2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat)
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash
Management and Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities
to 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 terms and conditions of the Federal award. CFR Section 200.502(a) states
that the determination of when a Federal award is expended should be based on when the activity
related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal
awards, such as expenditure/expense transactions associated with grant awards. The County
reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis
of accounting, in accordance with generally accepted accounting principles. CFR Section
200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial
statements which must include the total Federal awards expended as determined in accordance
with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA
to the amounts reported in the auditee’s financial statements.
Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures
recorded in the financial statements. Changes were made to major program expenditures, as well
as expenditures of other programs, during the closing process and during the completion of the
single audit to properly report expenditures on the SEFA. Closing procedures should be in place
to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the
grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and
ensure the expenditures that will be claimed under federal awards are properly reported on the
SEFA and audited financial statements prior to the start of the single audit. If expenditures reported
on the SEFA are misstated, the County could fail to have a program appropriately identified as a
major program and tested as a major program during the single audit. Failure to have a program
audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Cause: Closing procedures were not in place and management did not effectively communicate
with County departments responsible for administering federal awards to identify all federal grant
related activity.
Effect: The SEFA required material adjustments to include all federal expenditures prior to the
single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during
the single audit.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that management meet with department heads throughout the
year and during the closing process to identify all expenditures under federal awards. Training
should be provided to all staff to make sure they are aware of the importance of accurately
reconciling and claiming grant expenditures on a timely basis and providing the information to
management for inclusion on the SEFA.
Views of Responsible Officials: The County will work to improve closing processes and
communications with various departments to ensure the SEFA is complete and accurate.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat)
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash
Management and Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities
to 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 terms and conditions of the Federal award. CFR Section 200.502(a) states
that the determination of when a Federal award is expended should be based on when the activity
related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal
awards, such as expenditure/expense transactions associated with grant awards. The County
reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis
of accounting, in accordance with generally accepted accounting principles. CFR Section
200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial
statements which must include the total Federal awards expended as determined in accordance
with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA
to the amounts reported in the auditee’s financial statements.
Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures
recorded in the financial statements. Changes were made to major program expenditures, as well
as expenditures of other programs, during the closing process and during the completion of the
single audit to properly report expenditures on the SEFA. Closing procedures should be in place
to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the
grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and
ensure the expenditures that will be claimed under federal awards are properly reported on the
SEFA and audited financial statements prior to the start of the single audit. If expenditures reported
on the SEFA are misstated, the County could fail to have a program appropriately identified as a
major program and tested as a major program during the single audit. Failure to have a program
audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Cause: Closing procedures were not in place and management did not effectively communicate
with County departments responsible for administering federal awards to identify all federal grant
related activity.
Effect: The SEFA required material adjustments to include all federal expenditures prior to the
single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during
the single audit.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that management meet with department heads throughout the
year and during the closing process to identify all expenditures under federal awards. Training
should be provided to all staff to make sure they are aware of the importance of accurately
reconciling and claiming grant expenditures on a timely basis and providing the information to
management for inclusion on the SEFA.
Views of Responsible Officials: The County will work to improve closing processes and
communications with various departments to ensure the SEFA is complete and accurate.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat)
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash
Management and Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities
to 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 terms and conditions of the Federal award. CFR Section 200.502(a) states
that the determination of when a Federal award is expended should be based on when the activity
related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal
awards, such as expenditure/expense transactions associated with grant awards. The County
reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis
of accounting, in accordance with generally accepted accounting principles. CFR Section
200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial
statements which must include the total Federal awards expended as determined in accordance
with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA
to the amounts reported in the auditee’s financial statements.
Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures
recorded in the financial statements. Changes were made to major program expenditures, as well
as expenditures of other programs, during the closing process and during the completion of the
single audit to properly report expenditures on the SEFA. Closing procedures should be in place
to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the
grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and
ensure the expenditures that will be claimed under federal awards are properly reported on the
SEFA and audited financial statements prior to the start of the single audit. If expenditures reported
on the SEFA are misstated, the County could fail to have a program appropriately identified as a
major program and tested as a major program during the single audit. Failure to have a program
audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Cause: Closing procedures were not in place and management did not effectively communicate
with County departments responsible for administering federal awards to identify all federal grant
related activity.
Effect: The SEFA required material adjustments to include all federal expenditures prior to the
single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during
the single audit.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that management meet with department heads throughout the
year and during the closing process to identify all expenditures under federal awards. Training
should be provided to all staff to make sure they are aware of the importance of accurately
reconciling and claiming grant expenditures on a timely basis and providing the information to
management for inclusion on the SEFA.
Views of Responsible Officials: The County will work to improve closing processes and
communications with various departments to ensure the SEFA is complete and accurate.
2022-007 – Written Policies Required by the Uniform Guidance (repeat
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting and
Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: Delta County does not have written policies and procedures to implement the
requirements of 2 CFR section 200 for the administration of federal awards specific to the Airport
or for federal awards in general. The Uniform Guidance requires a non-federal entity that has
expended federal awards for a grant on or after December 26, 2014 to have written policies
pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3)
compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. 2
CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls
over the federal awards that provide assurance that the entity is managing the federal awards in
compliance with federal statutes, regulations, and the conditions of the federal award.
Condition: The County does not have processes in place to conform to all of the requirements in
the Uniform Guidance. There are no formal written policies in place specifically related to the
Airport. Additionally, the Airport does not have a clear determination of the assignment of
responsibilities between Airport management, Michigan Department of Transportation (the State)
and other consultants.
Cause: The County has not reviewed and updated its policies and procedures for continued
changes in grants and the Uniform Guidance. The Airport grants operate outside of the general
County processes and internal control system given the administration assistance provided by the
State and other consultants. Also, Airport management has experienced significant turnover.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
covering these areas as soon as practical. The Airport should also formalize responsibilities with
the State and other consultants.
Views of Responsible Officials: The County will work to update policies and procedures and to
formalize responsibilities.
2022-007 – Written Policies Required by the Uniform Guidance (repeat
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting and
Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: Delta County does not have written policies and procedures to implement the
requirements of 2 CFR section 200 for the administration of federal awards specific to the Airport
or for federal awards in general. The Uniform Guidance requires a non-federal entity that has
expended federal awards for a grant on or after December 26, 2014 to have written policies
pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3)
compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. 2
CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls
over the federal awards that provide assurance that the entity is managing the federal awards in
compliance with federal statutes, regulations, and the conditions of the federal award.
Condition: The County does not have processes in place to conform to all of the requirements in
the Uniform Guidance. There are no formal written policies in place specifically related to the
Airport. Additionally, the Airport does not have a clear determination of the assignment of
responsibilities between Airport management, Michigan Department of Transportation (the State)
and other consultants.
Cause: The County has not reviewed and updated its policies and procedures for continued
changes in grants and the Uniform Guidance. The Airport grants operate outside of the general
County processes and internal control system given the administration assistance provided by the
State and other consultants. Also, Airport management has experienced significant turnover.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
covering these areas as soon as practical. The Airport should also formalize responsibilities with
the State and other consultants.
Views of Responsible Officials: The County will work to update policies and procedures and to
formalize responsibilities.
2022-007 – Written Policies Required by the Uniform Guidance (repeat
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting and
Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: Delta County does not have written policies and procedures to implement the
requirements of 2 CFR section 200 for the administration of federal awards specific to the Airport
or for federal awards in general. The Uniform Guidance requires a non-federal entity that has
expended federal awards for a grant on or after December 26, 2014 to have written policies
pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3)
compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. 2
CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls
over the federal awards that provide assurance that the entity is managing the federal awards in
compliance with federal statutes, regulations, and the conditions of the federal award.
Condition: The County does not have processes in place to conform to all of the requirements in
the Uniform Guidance. There are no formal written policies in place specifically related to the
Airport. Additionally, the Airport does not have a clear determination of the assignment of
responsibilities between Airport management, Michigan Department of Transportation (the State)
and other consultants.
Cause: The County has not reviewed and updated its policies and procedures for continued
changes in grants and the Uniform Guidance. The Airport grants operate outside of the general
County processes and internal control system given the administration assistance provided by the
State and other consultants. Also, Airport management has experienced significant turnover.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
covering these areas as soon as practical. The Airport should also formalize responsibilities with
the State and other consultants.
Views of Responsible Officials: The County will work to update policies and procedures and to
formalize responsibilities.
2022-008 – Report Preparation and Submission
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers
Criteria: Sponsors of commercial airports are required to submit FAA Form 5100-127, Operating
and Financial Summary (OMB No. 2120-0569), which captures revenues and expenditures at the
airport, including revenue surplus. Sponsors of commercial airports are also required to submit
FAA Form 5100-126, Financial Government Payment Report (OMB No. 2120-0569), which
captures amounts paid and services provided to other units of government.
Condition: The County Airport did not file FAA Form 5100-127 or FAA Form 5100-126.
Cause: The County Airport does not have controls in place to ensure all required reports are filed.
The Airport grants operate outside of the general County processes and internal control system
given the administration assistance provided by the State and other consultants. Also, Airport
management has experienced significant turnover.
Effect: As a result of this condition, the County did not comply with the grant requirements.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
related to report preparation and submission as soon as practical.
Views of Responsible Officials: The County will work to update policies and procedures related
to report preparation and submission.
2022-008 – Report Preparation and Submission
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers
Criteria: Sponsors of commercial airports are required to submit FAA Form 5100-127, Operating
and Financial Summary (OMB No. 2120-0569), which captures revenues and expenditures at the
airport, including revenue surplus. Sponsors of commercial airports are also required to submit
FAA Form 5100-126, Financial Government Payment Report (OMB No. 2120-0569), which
captures amounts paid and services provided to other units of government.
Condition: The County Airport did not file FAA Form 5100-127 or FAA Form 5100-126.
Cause: The County Airport does not have controls in place to ensure all required reports are filed.
The Airport grants operate outside of the general County processes and internal control system
given the administration assistance provided by the State and other consultants. Also, Airport
management has experienced significant turnover.
Effect: As a result of this condition, the County did not comply with the grant requirements.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
related to report preparation and submission as soon as practical.
Views of Responsible Officials: The County will work to update policies and procedures related
to report preparation and submission.
2022-009 – Procurement Documentation
Finding Type: Significant Deficiency in Internal Controls and Noncompliance (Procurement,
Suspension & Debarment)
Federal Program: U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery
Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.318(a) requires non-Federal entities to establish and use documented procurement procedures that conform to the procurement standards identified in Sections 200.317 through 200.327.
Condition: While the County does have a written procurement policy that meets the requirements, the policy was not being followed. The County did not maintain records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The County did not maintain documentation to sufficiently support noncompetitive procurement on one contract tested. The County did not maintain written documentation of a cost analysis. County management indicated that many of the items procured were processed through the Michigan MiDeal website, but a contract file was not maintained.
Cause: The County does not have controls in place to ensure that its procurement policy is being followed.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County implement controls to ensure the procurement policy is followed.
Views of Responsible Officials: The County will work to implement controls to ensure the procurement policy is followed.
2022-010 – Improper Payments Requested for Reimbursement
Finding Type: Significant Deficiency in Internal Controls and Noncompliance (Allowable
Costs/Cost Principles, Reporting)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); Grant Number: 3-26-0031-046-2021 (COVID-19 Coronavirus Response & Relief
Supplemental Appropriation Act - Airport Coronavirus Response Grant Program)
Criteria: Costs charged to grants and included in reimbursement requests should be free of
improper payments, including (1) payments that should not have been made or that were made in
incorrect amounts (including overpayments and underpayments) under statutory, contractual,
administrative, or other legally applicable requirements; (2) payments that do not account for credit
for applicable discounts; (3) duplicate payments; (4) payments that were made to an ineligible
party or for an ineligible good or service; and (5) payments for goods or services not received.
Condition: The Airport Manager prepared reimbursement requests by manually transferring data
from the general ledger to summary spreadsheets. During this manual process, the decimal place
on one item was slid to places to the left ($6,599.00 rather than $65.99) resulting in the request for
reimbursement being overstated. In addition, select reimbursements for fuel purchases were
transferred with the inclusion of taxes resulting in the request for reimbursement being overstated.
As the Delta County Airport is the sole provider of fuel on the airfield, fuel prices submitted for
reimbursement should reflect bulk fuel purchases only with taxes removed. The Airport incurred
other expenses during the period that would have been eligible costs and that would directly offset
the noted overstatements. However, the reimbursement requests that were filed included the errors.
Cause: The County does not have controls in place to review and approve the costs reported as
allowable on all reimbursement requests.
Effect: As a result of this condition, the reimbursement requests submitted for this program
included improper payments that should have been replaced with other eligible expenses.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County implement controls to ensure a secondary
review and approval process is put into place for all reimbursement request submissions so that
only allowable costs are charged to the grant.
Views of Responsible Officials: The County will work to implement controls to ensure that
reimbursement requests and related expenses are reviewed and approved for compliance.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat)
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash
Management and Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities
to 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 terms and conditions of the Federal award. CFR Section 200.502(a) states
that the determination of when a Federal award is expended should be based on when the activity
related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal
awards, such as expenditure/expense transactions associated with grant awards. The County
reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis
of accounting, in accordance with generally accepted accounting principles. CFR Section
200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial
statements which must include the total Federal awards expended as determined in accordance
with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA
to the amounts reported in the auditee’s financial statements.
Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures
recorded in the financial statements. Changes were made to major program expenditures, as well
as expenditures of other programs, during the closing process and during the completion of the
single audit to properly report expenditures on the SEFA. Closing procedures should be in place
to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the
grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and
ensure the expenditures that will be claimed under federal awards are properly reported on the
SEFA and audited financial statements prior to the start of the single audit. If expenditures reported
on the SEFA are misstated, the County could fail to have a program appropriately identified as a
major program and tested as a major program during the single audit. Failure to have a program
audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Cause: Closing procedures were not in place and management did not effectively communicate
with County departments responsible for administering federal awards to identify all federal grant
related activity.
Effect: The SEFA required material adjustments to include all federal expenditures prior to the
single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during
the single audit.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that management meet with department heads throughout the
year and during the closing process to identify all expenditures under federal awards. Training
should be provided to all staff to make sure they are aware of the importance of accurately
reconciling and claiming grant expenditures on a timely basis and providing the information to
management for inclusion on the SEFA.
Views of Responsible Officials: The County will work to improve closing processes and
communications with various departments to ensure the SEFA is complete and accurate.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat)
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash
Management and Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities
to 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 terms and conditions of the Federal award. CFR Section 200.502(a) states
that the determination of when a Federal award is expended should be based on when the activity
related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal
awards, such as expenditure/expense transactions associated with grant awards. The County
reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis
of accounting, in accordance with generally accepted accounting principles. CFR Section
200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial
statements which must include the total Federal awards expended as determined in accordance
with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA
to the amounts reported in the auditee’s financial statements.
Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures
recorded in the financial statements. Changes were made to major program expenditures, as well
as expenditures of other programs, during the closing process and during the completion of the
single audit to properly report expenditures on the SEFA. Closing procedures should be in place
to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the
grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and
ensure the expenditures that will be claimed under federal awards are properly reported on the
SEFA and audited financial statements prior to the start of the single audit. If expenditures reported
on the SEFA are misstated, the County could fail to have a program appropriately identified as a
major program and tested as a major program during the single audit. Failure to have a program
audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Cause: Closing procedures were not in place and management did not effectively communicate
with County departments responsible for administering federal awards to identify all federal grant
related activity.
Effect: The SEFA required material adjustments to include all federal expenditures prior to the
single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during
the single audit.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that management meet with department heads throughout the
year and during the closing process to identify all expenditures under federal awards. Training
should be provided to all staff to make sure they are aware of the importance of accurately
reconciling and claiming grant expenditures on a timely basis and providing the information to
management for inclusion on the SEFA.
Views of Responsible Officials: The County will work to improve closing processes and
communications with various departments to ensure the SEFA is complete and accurate.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat)
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash
Management and Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities
to 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 terms and conditions of the Federal award. CFR Section 200.502(a) states
that the determination of when a Federal award is expended should be based on when the activity
related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal
awards, such as expenditure/expense transactions associated with grant awards. The County
reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis
of accounting, in accordance with generally accepted accounting principles. CFR Section
200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial
statements which must include the total Federal awards expended as determined in accordance
with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA
to the amounts reported in the auditee’s financial statements.
Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures
recorded in the financial statements. Changes were made to major program expenditures, as well
as expenditures of other programs, during the closing process and during the completion of the
single audit to properly report expenditures on the SEFA. Closing procedures should be in place
to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the
grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and
ensure the expenditures that will be claimed under federal awards are properly reported on the
SEFA and audited financial statements prior to the start of the single audit. If expenditures reported
on the SEFA are misstated, the County could fail to have a program appropriately identified as a
major program and tested as a major program during the single audit. Failure to have a program
audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance).
Cause: Closing procedures were not in place and management did not effectively communicate
with County departments responsible for administering federal awards to identify all federal grant
related activity.
Effect: The SEFA required material adjustments to include all federal expenditures prior to the
single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during
the single audit.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that management meet with department heads throughout the
year and during the closing process to identify all expenditures under federal awards. Training
should be provided to all staff to make sure they are aware of the importance of accurately
reconciling and claiming grant expenditures on a timely basis and providing the information to
management for inclusion on the SEFA.
Views of Responsible Officials: The County will work to improve closing processes and
communications with various departments to ensure the SEFA is complete and accurate.
2022-007 – Written Policies Required by the Uniform Guidance (repeat
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting and
Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: Delta County does not have written policies and procedures to implement the
requirements of 2 CFR section 200 for the administration of federal awards specific to the Airport
or for federal awards in general. The Uniform Guidance requires a non-federal entity that has
expended federal awards for a grant on or after December 26, 2014 to have written policies
pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3)
compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. 2
CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls
over the federal awards that provide assurance that the entity is managing the federal awards in
compliance with federal statutes, regulations, and the conditions of the federal award.
Condition: The County does not have processes in place to conform to all of the requirements in
the Uniform Guidance. There are no formal written policies in place specifically related to the
Airport. Additionally, the Airport does not have a clear determination of the assignment of
responsibilities between Airport management, Michigan Department of Transportation (the State)
and other consultants.
Cause: The County has not reviewed and updated its policies and procedures for continued
changes in grants and the Uniform Guidance. The Airport grants operate outside of the general
County processes and internal control system given the administration assistance provided by the
State and other consultants. Also, Airport management has experienced significant turnover.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
covering these areas as soon as practical. The Airport should also formalize responsibilities with
the State and other consultants.
Views of Responsible Officials: The County will work to update policies and procedures and to
formalize responsibilities.
2022-007 – Written Policies Required by the Uniform Guidance (repeat
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting and
Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: Delta County does not have written policies and procedures to implement the
requirements of 2 CFR section 200 for the administration of federal awards specific to the Airport
or for federal awards in general. The Uniform Guidance requires a non-federal entity that has
expended federal awards for a grant on or after December 26, 2014 to have written policies
pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3)
compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. 2
CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls
over the federal awards that provide assurance that the entity is managing the federal awards in
compliance with federal statutes, regulations, and the conditions of the federal award.
Condition: The County does not have processes in place to conform to all of the requirements in
the Uniform Guidance. There are no formal written policies in place specifically related to the
Airport. Additionally, the Airport does not have a clear determination of the assignment of
responsibilities between Airport management, Michigan Department of Transportation (the State)
and other consultants.
Cause: The County has not reviewed and updated its policies and procedures for continued
changes in grants and the Uniform Guidance. The Airport grants operate outside of the general
County processes and internal control system given the administration assistance provided by the
State and other consultants. Also, Airport management has experienced significant turnover.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
covering these areas as soon as practical. The Airport should also formalize responsibilities with
the State and other consultants.
Views of Responsible Officials: The County will work to update policies and procedures and to
formalize responsibilities.
2022-007 – Written Policies Required by the Uniform Guidance (repeat
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting and
Allowable Costs/Cost Principles)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local
Fiscal Recovery Funds (AL #21.027)
Criteria: Delta County does not have written policies and procedures to implement the
requirements of 2 CFR section 200 for the administration of federal awards specific to the Airport
or for federal awards in general. The Uniform Guidance requires a non-federal entity that has
expended federal awards for a grant on or after December 26, 2014 to have written policies
pertaining to: 1) advance payments and reimbursements; 2) determination of allowable costs; 3)
compensation (personnel and benefits policies); 4) travel costs; and 5) procurement procedures. 2
CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls
over the federal awards that provide assurance that the entity is managing the federal awards in
compliance with federal statutes, regulations, and the conditions of the federal award.
Condition: The County does not have processes in place to conform to all of the requirements in
the Uniform Guidance. There are no formal written policies in place specifically related to the
Airport. Additionally, the Airport does not have a clear determination of the assignment of
responsibilities between Airport management, Michigan Department of Transportation (the State)
and other consultants.
Cause: The County has not reviewed and updated its policies and procedures for continued
changes in grants and the Uniform Guidance. The Airport grants operate outside of the general
County processes and internal control system given the administration assistance provided by the
State and other consultants. Also, Airport management has experienced significant turnover.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
covering these areas as soon as practical. The Airport should also formalize responsibilities with
the State and other consultants.
Views of Responsible Officials: The County will work to update policies and procedures and to
formalize responsibilities.
2022-008 – Report Preparation and Submission
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers
Criteria: Sponsors of commercial airports are required to submit FAA Form 5100-127, Operating
and Financial Summary (OMB No. 2120-0569), which captures revenues and expenditures at the
airport, including revenue surplus. Sponsors of commercial airports are also required to submit
FAA Form 5100-126, Financial Government Payment Report (OMB No. 2120-0569), which
captures amounts paid and services provided to other units of government.
Condition: The County Airport did not file FAA Form 5100-127 or FAA Form 5100-126.
Cause: The County Airport does not have controls in place to ensure all required reports are filed.
The Airport grants operate outside of the general County processes and internal control system
given the administration assistance provided by the State and other consultants. Also, Airport
management has experienced significant turnover.
Effect: As a result of this condition, the County did not comply with the grant requirements.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
related to report preparation and submission as soon as practical.
Views of Responsible Officials: The County will work to update policies and procedures related
to report preparation and submission.
2022-008 – Report Preparation and Submission
Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); all project numbers
Criteria: Sponsors of commercial airports are required to submit FAA Form 5100-127, Operating
and Financial Summary (OMB No. 2120-0569), which captures revenues and expenditures at the
airport, including revenue surplus. Sponsors of commercial airports are also required to submit
FAA Form 5100-126, Financial Government Payment Report (OMB No. 2120-0569), which
captures amounts paid and services provided to other units of government.
Condition: The County Airport did not file FAA Form 5100-127 or FAA Form 5100-126.
Cause: The County Airport does not have controls in place to ensure all required reports are filed.
The Airport grants operate outside of the general County processes and internal control system
given the administration assistance provided by the State and other consultants. Also, Airport
management has experienced significant turnover.
Effect: As a result of this condition, the County did not comply with the grant requirements.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County and the Airport adopt formal written policies
related to report preparation and submission as soon as practical.
Views of Responsible Officials: The County will work to update policies and procedures related
to report preparation and submission.
2022-009 – Procurement Documentation
Finding Type: Significant Deficiency in Internal Controls and Noncompliance (Procurement,
Suspension & Debarment)
Federal Program: U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery
Funds (AL #21.027)
Criteria: The Code of Federal Regulations (CFR) Section 200.318(a) requires non-Federal entities to establish and use documented procurement procedures that conform to the procurement standards identified in Sections 200.317 through 200.327.
Condition: While the County does have a written procurement policy that meets the requirements, the policy was not being followed. The County did not maintain records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The County did not maintain documentation to sufficiently support noncompetitive procurement on one contract tested. The County did not maintain written documentation of a cost analysis. County management indicated that many of the items procured were processed through the Michigan MiDeal website, but a contract file was not maintained.
Cause: The County does not have controls in place to ensure that its procurement policy is being followed.
Effect: As a result of this condition, the County did not fully comply with the Uniform Guidance.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County implement controls to ensure the procurement policy is followed.
Views of Responsible Officials: The County will work to implement controls to ensure the procurement policy is followed.
2022-010 – Improper Payments Requested for Reimbursement
Finding Type: Significant Deficiency in Internal Controls and Noncompliance (Allowable
Costs/Cost Principles, Reporting)
Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL
#20.106); Grant Number: 3-26-0031-046-2021 (COVID-19 Coronavirus Response & Relief
Supplemental Appropriation Act - Airport Coronavirus Response Grant Program)
Criteria: Costs charged to grants and included in reimbursement requests should be free of
improper payments, including (1) payments that should not have been made or that were made in
incorrect amounts (including overpayments and underpayments) under statutory, contractual,
administrative, or other legally applicable requirements; (2) payments that do not account for credit
for applicable discounts; (3) duplicate payments; (4) payments that were made to an ineligible
party or for an ineligible good or service; and (5) payments for goods or services not received.
Condition: The Airport Manager prepared reimbursement requests by manually transferring data
from the general ledger to summary spreadsheets. During this manual process, the decimal place
on one item was slid to places to the left ($6,599.00 rather than $65.99) resulting in the request for
reimbursement being overstated. In addition, select reimbursements for fuel purchases were
transferred with the inclusion of taxes resulting in the request for reimbursement being overstated.
As the Delta County Airport is the sole provider of fuel on the airfield, fuel prices submitted for
reimbursement should reflect bulk fuel purchases only with taxes removed. The Airport incurred
other expenses during the period that would have been eligible costs and that would directly offset
the noted overstatements. However, the reimbursement requests that were filed included the errors.
Cause: The County does not have controls in place to review and approve the costs reported as
allowable on all reimbursement requests.
Effect: As a result of this condition, the reimbursement requests submitted for this program
included improper payments that should have been replaced with other eligible expenses.
Questioned Costs: No costs have been questioned as a result of this finding.
Recommendation: We recommend that the County implement controls to ensure a secondary
review and approval process is put into place for all reimbursement request submissions so that
only allowable costs are charged to the grant.
Views of Responsible Officials: The County will work to implement controls to ensure that
reimbursement requests and related expenses are reviewed and approved for compliance.