Assistance Listings number and name: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Award number and year: SLFRP0665, March 3, 2021 through December 31, 2026
Federal agency: U.S. Department of the Treasury
Compliance requirement: Reporting
Questioned costs: Not applicable
Condition—The County's Finance Department (Department) did not review and approve all 4 federal program reports (quarterly reports) before submitting them to the federal agency. Specifically, the Department was advanced $10,492,363 of program monies, and of this amount, the Department reported expenditures of $6,165,253 on the quarterly reports as of June 30, 2023. However, the Department did not perform an independent review and approval of these required reports prior to submission to ensure the $6,165,253 of reported expenditures was accurate, agreed to County records, and contained only allowable expenditures. Our testing of the 4 quarterly reports found the following inaccuracies:
• Understatements of $242,886 of current program expenditures and $330,294 of obligations and cumulative expenditures on the October 31, 2022, progress report.
• An overstatement of $1,393,449 and an understatement of $187,826, respectively, of current program expenditures and cumulative program expenditures on the December 31, 2022, progress report.
• Misstatements of $19,284 and $168,542 of current program expenditures and cumulative program expenditures, respectively, on the March 31, 2023, progress report.
• Overstatements of $669,492 and $109,892 of current program expenditures and cumulative program expenditures, respectively, on the June 30, 2023, progress report.
Effect—The Department's reporting inaccurate and erroneous program information results in the federal agency being unable to rely on the reports to effectively monitor the Department's program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program's success. The County is also at risk that this finding applies to other federal programs it administers.
Cause—The County did not have policies and procedures requiring the Department to perform and document and independent review and approval of the program's reports before submitting them to the federal agency. Although the Department reported that it had performed independent reviews and approvals of the reports, it did not document these independent reviews and approvals, nor did these reviews detect the errors we noted above.
Criteria—Federal agency guidance requires the County to verify and confirm that all program information that it reports is accurate and approved before submitting it.1 Additionally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303).
Recommendation—The County’s management should:
1. Develop policies and procedures requiring the Department to:
a. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures.
b. Reconcile program expenditure amounts reported to the County's accounting records.
2. Adjust or resubmit reports for detected errors on reports that the Department already submitted to the federal agency so that it is informed of errors on previously submitted reports.
3. Train Department employees responsible for preparing and reviewing reports on what information to gather to prepare the reports and on the County's policies and procedures.
The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
This finding is similar to prior-year finding 2022-103 and was reported in fiscal year 2022.
1 U.S. Department of the Treasury. (2022.) State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide, Section IV, Part i.— Subawards or Direct Payments. Retrieved on 4/6/2023 from https://home.treasury.gov/system/files/136/April-2022-PE-Report-User-Guide.pdf
Assistance Listings number and name: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Award number and year: SLFRP0665, March 3, 2021 through December 31, 2026
Federal agency: U.S. Department of the Treasury
Compliance requirement: Reporting
Questioned costs: Not applicable
Condition—The County's Finance Department (Department) did not review and approve all 4 federal program reports (quarterly reports) before submitting them to the federal agency. Specifically, the Department was advanced $10,492,363 of program monies, and of this amount, the Department reported expenditures of $6,165,253 on the quarterly reports as of June 30, 2023. However, the Department did not perform an independent review and approval of these required reports prior to submission to ensure the $6,165,253 of reported expenditures was accurate, agreed to County records, and contained only allowable expenditures. Our testing of the 4 quarterly reports found the following inaccuracies:
• Understatements of $242,886 of current program expenditures and $330,294 of obligations and cumulative expenditures on the October 31, 2022, progress report.
• An overstatement of $1,393,449 and an understatement of $187,826, respectively, of current program expenditures and cumulative program expenditures on the December 31, 2022, progress report.
• Misstatements of $19,284 and $168,542 of current program expenditures and cumulative program expenditures, respectively, on the March 31, 2023, progress report.
• Overstatements of $669,492 and $109,892 of current program expenditures and cumulative program expenditures, respectively, on the June 30, 2023, progress report.
Effect—The Department's reporting inaccurate and erroneous program information results in the federal agency being unable to rely on the reports to effectively monitor the Department's program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program's success. The County is also at risk that this finding applies to other federal programs it administers.
Cause—The County did not have policies and procedures requiring the Department to perform and document and independent review and approval of the program's reports before submitting them to the federal agency. Although the Department reported that it had performed independent reviews and approvals of the reports, it did not document these independent reviews and approvals, nor did these reviews detect the errors we noted above.
Criteria—Federal agency guidance requires the County to verify and confirm that all program information that it reports is accurate and approved before submitting it.1 Additionally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303).
Recommendation—The County’s management should:
1. Develop policies and procedures requiring the Department to:
a. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures.
b. Reconcile program expenditure amounts reported to the County's accounting records.
2. Adjust or resubmit reports for detected errors on reports that the Department already submitted to the federal agency so that it is informed of errors on previously submitted reports.
3. Train Department employees responsible for preparing and reviewing reports on what information to gather to prepare the reports and on the County's policies and procedures.
The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
This finding is similar to prior-year finding 2022-103 and was reported in fiscal year 2022.
1 U.S. Department of the Treasury. (2022.) State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide, Section IV, Part i.— Subawards or Direct Payments. Retrieved on 4/6/2023 from https://home.treasury.gov/system/files/136/April-2022-PE-Report-User-Guide.pdf