Audit 321389

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Kittitas County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements. Assistance Listing Number and Title: 20.106 - Airport Improvement Program Federal Grantor Name: Federal Aviation Administration, U.S. Department of Transportation Federal Award/Contract Number: 3-53-0026-021-2023 3-53-0026-022-2023 3-53-0026-019-2023 3-53-0026-020-2023 3-53-0029-015-2020 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The objective of the Airport Improvement Program is to help sponsors, owners or operators of public-use airports develop a nationwide system of airports adequate to meet the needs of civil aeronautics. Kittitas County, as the award recipient, is the sponsor of Bowers Field Airport, and spent $1,227,997 in federal program funds in 2023. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. To comply with reporting requirements, the County must submit the Federal Financial Report (SF-425) and the Outlay Report and Request for Reimbursement for Construction Programs (SF-271) or the Request for Advance or Reimbursement (SF-270) annually. Our audit found the County did not have adequate controls to ensure it submitted complete and accurate annual SF-425 and SF-271 or SF-270 reports in accordance with the award agreement terms. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The public works department was put in charge of managing the County’s airport in September 2023. County staff evaluated Federal Aviation Administration (FAA) guidance to determine the applicability of these reports and how to prepare them. During this evaluation, staff incorrectly determined they should only submit the SF-425 and SF-271 or SF-270 reports once a project had been completed. Effect of Condition The County did not prepare or submit the annual SF-425 or SF-271 reports required for projects in progress during the period. The County was required to prepare and submit five SF-425 and SF-271 reports each, 10 in total, but only submitted one of each for contract 3-53-0029-015-2020. The County did not report the remaining contracts to the FAA. Recommendation We recommend the County establish internal controls to ensure it prepares and submits all required reports for its federal programs. County’s Response The County is in agreement with SAO’s finding pertaining to delinquent filings for its FAA grants. Though the underlying project was completed in good order, the award contract stipulated more frequent reporting than the County provided. Kittitas County has since implemented one of two controls enhancements to ensure better visibility of its entire grants-award portfolio, which is the inclusion of anticipated grants activity in its department-level budget workbooks for the coming year. This procedural revision will be a catalyst for ongoing engagement with the Finance Department to help ensure compliance with the various awarding agencies. The second of two enhancements will be implemented with the upgrade of the County’s ERP scheduled for March 2025. This upgrade will include an improved grants-accounting module, which will further improve visibility and GASB compliance. Auditor’s Remarks We appreciate the County’s commitment to resolving this finding and thank the County for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 329, describes requirements for monitoring and reporting program performance including construction and nonconstruction reporting.