost rate and has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the basis of the accounting practices prescribed or permitted by the Department for Local Government to demonstrate compliance with the Commonwealth of Kentucky’s regulatory basis of accounting and budget laws, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: Note 3. Indirect Cost Rate Accounting Policies: Expenditures reported on the Schedule are reported on the basis of the accounting practices prescribed or permitted by the Department for Local Government to demonstrate compliance with the Commonwealth of Kentucky’s regulatory basis of accounting and budget laws, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Henderson County has not adopted an indirect cost rate and has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Henderson County has not adopted an indirect cost rate and has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-002
Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: 2023 Name of Federal Agency: U.S. Department of the Treasury Compliance Requirements Allowable Costs/Cost Principles Type of Finding: Material Weakness Amount of Questioned Costs: $0 COVID Related: Yes This is a repeat finding and was included in the prior year report as finding 2022-004. The Henderson County Fiscal Court transferred federal funds from the ARPA Fund to the Road Fund without first ensuring sufficient supporting documentation of allowable expenditures prior to the transfer. The county was awarded $8,781,513 in American Rescue Plan Act (ARPA) funds, receiving the first payment of $4,390,756 into the ARPA Fund in June 2021 and a second payment of $4,390,757 in June 2022. In August 2022, the county transferred $1,589,900 from the ARPA Fund into the Road Fund for “lost revenue”. At the time of the transfer, the county did not maintain a list of expenditures that reconciled to the transfer total. After the disbursements were expended, the county gathered documentation and provided auditors a reconciliation of expenditures of eligible costs that supported the amount transferred into the road fund. An effective internal control system was not in place in Henderson County to ensure compliance with requirements related to the administration of ARPA funds and the Allowable Costs/Cost Principles compliance requirements. Failure to establish and maintain effective internal controls over compliance with federal program requirements could subject the county to the risk of reporting ineligible expenditures on the SEFA and using grant funds for unallowable purposes. 2 CFR 200.303 states in part: “The non-Federal entity must: (a) Establish and maintain effective internal controls 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.” We recommend the county establish and maintain internal controls over compliance for all federal program expenditures to ensure accurate use and reporting of federal awards, including maintaining sufficient supporting documentation of expenditures that reconciles to any transfer from a federal program fund into other county funds at the time of the transfer.
Finding 2023-002
Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: 2023 Name of Federal Agency: U.S. Department of the Treasury Compliance Requirements Allowable Costs/Cost Principles Type of Finding: Material Weakness Amount of Questioned Costs: $0 COVID Related: Yes This is a repeat finding and was included in the prior year report as finding 2022-004. The Henderson County Fiscal Court transferred federal funds from the ARPA Fund to the Road Fund without first ensuring sufficient supporting documentation of allowable expenditures prior to the transfer. The county was awarded $8,781,513 in American Rescue Plan Act (ARPA) funds, receiving the first payment of $4,390,756 into the ARPA Fund in June 2021 and a second payment of $4,390,757 in June 2022. In August 2022, the county transferred $1,589,900 from the ARPA Fund into the Road Fund for “lost revenue”. At the time of the transfer, the county did not maintain a list of expenditures that reconciled to the transfer total. After the disbursements were expended, the county gathered documentation and provided auditors a reconciliation of expenditures of eligible costs that supported the amount transferred into the road fund. An effective internal control system was not in place in Henderson County to ensure compliance with requirements related to the administration of ARPA funds and the Allowable Costs/Cost Principles compliance requirements. Failure to establish and maintain effective internal controls over compliance with federal program requirements could subject the county to the risk of reporting ineligible expenditures on the SEFA and using grant funds for unallowable purposes. 2 CFR 200.303 states in part: “The non-Federal entity must: (a) Establish and maintain effective internal controls 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.” We recommend the county establish and maintain internal controls over compliance for all federal program expenditures to ensure accurate use and reporting of federal awards, including maintaining sufficient supporting documentation of expenditures that reconciles to any transfer from a federal program fund into other county funds at the time of the transfer.