Finding 2021-103 Allocation of Forest Reserve Funds (Repeat Finding)
(Material Weakness, Compliance Finding)
Assistance Listing Number: 10.665
Cluster Title: Forest Service Schools and Roads Cluster
Program Title: Schools and Roads – Grants to States
Federal Agency: U.S. Department of Agriculture
Award Year: 2021
Award Number: None
Compliance Requirements: Special Tests and Provisions
Question Costs: None
Criteria: Arizona Revised Statutes (A.R.S.) 11-497 requires that the counties’ share of pass-through
forest reserve monies from the United States be disbursed for the benefit of public schools and
public roads at the direction of the board of supervisors. Further, a county may allocate a
disproportionate amount of forest reserve monies between public schools and public roads as long
as both categories receive a real benefit.
Condition and context: Forest reserve monies for Apache County were not properly disbursed for
the benefit of public schools and public roads in accordance with A.R.S. 11-497. The County instead
disbursed the entire annual allocation of $558,547 to public school districts. This finding is similar to
prior year finding 2020-103.
Cause: The cause is that the Apache County Board of Supervisors decided that the County public
schools had a greater need for funding than roads projects.
Effect: The effect is that the County did not expend a portion of the grant monies on public roads
and therefore knowingly continued to violate state statute.
Recommendation: We recommend that the County stop violating state statute and distribute forest
reserve monies in a manner that benefits both public schools and public roads as required by A.R.S.
11-497.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-101 Single Audit Reporting Package Not Filed Timely (Repeat Finding) (Material
Weakness, Compliance Finding)
Assistance Listing Number: 21.019
Cluster Title: N/A
Program Titles: Coronavirus Relief Funds
Federal Agency: U.S. Department of Treasury
Award Year: 2020
Award Number: None
Compliance Requirement: Reporting
Question Costs: None
Criteria: The terms of the County’s federally funded grants and contracts and the Uniform Guidance
require the submission of a single audit reporting package to the Federal Audit Clearinghouse within
nine months of the auditees’ fiscal year-end. A six (6) month extension was provided due to the
Covid-19 pandemic.
Condition and context: The County’s single audit reporting package for the fiscal year ended June
30, 2021, was not submitted to the Federal Audit Clearinghouse within nine months after the
County’s year-end or within the extended period. This finding is similar to prior year finding 2020-
101.
Cause: The cause was a continued lack of resources devoted to the accounting and year-end
closing.
Effect: The effect is the untimely submission of the single audit reporting package resulting in
noncompliance with federal requirements.
Recommendation: We recommend that the County evaluate its resources necessary to complete
the year-end closing and financial reporting process and consider the need to devote additional
resources to the financial reporting process. Doing so will improve the timeliness of the
County’s submittal to the Federal Audit Clearinghouse.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-102 Preparation of Schedule of Expenditures of Federal Awards (Repeat
Finding) (Material Weakness, Compliance Finding)
Assistance Listing Number: 21.019
Cluster Title: N/A
Program Titles: Coronavirus Relief Funds
Federal Agency: U.S. Department of Treasury
Award Year: 2020
Award Number: None
Compliance Requirement: Reporting
Question Costs: None
Criteria: Uniform Guidance, requires that the County identify in its accounts all federal awards
expended. This Circular also requires award identification to include, as applicable, the Assistance
Listing title and number, the award number and years, the name of the federal granting agency, and
the name of the pass-through entity.
Condition and context: The Schedule of Expenditures of Federal Awards (SEFA) was not
complete as it did not identify all federal grants and included the wrong expenditure amounts for
some grants. Revisions to the SEFA were necessary that resulted in material grant expenditures
that were reported inproperly on originally provided SEFA. This finding is similar to prior year finding
2020-102.
Cause: The County does not have adequate policies and procedures in place to ensure that all
federal grants are identified and included on the SEFA with the correct expenditure amount.
Effect: The County’s initial SEFA was not prepared in accordance with Uniform Guidance.
Recommendation: The County should establish a grants management department to identify all
federal awards received and expended, as well as the federal programs under which they were
received. Also, a thorough review of the general ledger should be performed to ensure that all federal
awards are identified and reported on the SEFA.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-104 Allocation of Coronavirus Relief Funds Funds
(Material Weakness, Compliance Finding)
Assistance Listing Number: 21.019
Cluster Title: N/A
Program Titles: Coronavirus Relief Funds
Federal Agency: U.S. Department of Treasury
Award Year: 2020
Award Number: None
Compliance Requirement: Allowable Costs
Question Costs: $2,460,485
Criteria: Coronavirus Relief Fund Guidance for State, Territorial, Local and Tribal Governments as
provided by the Department of Treasury indicates that grant expenditures should be used for
expenditures not accounted for in the budget most recently approved. The funds may be used for
payroll and related expenses of public employees that are not substantially dedicated to mitigating
or responding to the Covid-19 public health emergency. However, the County should allocate
expenses consistently within the County’s policies using timesheets or other means of tracking
actual time spent on the activities related to responding to the Covid-19 public health emergency.
Condition and context: The County used overall accounting data when allocating payroll and
related expenses to the Coronavirus relief grant. The County first applied the grant funds to
departments that met the definition of substantially dedicated employees. As there was remaining
funds awarded the County applied the remaining funds to departments that would not meet the
definition of substantially dedicated. These departments included the County attorney, constables,
clerk of the court, probation and justice of the peace courts. The County did not maintain sufficient
documentation to substantiate that employees within these departments were providing services
relating to responding to the Covid-19 public health emergency. Expenses were not adequately
defined by actual employee or pay period. Instead general payroll expenses were allocated from the
departments identified. The total expenses allocated to the grant that did not meet the definition of
substantially dedicated were $2,460,485.
Cause: The County received guidance from the pass-through agency indicating that they could
apply grant funds to the departments indicated. The County relied on this guidance when
determining how to use the remaining funds, without first obtaining an understanding of the U.S.
Department of Treasury requirements for the program.
Effect: The effect is that the County did not expend a portion of the grant monies in accordance with
the Treasury department guidance. There was not adequate documentation maintained to ensure
that expenses were used for allowable purposes as intended by the grant.
Recommendation: We recommend that the County establish policies and procedures to ensure
that grant funds are used in accordance with grant agreements and other guidance. Adequate
documentation should be maintained to ensure that expenses are substantiated and supported.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-103 Allocation of Forest Reserve Funds (Repeat Finding)
(Material Weakness, Compliance Finding)
Assistance Listing Number: 10.665
Cluster Title: Forest Service Schools and Roads Cluster
Program Title: Schools and Roads – Grants to States
Federal Agency: U.S. Department of Agriculture
Award Year: 2021
Award Number: None
Compliance Requirements: Special Tests and Provisions
Question Costs: None
Criteria: Arizona Revised Statutes (A.R.S.) 11-497 requires that the counties’ share of pass-through
forest reserve monies from the United States be disbursed for the benefit of public schools and
public roads at the direction of the board of supervisors. Further, a county may allocate a
disproportionate amount of forest reserve monies between public schools and public roads as long
as both categories receive a real benefit.
Condition and context: Forest reserve monies for Apache County were not properly disbursed for
the benefit of public schools and public roads in accordance with A.R.S. 11-497. The County instead
disbursed the entire annual allocation of $558,547 to public school districts. This finding is similar to
prior year finding 2020-103.
Cause: The cause is that the Apache County Board of Supervisors decided that the County public
schools had a greater need for funding than roads projects.
Effect: The effect is that the County did not expend a portion of the grant monies on public roads
and therefore knowingly continued to violate state statute.
Recommendation: We recommend that the County stop violating state statute and distribute forest
reserve monies in a manner that benefits both public schools and public roads as required by A.R.S.
11-497.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-101 Single Audit Reporting Package Not Filed Timely (Repeat Finding) (Material
Weakness, Compliance Finding)
Assistance Listing Number: 21.019
Cluster Title: N/A
Program Titles: Coronavirus Relief Funds
Federal Agency: U.S. Department of Treasury
Award Year: 2020
Award Number: None
Compliance Requirement: Reporting
Question Costs: None
Criteria: The terms of the County’s federally funded grants and contracts and the Uniform Guidance
require the submission of a single audit reporting package to the Federal Audit Clearinghouse within
nine months of the auditees’ fiscal year-end. A six (6) month extension was provided due to the
Covid-19 pandemic.
Condition and context: The County’s single audit reporting package for the fiscal year ended June
30, 2021, was not submitted to the Federal Audit Clearinghouse within nine months after the
County’s year-end or within the extended period. This finding is similar to prior year finding 2020-
101.
Cause: The cause was a continued lack of resources devoted to the accounting and year-end
closing.
Effect: The effect is the untimely submission of the single audit reporting package resulting in
noncompliance with federal requirements.
Recommendation: We recommend that the County evaluate its resources necessary to complete
the year-end closing and financial reporting process and consider the need to devote additional
resources to the financial reporting process. Doing so will improve the timeliness of the
County’s submittal to the Federal Audit Clearinghouse.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-102 Preparation of Schedule of Expenditures of Federal Awards (Repeat
Finding) (Material Weakness, Compliance Finding)
Assistance Listing Number: 21.019
Cluster Title: N/A
Program Titles: Coronavirus Relief Funds
Federal Agency: U.S. Department of Treasury
Award Year: 2020
Award Number: None
Compliance Requirement: Reporting
Question Costs: None
Criteria: Uniform Guidance, requires that the County identify in its accounts all federal awards
expended. This Circular also requires award identification to include, as applicable, the Assistance
Listing title and number, the award number and years, the name of the federal granting agency, and
the name of the pass-through entity.
Condition and context: The Schedule of Expenditures of Federal Awards (SEFA) was not
complete as it did not identify all federal grants and included the wrong expenditure amounts for
some grants. Revisions to the SEFA were necessary that resulted in material grant expenditures
that were reported inproperly on originally provided SEFA. This finding is similar to prior year finding
2020-102.
Cause: The County does not have adequate policies and procedures in place to ensure that all
federal grants are identified and included on the SEFA with the correct expenditure amount.
Effect: The County’s initial SEFA was not prepared in accordance with Uniform Guidance.
Recommendation: The County should establish a grants management department to identify all
federal awards received and expended, as well as the federal programs under which they were
received. Also, a thorough review of the general ledger should be performed to ensure that all federal
awards are identified and reported on the SEFA.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.
Finding 2021-104 Allocation of Coronavirus Relief Funds Funds
(Material Weakness, Compliance Finding)
Assistance Listing Number: 21.019
Cluster Title: N/A
Program Titles: Coronavirus Relief Funds
Federal Agency: U.S. Department of Treasury
Award Year: 2020
Award Number: None
Compliance Requirement: Allowable Costs
Question Costs: $2,460,485
Criteria: Coronavirus Relief Fund Guidance for State, Territorial, Local and Tribal Governments as
provided by the Department of Treasury indicates that grant expenditures should be used for
expenditures not accounted for in the budget most recently approved. The funds may be used for
payroll and related expenses of public employees that are not substantially dedicated to mitigating
or responding to the Covid-19 public health emergency. However, the County should allocate
expenses consistently within the County’s policies using timesheets or other means of tracking
actual time spent on the activities related to responding to the Covid-19 public health emergency.
Condition and context: The County used overall accounting data when allocating payroll and
related expenses to the Coronavirus relief grant. The County first applied the grant funds to
departments that met the definition of substantially dedicated employees. As there was remaining
funds awarded the County applied the remaining funds to departments that would not meet the
definition of substantially dedicated. These departments included the County attorney, constables,
clerk of the court, probation and justice of the peace courts. The County did not maintain sufficient
documentation to substantiate that employees within these departments were providing services
relating to responding to the Covid-19 public health emergency. Expenses were not adequately
defined by actual employee or pay period. Instead general payroll expenses were allocated from the
departments identified. The total expenses allocated to the grant that did not meet the definition of
substantially dedicated were $2,460,485.
Cause: The County received guidance from the pass-through agency indicating that they could
apply grant funds to the departments indicated. The County relied on this guidance when
determining how to use the remaining funds, without first obtaining an understanding of the U.S.
Department of Treasury requirements for the program.
Effect: The effect is that the County did not expend a portion of the grant monies in accordance with
the Treasury department guidance. There was not adequate documentation maintained to ensure
that expenses were used for allowable purposes as intended by the grant.
Recommendation: We recommend that the County establish policies and procedures to ensure
that grant funds are used in accordance with grant agreements and other guidance. Adequate
documentation should be maintained to ensure that expenses are substantiated and supported.
County’s Response: The County’s responsible officials’ views and planned corrective action are in
its corrective action plan at the end of the report.