Audit 321900

2023-002 Reporting Prior Year Finding Number: 2022-002 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1336; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, the U.S. Department of the Treasury requires an annual Project and Expenditure Report submitted for Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) that includes current period expenditures. Condition: The County incorrectly reported the full CSLFRF award amount of $6,484,839 as expenditures on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury for 2023 when they should have reported $615,436. The annual Project and Expenditure Report due in April 2023 was for the reporting period ending March 31, 2023. Questioned Costs: $5,869,403. Context: The County opted to spend the CSLFRF’s award under the Revenue Replacement category which allows spending on broader types of government services. Effect: Noncompliance with federal reporting requirements. Cause: County staff responsible for completing and submitting the Annual Project and Expenditure report misinterpreted the guidance and reported planned expenditures versus actual expenditures under revenue replacement. Recommendation: We recommend the County review U.S. Department of the Treasury guidance and form instructions to ensure the County is correctly reporting CSLFRF activity. View of Responsible Official: Concur

2023-003 Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1336; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two covered transactions tested, the verification for suspended or debarred vendors was not performed prior to entering into the covered transactions. Questioned Costs: None Context: The County entered into a total of 12 covered transactions for this grant during 2023. The County performed the SAM.gov search and obtained the suspension and debarment certifications from each contractor; however, these procedures were performed after the project was started. A sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The project started in March 2023, and the Board did not approve the Coronavirus State and Local Fiscal Recovery Funding for the project until August 2023. Recommendation: We recommend the County maintain documentation to demonstrate that vendors are not suspended, debarred, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur

2023-002 Reporting Prior Year Finding Number: 2022-002 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1336; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, the U.S. Department of the Treasury requires an annual Project and Expenditure Report submitted for Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) that includes current period expenditures. Condition: The County incorrectly reported the full CSLFRF award amount of $6,484,839 as expenditures on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury for 2023 when they should have reported $615,436. The annual Project and Expenditure Report due in April 2023 was for the reporting period ending March 31, 2023. Questioned Costs: $5,869,403. Context: The County opted to spend the CSLFRF’s award under the Revenue Replacement category which allows spending on broader types of government services. Effect: Noncompliance with federal reporting requirements. Cause: County staff responsible for completing and submitting the Annual Project and Expenditure report misinterpreted the guidance and reported planned expenditures versus actual expenditures under revenue replacement. Recommendation: We recommend the County review U.S. Department of the Treasury guidance and form instructions to ensure the County is correctly reporting CSLFRF activity. View of Responsible Official: Concur

2023-003 Suspension and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1336; 2022 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain internal control over federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two covered transactions tested, the verification for suspended or debarred vendors was not performed prior to entering into the covered transactions. Questioned Costs: None Context: The County entered into a total of 12 covered transactions for this grant during 2023. The County performed the SAM.gov search and obtained the suspension and debarment certifications from each contractor; however, these procedures were performed after the project was started. A sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The project started in March 2023, and the Board did not approve the Coronavirus State and Local Fiscal Recovery Funding for the project until August 2023. Recommendation: We recommend the County maintain documentation to demonstrate that vendors are not suspended, debarred, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur