Finding 2021-005 – Lack of County-Wide Controls Over Major Federal Programs – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Homeland Security
ASSISTANCE LISTING NO: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2020 and 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principals; Period of Performance; Reporting; Special Tests & Provisions
QUESTIONED COSTS: $-0-
Condition: County-wide controls regarding Control Environment, Risk Assessment, Information and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County complies with grant requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and could lead to a loss of federal funds to the County.
Recommendation: OSAI recommends that the County design and implement a system of internal controls to ensure compliance with grant requirements.
Management Response:
Chairman of the Board of County Commissioners: This is something we will address in our County Officers’ meetings.
County Clerk: All persons involved in federal grants will set time aside to develop policies and procedures regarding the county-wide controls over federal grants.
County Treasurer: I will make sure I communicate clearly with the County Clerk and others involved in federal grants and encourage other offices to do the same.
County Commissioner District 2: I did not take office until January 2021; therefore, I was not in office during FEMA disaster #4438 declared in 2019. In any future FEMA declared emergencies, I will exercise due diligence and oversee any and all documents relative to the disaster.
County Commissioner District 3: I will research information regarding the federal grants the County receives and discuss them in the County Officers’ meetings.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04 states in part:
Components, Principles, and Attributes
Control Environment – the foundation for an internal control system. It provides the discipline and structure to help an entity achieve its objectives.
Risk Assessment – Assesses the risks facing the entity as it seeks to achieve its objectives. This assessment provides the basis for developing appropriate risk responses.
Information and Communication – The quality information management and personnel communicate and use to support the internal control system.
Monitoring – Activities management establishes and operates to assess the quality of performance over time and promptly resolve the findings of audits and other reviews.
Finding 2021-006 – Lack of Internal Controls Over Major Federal Programs – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Homeland Security
ASSISTANCE LISTING NO: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principals; Period of Performance; Reporting; Special Tests and Provisions
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal disbursements, we noted that Alfalfa County has not established procedures to ensure compliance with the following requirements: Activities Allowed or Unallowed; Allowable Costs; Period of Performance; Reporting; Special Tests and Provisions.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition resulted in noncompliance to grant requirements and could lead to a loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program and implement internal control procedures to ensure compliance with requirements.
Management Response:
Chairman of the Board of County Commissioners: I will research and educate myself on the compliance requirements, so I can take a proactive approach to managing major federal programs.
County Commissioner District 2: I did not take office until January 2021; therefore, I was not in office during FEMA disaster #4438 declared in 2019. In any future FEMA declared emergencies, I will exercise due diligence and oversee any and all documents relative to the disaster.
County Commissioner District 3: I will research information regarding the federal grants the County receives and discuss them in the County Officers’ meetings.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Further, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part:
Objectives of an Entity – Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.
Finding 2021-007 – Noncompliance with Compliance Requirements: Allowable Costs/Cost Principles; Period of Performance; Reporting – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Home Security
ASSISTANCE LISTING NO: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2020 and 2021
CONTROL CATEGORY: Allowable Costs/Cost Principals; Period of Performance; Reporting
QUESTIONED COSTS: $67,742
Condition: Upon inquiry of county personnel, review of documentation and procedures, and a test of 100% of federal expenditures totaling $592,062, the following weaknesses were noted:
Project Worksheet 274 (D3) Questioned Cost - $1,019
• Equipment costs were not calculated with correct Federal Emergency Management Agency (FEMA) rates resulting in $1,019 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 419 (D2) Questioned Costs - $6,223 (Activities Allowed/Allowable Costs - $6,223 Period of Performance - $5,467)
• One (1) Daily Activity Report in the amount of $5,467 accrued expenditures that occurred after the performance deadline. Additionally, the work performed was not listed on the approved project worksheet.
• One (1) Daily Activity Report in the amount of $5,467 contained costs that were not described on the approved project worksheet.
• Equipment costs were not calculated with correct FEMA rates resulting in $708 of unsupported costs.
• Labor costs were not calculated with appropriate rates resulting in $48 of unsupported costs.
• Four (4) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 420 (D2) Questioned Costs - $5,278
• Equipment costs were not calculated with correct FEMA rates resulting in $4,981 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $274 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $23 of unsupported costs.
• Three (3) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 810 (D1) Questioned Costs - $11,987
• The labor hours reported on the Daily Activity Reports totaling $11,987 do not agree to the total hours worked reported on the employee timesheet.
• Three (3) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 843 (D1) Questioned Costs - $11,482
• Equipment costs were not calculated with correct FEMA rates resulting in $9,106 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $2,160 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $216 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 889 (D1) Questioned Costs - $1,870
• The labor hours reported on the Daily Activity Reports totaling $1,680 do not agree to the total hours worked reported on the employee timesheet.
• Equipment costs were not calculated with correct FEMA rates resulting in $190 of unsupported costs.
• Four (4) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 995 (D1) Questioned Costs - $8,993
• The labor hours reported on the Daily Activity Reports totaling $8,019 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $564 of unsupported costs.
• Total project costs were not met resulting in $410 unsubstantiated costs.
• Three (3) daily activity reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
• One (1) quarterly report was not submitted timely.
Project Worksheet 1023 (D1) Questioned Costs - $134
• The labor hours reported on the Daily Activity Reports totaling $134 do not agree to the total hours worked reported on the employee timesheet.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1024 (D1) Questioned Costs - $3,238
• Equipment costs were not calculated with correct FEMA rates resulting in $1,544 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $1,362 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $332 of unsupported costs.
• One (1) Daily Activity Report was not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1066 (D1) Questioned Costs - $4,266
• The labor hours reported on the Daily Activity Reports totaling $4,266 do not agree to the total hours worked reported on the employee timesheet.
• Three (3) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1073 (D1) Questioned Costs - $3,701
• The labor hours reported on the Daily Activity Reports totaling $3,589 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $112 of unsupported costs.
• One (1) Daily Activity Report was not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1077 (D1) Questioned Costs - $5,035
• Equipment costs were not calculated with correct FEMA rates resulting in $2,856 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $2,161 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $18 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1098 (D1) Questioned Costs - $2,934
• The labor hours reported on the Daily Activity Reports totaling $1,680 do not agree to the total hours worked reported on the employee timesheet.
• One (1) Daily Activity Report in the amount of $912 contained costs that were not described on the approved project worksheet.
• Material costs were not calculated with accurate unit prices resulting in $235 of unsupported costs.
• Equipment costs were not calculated with correct FEMA rates resulting in $107 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1101 (D1) Questioned Costs - $1,582
• The labor hours reported on the Daily Activity Reports totaling $1,582 do not agree to the total hours worked reported on the employee timesheet.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements.
Effect of Condition: These conditions resulted in noncompliance to grant requirements and could result in loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of the compliance requirements for federal programs and implement internal control procedures to ensure compliance with all requirements. We further recommend all documentation be properly maintained for inspection.
Management Response:
Chairman of the Board of County Commissioners: Because I was not in office during this period, I am not able to say for certain what transpired. I will practice oversight and be involved in the documentation of federal grant expenditures.
County Commissioner District 2: I did not take office until January 2021; therefore, I was not in office during FEMA disaster #4438 declared in 2019. In any future FEMA declared emergencies, I will exercise due diligence and oversee any and all documents relative to the disaster.
County Commissioner District 3: I will make sure we use the correct FEMA equipment rates. I will review the documents prepared by my administrative assistant.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 2 CFR § 200.318 (a), General procurement standards, reads as follows:
The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. [….]
Title 2 CFR § 200.84 Questioned Cost reads as follows:
Questioned cost means a cost that is questioned by the auditor because of an audit finding:
(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for fund used to match Federal funds;
(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or
(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.
Further, GAO Standards – Section 2 – Objectives of an Entity – OV2.23 states in part:
Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. […]
Finding 2021-005 – Lack of County-Wide Controls Over Major Federal Programs – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Homeland Security
ASSISTANCE LISTING NO: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2020 and 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principals; Period of Performance; Reporting; Special Tests & Provisions
QUESTIONED COSTS: $-0-
Condition: County-wide controls regarding Control Environment, Risk Assessment, Information and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County complies with grant requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and could lead to a loss of federal funds to the County.
Recommendation: OSAI recommends that the County design and implement a system of internal controls to ensure compliance with grant requirements.
Management Response:
Chairman of the Board of County Commissioners: This is something we will address in our County Officers’ meetings.
County Clerk: All persons involved in federal grants will set time aside to develop policies and procedures regarding the county-wide controls over federal grants.
County Treasurer: I will make sure I communicate clearly with the County Clerk and others involved in federal grants and encourage other offices to do the same.
County Commissioner District 2: I did not take office until January 2021; therefore, I was not in office during FEMA disaster #4438 declared in 2019. In any future FEMA declared emergencies, I will exercise due diligence and oversee any and all documents relative to the disaster.
County Commissioner District 3: I will research information regarding the federal grants the County receives and discuss them in the County Officers’ meetings.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04 states in part:
Components, Principles, and Attributes
Control Environment – the foundation for an internal control system. It provides the discipline and structure to help an entity achieve its objectives.
Risk Assessment – Assesses the risks facing the entity as it seeks to achieve its objectives. This assessment provides the basis for developing appropriate risk responses.
Information and Communication – The quality information management and personnel communicate and use to support the internal control system.
Monitoring – Activities management establishes and operates to assess the quality of performance over time and promptly resolve the findings of audits and other reviews.
Finding 2021-006 – Lack of Internal Controls Over Major Federal Programs – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Homeland Security
ASSISTANCE LISTING NO: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principals; Period of Performance; Reporting; Special Tests and Provisions
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal disbursements, we noted that Alfalfa County has not established procedures to ensure compliance with the following requirements: Activities Allowed or Unallowed; Allowable Costs; Period of Performance; Reporting; Special Tests and Provisions.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition resulted in noncompliance to grant requirements and could lead to a loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program and implement internal control procedures to ensure compliance with requirements.
Management Response:
Chairman of the Board of County Commissioners: I will research and educate myself on the compliance requirements, so I can take a proactive approach to managing major federal programs.
County Commissioner District 2: I did not take office until January 2021; therefore, I was not in office during FEMA disaster #4438 declared in 2019. In any future FEMA declared emergencies, I will exercise due diligence and oversee any and all documents relative to the disaster.
County Commissioner District 3: I will research information regarding the federal grants the County receives and discuss them in the County Officers’ meetings.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Further, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part:
Objectives of an Entity – Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.
Finding 2021-007 – Noncompliance with Compliance Requirements: Allowable Costs/Cost Principles; Period of Performance; Reporting – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Home Security
ASSISTANCE LISTING NO: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2020 and 2021
CONTROL CATEGORY: Allowable Costs/Cost Principals; Period of Performance; Reporting
QUESTIONED COSTS: $67,742
Condition: Upon inquiry of county personnel, review of documentation and procedures, and a test of 100% of federal expenditures totaling $592,062, the following weaknesses were noted:
Project Worksheet 274 (D3) Questioned Cost - $1,019
• Equipment costs were not calculated with correct Federal Emergency Management Agency (FEMA) rates resulting in $1,019 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 419 (D2) Questioned Costs - $6,223 (Activities Allowed/Allowable Costs - $6,223 Period of Performance - $5,467)
• One (1) Daily Activity Report in the amount of $5,467 accrued expenditures that occurred after the performance deadline. Additionally, the work performed was not listed on the approved project worksheet.
• One (1) Daily Activity Report in the amount of $5,467 contained costs that were not described on the approved project worksheet.
• Equipment costs were not calculated with correct FEMA rates resulting in $708 of unsupported costs.
• Labor costs were not calculated with appropriate rates resulting in $48 of unsupported costs.
• Four (4) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 420 (D2) Questioned Costs - $5,278
• Equipment costs were not calculated with correct FEMA rates resulting in $4,981 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $274 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $23 of unsupported costs.
• Three (3) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 810 (D1) Questioned Costs - $11,987
• The labor hours reported on the Daily Activity Reports totaling $11,987 do not agree to the total hours worked reported on the employee timesheet.
• Three (3) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 843 (D1) Questioned Costs - $11,482
• Equipment costs were not calculated with correct FEMA rates resulting in $9,106 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $2,160 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $216 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 889 (D1) Questioned Costs - $1,870
• The labor hours reported on the Daily Activity Reports totaling $1,680 do not agree to the total hours worked reported on the employee timesheet.
• Equipment costs were not calculated with correct FEMA rates resulting in $190 of unsupported costs.
• Four (4) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 995 (D1) Questioned Costs - $8,993
• The labor hours reported on the Daily Activity Reports totaling $8,019 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $564 of unsupported costs.
• Total project costs were not met resulting in $410 unsubstantiated costs.
• Three (3) daily activity reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
• One (1) quarterly report was not submitted timely.
Project Worksheet 1023 (D1) Questioned Costs - $134
• The labor hours reported on the Daily Activity Reports totaling $134 do not agree to the total hours worked reported on the employee timesheet.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1024 (D1) Questioned Costs - $3,238
• Equipment costs were not calculated with correct FEMA rates resulting in $1,544 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $1,362 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $332 of unsupported costs.
• One (1) Daily Activity Report was not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1066 (D1) Questioned Costs - $4,266
• The labor hours reported on the Daily Activity Reports totaling $4,266 do not agree to the total hours worked reported on the employee timesheet.
• Three (3) Daily Activity Reports were not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1073 (D1) Questioned Costs - $3,701
• The labor hours reported on the Daily Activity Reports totaling $3,589 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $112 of unsupported costs.
• One (1) Daily Activity Report was not signed by the preparer.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1077 (D1) Questioned Costs - $5,035
• Equipment costs were not calculated with correct FEMA rates resulting in $2,856 of unsupported costs.
• The labor hours reported on the Daily Activity Reports totaling $2,161 do not agree to the total hours worked reported on the employee timesheet.
• Material costs were not calculated with accurate unit prices resulting in $18 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1098 (D1) Questioned Costs - $2,934
• The labor hours reported on the Daily Activity Reports totaling $1,680 do not agree to the total hours worked reported on the employee timesheet.
• One (1) Daily Activity Report in the amount of $912 contained costs that were not described on the approved project worksheet.
• Material costs were not calculated with accurate unit prices resulting in $235 of unsupported costs.
• Equipment costs were not calculated with correct FEMA rates resulting in $107 of unsupported costs.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Project Worksheet 1101 (D1) Questioned Costs - $1,582
• The labor hours reported on the Daily Activity Reports totaling $1,582 do not agree to the total hours worked reported on the employee timesheet.
• Supporting documentation retained from projects were not reviewed or approved by anyone other than the preparer.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements.
Effect of Condition: These conditions resulted in noncompliance to grant requirements and could result in loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of the compliance requirements for federal programs and implement internal control procedures to ensure compliance with all requirements. We further recommend all documentation be properly maintained for inspection.
Management Response:
Chairman of the Board of County Commissioners: Because I was not in office during this period, I am not able to say for certain what transpired. I will practice oversight and be involved in the documentation of federal grant expenditures.
County Commissioner District 2: I did not take office until January 2021; therefore, I was not in office during FEMA disaster #4438 declared in 2019. In any future FEMA declared emergencies, I will exercise due diligence and oversee any and all documents relative to the disaster.
County Commissioner District 3: I will make sure we use the correct FEMA equipment rates. I will review the documents prepared by my administrative assistant.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 2 CFR § 200.318 (a), General procurement standards, reads as follows:
The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. [….]
Title 2 CFR § 200.84 Questioned Cost reads as follows:
Questioned cost means a cost that is questioned by the auditor because of an audit finding:
(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for fund used to match Federal funds;
(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or
(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.
Further, GAO Standards – Section 2 – Objectives of an Entity – OV2.23 states in part:
Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. […]