2023-008 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over
Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County does not maintain written procedures as required by 2 CFR 200, Subparts D
and E of the Uniform Guidance.
Criteria - Per 2 CFR 200.302(b)(6), Financial Management, the financial management system of each
non-federal entity must provide the following: Written procedures to implement the requirements
of 200.305 Federal Payment.
Per 2 CFR 200.302(b)(7), Financial Management, the financial management system of each nonfederal
entity must provide the following: Written procedures for determining the allowability of
costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the
Federal award.
Cause - The County does not have written procedures for the federal program's financial
management requirements.
Effect - Not having written procedures for the aforementioned puts the County in direct violation of
Federal requirements over Federal programs under the Uniform Guidance, which could result in a
loss of programs, funds and/or repayment of federal monies already awarded back to the Federal
government.
Auditor’s Recommendation - The County should establish the required written procedures for
federal monies and have them available to all personnel who work with federal programs.
Views of Responsible Officials and Planned Corrective Action – The County will have written
procedures for the federal program financial management requirements submitted to the Grant
County Board of Commissioners for approval and implemented by all personnel.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-008 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over
Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County does not maintain written procedures as required by 2 CFR 200, Subparts D
and E of the Uniform Guidance.
Criteria - Per 2 CFR 200.302(b)(6), Financial Management, the financial management system of each
non-federal entity must provide the following: Written procedures to implement the requirements
of 200.305 Federal Payment.
Per 2 CFR 200.302(b)(7), Financial Management, the financial management system of each nonfederal
entity must provide the following: Written procedures for determining the allowability of
costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the
Federal award.
Cause - The County does not have written procedures for the federal program's financial
management requirements.
Effect - Not having written procedures for the aforementioned puts the County in direct violation of
Federal requirements over Federal programs under the Uniform Guidance, which could result in a
loss of programs, funds and/or repayment of federal monies already awarded back to the Federal
government.
Auditor’s Recommendation - The County should establish the required written procedures for
federal monies and have them available to all personnel who work with federal programs.
Views of Responsible Officials and Planned Corrective Action – The County will have written
procedures for the federal program financial management requirements submitted to the Grant
County Board of Commissioners for approval and implemented by all personnel.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-009 – Procurement, Small Purchase, and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k that is not included in the small
purchase policy included transactions totaling $18,000. The County does not review for suspension
and debarment prior to entering into a covered transaction. During our review of testwork, two (2)
out of two (2) transactions did not contain the required quotes obtained prior to purchase.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
Proper procurement method not utilized.
Questioned Costs – Questioned and likely costs of $18,000
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly and train staff in the purchasing department on the requirements for all thresholds. In
addition the County needs to include a section on entering into covered transactions and train staff
in the purchasing department of the requirement to check for any suspension or debarment.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –No later than August 31, 2024.
2023-010 – Procurement, Small Purchase and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k not included in small purchase
policy included transactions totaling $24,308. The County does not review for suspension and
debarment prior to entering into a covered transaction. During our review of testwork, two (2) of
two (2) transactions tested did not have the supporting documentation of State Price Agreements
utilized.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
The County is not retaining documentation in the decision to utilize Price Agreements.
Questioned Costs – Questioned and likely costs of $24,308
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly. In addition the County needs to include a section on entering into covered transactions
and train staff in the purchasing department of the requirement to check for any suspension or
debarment and the need to retain supporting documentation.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
-
Cash Management Controls (2023-011 – Cash Management Controls (Material Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County relies on the pass-through entity to approve requests for reimbursements.
Criteria - Per 2 CFR 200.303(a), 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).
Cause - The County does not have policies and procedures in place to ensure request for
reimbursements are being prepared then reviewed and approved by another employee prior to
submitting to the pass-through entity.
Effect - The County could inaccurately report unallowable expenses for reimbursement that would
not be detected by controls that are not operating.
Auditor’s Recommendation - The auditor recommends the County develop and implement
adequate policies and procedures to ensure another individual is reviewing and approving
reimbursement requests prior to submitting to the pass-through entity and provide training to
those personnel that will be charged with the task.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines. A separation of duties has
been implemented verbally with our staff. Andrea Montoya and our new Finance Director will be
reviewing and approving these reimbursements moving forward. The verbal corrective action is in
effect immediately.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-012 Equipment and Real Property Management (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County was not able to provide a complete and accurate equipment listing tracking
items purchased with federal funding nor did the County conduct a physical inventory.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the
property, a serial number or other identification number, the source of funding for the property
(including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of
Federal participation in the project costs for the Federal award under which the property was
acquired, the location, use and condition of the property, and any ultimate disposition data
including the date of disposal and sale price of the property.
Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results
reconciled with the property records at least once every 2 years.
Cause - The County is not following policy and procedures to ensure that equipment purchased with
federal funds is maintained and tracked and the County performing a physical inventory at a
minimum of every two years.
Effect - The County could dispose of or lose federally funded equipment without following federal
guidelines.
Auditor’s Recommendation - The auditor recommends the County enhance the design of its control
activities and policies and procedures should be developed to ensure physical inventories are taken
at least once every two years and that they create a tool to assist in tracking and maintaining
equipment purchased with federal funds.
Views of Responsible Officials and Planned Corrective Action - The County will enhance the control
activities and procedures to ensure physical inventories are taken at least every two years and will
track and maintain equipment purchased with federal funds.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –This will be a documented procedure by August 31, 2024.
The County will have a physical inventory completed by December 31, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - During reconciliation of the general ledger to SEFA, it was noted administrative
percentages of payroll were included on reimbursement requests monthly that did not include
supporting documentation on what the percentages were based on or support by the employee
documenting the time spent on the grant. No documentation is maintained to support the process
by which these estimates were produced, or the relationship to the activities actually performed.
No analysis of actual activities versus budgeted activities is performed. There are no controls in
place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the
amounts charged.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise
authorized by statute, costs must meet the following general criteria in order to be allowable under
Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal
award and be allocable thereto under these principles; paragraph (g) Be adequately documented.
Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed: (i) Be
supported by a system of internal control which provides reasonable assurance that the charges are
accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary
or wages among specific activities or cost objectives if the employee works on more than one
Federal award; a Federal award and non-Federal award; (viii) Budget estimates (i.e., estimates
determined before the services are performed) alone do not qualify as support for charges to
Federal awards, but may be used for interim accounting purposes, provided that: A) The system for
establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's
written policies) are identified and entered into the records in a timely manner. Short term (such as
one or two months) fluctuation between workload categories need not be considered as long as the
distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal
entity's system of internal controls includes processes to review after-the-fact interim charges
made to a Federal award based on budget estimates. All necessary adjustment must be made such
that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Cause - The County does not have policies and procedures in place to ensure the allowability of the
percent allocations or retain detailed approved supporting documentation.
Questioned Costs – Questioned and likely costs of $77,520
Effect - The County could spend federal award funding on time not spent on the grant which could
lead to disallowed costs.
Auditor’s Recommendation - The auditor recommends the County strengthen policies and
procedures to ensure the charging of administrative costs for allowability is based off supported
calculations or documented time spent to grant.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines and charging of
administrative costs for documented time spent on grants with supporting calculations will be
documented for clarity and consistency.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date - No later than August 31, 2024.
2023-008 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over
Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County does not maintain written procedures as required by 2 CFR 200, Subparts D
and E of the Uniform Guidance.
Criteria - Per 2 CFR 200.302(b)(6), Financial Management, the financial management system of each
non-federal entity must provide the following: Written procedures to implement the requirements
of 200.305 Federal Payment.
Per 2 CFR 200.302(b)(7), Financial Management, the financial management system of each nonfederal
entity must provide the following: Written procedures for determining the allowability of
costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the
Federal award.
Cause - The County does not have written procedures for the federal program's financial
management requirements.
Effect - Not having written procedures for the aforementioned puts the County in direct violation of
Federal requirements over Federal programs under the Uniform Guidance, which could result in a
loss of programs, funds and/or repayment of federal monies already awarded back to the Federal
government.
Auditor’s Recommendation - The County should establish the required written procedures for
federal monies and have them available to all personnel who work with federal programs.
Views of Responsible Officials and Planned Corrective Action – The County will have written
procedures for the federal program financial management requirements submitted to the Grant
County Board of Commissioners for approval and implemented by all personnel.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-010 – Procurement, Small Purchase and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k not included in small purchase
policy included transactions totaling $24,308. The County does not review for suspension and
debarment prior to entering into a covered transaction. During our review of testwork, two (2) of
two (2) transactions tested did not have the supporting documentation of State Price Agreements
utilized.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
The County is not retaining documentation in the decision to utilize Price Agreements.
Questioned Costs – Questioned and likely costs of $24,308
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly. In addition the County needs to include a section on entering into covered transactions
and train staff in the purchasing department of the requirement to check for any suspension or
debarment and the need to retain supporting documentation.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
-
Cash Management Controls (2023-011 – Cash Management Controls (Material Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County relies on the pass-through entity to approve requests for reimbursements.
Criteria - Per 2 CFR 200.303(a), 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).
Cause - The County does not have policies and procedures in place to ensure request for
reimbursements are being prepared then reviewed and approved by another employee prior to
submitting to the pass-through entity.
Effect - The County could inaccurately report unallowable expenses for reimbursement that would
not be detected by controls that are not operating.
Auditor’s Recommendation - The auditor recommends the County develop and implement
adequate policies and procedures to ensure another individual is reviewing and approving
reimbursement requests prior to submitting to the pass-through entity and provide training to
those personnel that will be charged with the task.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines. A separation of duties has
been implemented verbally with our staff. Andrea Montoya and our new Finance Director will be
reviewing and approving these reimbursements moving forward. The verbal corrective action is in
effect immediately.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-012 Equipment and Real Property Management (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County was not able to provide a complete and accurate equipment listing tracking
items purchased with federal funding nor did the County conduct a physical inventory.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the
property, a serial number or other identification number, the source of funding for the property
(including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of
Federal participation in the project costs for the Federal award under which the property was
acquired, the location, use and condition of the property, and any ultimate disposition data
including the date of disposal and sale price of the property.
Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results
reconciled with the property records at least once every 2 years.
Cause - The County is not following policy and procedures to ensure that equipment purchased with
federal funds is maintained and tracked and the County performing a physical inventory at a
minimum of every two years.
Effect - The County could dispose of or lose federally funded equipment without following federal
guidelines.
Auditor’s Recommendation - The auditor recommends the County enhance the design of its control
activities and policies and procedures should be developed to ensure physical inventories are taken
at least once every two years and that they create a tool to assist in tracking and maintaining
equipment purchased with federal funds.
Views of Responsible Officials and Planned Corrective Action - The County will enhance the control
activities and procedures to ensure physical inventories are taken at least every two years and will
track and maintain equipment purchased with federal funds.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –This will be a documented procedure by August 31, 2024.
The County will have a physical inventory completed by December 31, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - During reconciliation of the general ledger to SEFA, it was noted administrative
percentages of payroll were included on reimbursement requests monthly that did not include
supporting documentation on what the percentages were based on or support by the employee
documenting the time spent on the grant. No documentation is maintained to support the process
by which these estimates were produced, or the relationship to the activities actually performed.
No analysis of actual activities versus budgeted activities is performed. There are no controls in
place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the
amounts charged.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise
authorized by statute, costs must meet the following general criteria in order to be allowable under
Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal
award and be allocable thereto under these principles; paragraph (g) Be adequately documented.
Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed: (i) Be
supported by a system of internal control which provides reasonable assurance that the charges are
accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary
or wages among specific activities or cost objectives if the employee works on more than one
Federal award; a Federal award and non-Federal award; (viii) Budget estimates (i.e., estimates
determined before the services are performed) alone do not qualify as support for charges to
Federal awards, but may be used for interim accounting purposes, provided that: A) The system for
establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's
written policies) are identified and entered into the records in a timely manner. Short term (such as
one or two months) fluctuation between workload categories need not be considered as long as the
distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal
entity's system of internal controls includes processes to review after-the-fact interim charges
made to a Federal award based on budget estimates. All necessary adjustment must be made such
that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Cause - The County does not have policies and procedures in place to ensure the allowability of the
percent allocations or retain detailed approved supporting documentation.
Questioned Costs – Questioned and likely costs of $77,520
Effect - The County could spend federal award funding on time not spent on the grant which could
lead to disallowed costs.
Auditor’s Recommendation - The auditor recommends the County strengthen policies and
procedures to ensure the charging of administrative costs for allowability is based off supported
calculations or documented time spent to grant.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines and charging of
administrative costs for documented time spent on grants with supporting calculations will be
documented for clarity and consistency.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date - No later than August 31, 2024.
2023-008 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over
Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County does not maintain written procedures as required by 2 CFR 200, Subparts D
and E of the Uniform Guidance.
Criteria - Per 2 CFR 200.302(b)(6), Financial Management, the financial management system of each
non-federal entity must provide the following: Written procedures to implement the requirements
of 200.305 Federal Payment.
Per 2 CFR 200.302(b)(7), Financial Management, the financial management system of each nonfederal
entity must provide the following: Written procedures for determining the allowability of
costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the
Federal award.
Cause - The County does not have written procedures for the federal program's financial
management requirements.
Effect - Not having written procedures for the aforementioned puts the County in direct violation of
Federal requirements over Federal programs under the Uniform Guidance, which could result in a
loss of programs, funds and/or repayment of federal monies already awarded back to the Federal
government.
Auditor’s Recommendation - The County should establish the required written procedures for
federal monies and have them available to all personnel who work with federal programs.
Views of Responsible Officials and Planned Corrective Action – The County will have written
procedures for the federal program financial management requirements submitted to the Grant
County Board of Commissioners for approval and implemented by all personnel.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-008 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over
Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County does not maintain written procedures as required by 2 CFR 200, Subparts D
and E of the Uniform Guidance.
Criteria - Per 2 CFR 200.302(b)(6), Financial Management, the financial management system of each
non-federal entity must provide the following: Written procedures to implement the requirements
of 200.305 Federal Payment.
Per 2 CFR 200.302(b)(7), Financial Management, the financial management system of each nonfederal
entity must provide the following: Written procedures for determining the allowability of
costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the
Federal award.
Cause - The County does not have written procedures for the federal program's financial
management requirements.
Effect - Not having written procedures for the aforementioned puts the County in direct violation of
Federal requirements over Federal programs under the Uniform Guidance, which could result in a
loss of programs, funds and/or repayment of federal monies already awarded back to the Federal
government.
Auditor’s Recommendation - The County should establish the required written procedures for
federal monies and have them available to all personnel who work with federal programs.
Views of Responsible Officials and Planned Corrective Action – The County will have written
procedures for the federal program financial management requirements submitted to the Grant
County Board of Commissioners for approval and implemented by all personnel.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-009 – Procurement, Small Purchase, and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k that is not included in the small
purchase policy included transactions totaling $18,000. The County does not review for suspension
and debarment prior to entering into a covered transaction. During our review of testwork, two (2)
out of two (2) transactions did not contain the required quotes obtained prior to purchase.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
Proper procurement method not utilized.
Questioned Costs – Questioned and likely costs of $18,000
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly and train staff in the purchasing department on the requirements for all thresholds. In
addition the County needs to include a section on entering into covered transactions and train staff
in the purchasing department of the requirement to check for any suspension or debarment.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –No later than August 31, 2024.
2023-010 – Procurement, Small Purchase and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k not included in small purchase
policy included transactions totaling $24,308. The County does not review for suspension and
debarment prior to entering into a covered transaction. During our review of testwork, two (2) of
two (2) transactions tested did not have the supporting documentation of State Price Agreements
utilized.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
The County is not retaining documentation in the decision to utilize Price Agreements.
Questioned Costs – Questioned and likely costs of $24,308
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly. In addition the County needs to include a section on entering into covered transactions
and train staff in the purchasing department of the requirement to check for any suspension or
debarment and the need to retain supporting documentation.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
-
Cash Management Controls (2023-011 – Cash Management Controls (Material Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County relies on the pass-through entity to approve requests for reimbursements.
Criteria - Per 2 CFR 200.303(a), 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).
Cause - The County does not have policies and procedures in place to ensure request for
reimbursements are being prepared then reviewed and approved by another employee prior to
submitting to the pass-through entity.
Effect - The County could inaccurately report unallowable expenses for reimbursement that would
not be detected by controls that are not operating.
Auditor’s Recommendation - The auditor recommends the County develop and implement
adequate policies and procedures to ensure another individual is reviewing and approving
reimbursement requests prior to submitting to the pass-through entity and provide training to
those personnel that will be charged with the task.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines. A separation of duties has
been implemented verbally with our staff. Andrea Montoya and our new Finance Director will be
reviewing and approving these reimbursements moving forward. The verbal corrective action is in
effect immediately.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-012 Equipment and Real Property Management (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County was not able to provide a complete and accurate equipment listing tracking
items purchased with federal funding nor did the County conduct a physical inventory.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the
property, a serial number or other identification number, the source of funding for the property
(including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of
Federal participation in the project costs for the Federal award under which the property was
acquired, the location, use and condition of the property, and any ultimate disposition data
including the date of disposal and sale price of the property.
Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results
reconciled with the property records at least once every 2 years.
Cause - The County is not following policy and procedures to ensure that equipment purchased with
federal funds is maintained and tracked and the County performing a physical inventory at a
minimum of every two years.
Effect - The County could dispose of or lose federally funded equipment without following federal
guidelines.
Auditor’s Recommendation - The auditor recommends the County enhance the design of its control
activities and policies and procedures should be developed to ensure physical inventories are taken
at least once every two years and that they create a tool to assist in tracking and maintaining
equipment purchased with federal funds.
Views of Responsible Officials and Planned Corrective Action - The County will enhance the control
activities and procedures to ensure physical inventories are taken at least every two years and will
track and maintain equipment purchased with federal funds.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –This will be a documented procedure by August 31, 2024.
The County will have a physical inventory completed by December 31, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - During reconciliation of the general ledger to SEFA, it was noted administrative
percentages of payroll were included on reimbursement requests monthly that did not include
supporting documentation on what the percentages were based on or support by the employee
documenting the time spent on the grant. No documentation is maintained to support the process
by which these estimates were produced, or the relationship to the activities actually performed.
No analysis of actual activities versus budgeted activities is performed. There are no controls in
place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the
amounts charged.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise
authorized by statute, costs must meet the following general criteria in order to be allowable under
Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal
award and be allocable thereto under these principles; paragraph (g) Be adequately documented.
Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed: (i) Be
supported by a system of internal control which provides reasonable assurance that the charges are
accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary
or wages among specific activities or cost objectives if the employee works on more than one
Federal award; a Federal award and non-Federal award; (viii) Budget estimates (i.e., estimates
determined before the services are performed) alone do not qualify as support for charges to
Federal awards, but may be used for interim accounting purposes, provided that: A) The system for
establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's
written policies) are identified and entered into the records in a timely manner. Short term (such as
one or two months) fluctuation between workload categories need not be considered as long as the
distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal
entity's system of internal controls includes processes to review after-the-fact interim charges
made to a Federal award based on budget estimates. All necessary adjustment must be made such
that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Cause - The County does not have policies and procedures in place to ensure the allowability of the
percent allocations or retain detailed approved supporting documentation.
Questioned Costs – Questioned and likely costs of $77,520
Effect - The County could spend federal award funding on time not spent on the grant which could
lead to disallowed costs.
Auditor’s Recommendation - The auditor recommends the County strengthen policies and
procedures to ensure the charging of administrative costs for allowability is based off supported
calculations or documented time spent to grant.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines and charging of
administrative costs for documented time spent on grants with supporting calculations will be
documented for clarity and consistency.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date - No later than August 31, 2024.
2023-008 – Inadequate Policies and Procedures (Significant Deficiency in Internal Controls over
Compliance)
Federal Program Information
Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027
Federal Awarding Agency: U.S. Department of the Treasury
Federal Award ID Number: N/A
Federal Award Year: 2023
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County does not maintain written procedures as required by 2 CFR 200, Subparts D
and E of the Uniform Guidance.
Criteria - Per 2 CFR 200.302(b)(6), Financial Management, the financial management system of each
non-federal entity must provide the following: Written procedures to implement the requirements
of 200.305 Federal Payment.
Per 2 CFR 200.302(b)(7), Financial Management, the financial management system of each nonfederal
entity must provide the following: Written procedures for determining the allowability of
costs in accordance with Subpart E – Cost Principles of this part and the terms and conditions of the
Federal award.
Cause - The County does not have written procedures for the federal program's financial
management requirements.
Effect - Not having written procedures for the aforementioned puts the County in direct violation of
Federal requirements over Federal programs under the Uniform Guidance, which could result in a
loss of programs, funds and/or repayment of federal monies already awarded back to the Federal
government.
Auditor’s Recommendation - The County should establish the required written procedures for
federal monies and have them available to all personnel who work with federal programs.
Views of Responsible Officials and Planned Corrective Action – The County will have written
procedures for the federal program financial management requirements submitted to the Grant
County Board of Commissioners for approval and implemented by all personnel.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-010 – Procurement, Small Purchase and Suspension and Debarment (Material Weakness in
Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County did not apply the correct small purchase threshold for identifying purchases
that need to obtain quotes in their policy. Population $10k-$20k not included in small purchase
policy included transactions totaling $24,308. The County does not review for suspension and
debarment prior to entering into a covered transaction. During our review of testwork, two (2) of
two (2) transactions tested did not have the supporting documentation of State Price Agreements
utilized.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the
micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must
be obtained.
Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not
excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a
clause or condition to the covered transaction.
Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was
unaware all vendors receiving federal funds needed to get checked for suspension and debarment.
The County is not retaining documentation in the decision to utilize Price Agreements.
Questioned Costs – Questioned and likely costs of $24,308
Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate
quotations for items over the micro-purchase threshold and may use a vendor that has been
suspended or debarred.
Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to
comply with all relevant federal procurement requirements and reviewed for necessary revisions
regularly. In addition the County needs to include a section on entering into covered transactions
and train staff in the purchasing department of the requirement to check for any suspension or
debarment and the need to retain supporting documentation.
Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has
been trained on entering into covered transactions and the requirement to check for any
suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for
items over the micro-purchase threshold. This will be a documented process in the new policy and
procedures manual for federal guidelines.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
-
Cash Management Controls (2023-011 – Cash Management Controls (Material Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County relies on the pass-through entity to approve requests for reimbursements.
Criteria - Per 2 CFR 200.303(a), 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).
Cause - The County does not have policies and procedures in place to ensure request for
reimbursements are being prepared then reviewed and approved by another employee prior to
submitting to the pass-through entity.
Effect - The County could inaccurately report unallowable expenses for reimbursement that would
not be detected by controls that are not operating.
Auditor’s Recommendation - The auditor recommends the County develop and implement
adequate policies and procedures to ensure another individual is reviewing and approving
reimbursement requests prior to submitting to the pass-through entity and provide training to
those personnel that will be charged with the task.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines. A separation of duties has
been implemented verbally with our staff. Andrea Montoya and our new Finance Director will be
reviewing and approving these reimbursements moving forward. The verbal corrective action is in
effect immediately.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date – No later than August 31, 2024.
2023-012 Equipment and Real Property Management (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - The County was not able to provide a complete and accurate equipment listing tracking
items purchased with federal funding nor did the County conduct a physical inventory.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the
property, a serial number or other identification number, the source of funding for the property
(including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of
Federal participation in the project costs for the Federal award under which the property was
acquired, the location, use and condition of the property, and any ultimate disposition data
including the date of disposal and sale price of the property.
Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results
reconciled with the property records at least once every 2 years.
Cause - The County is not following policy and procedures to ensure that equipment purchased with
federal funds is maintained and tracked and the County performing a physical inventory at a
minimum of every two years.
Effect - The County could dispose of or lose federally funded equipment without following federal
guidelines.
Auditor’s Recommendation - The auditor recommends the County enhance the design of its control
activities and policies and procedures should be developed to ensure physical inventories are taken
at least once every two years and that they create a tool to assist in tracking and maintaining
equipment purchased with federal funds.
Views of Responsible Officials and Planned Corrective Action - The County will enhance the control
activities and procedures to ensure physical inventories are taken at least every two years and will
track and maintain equipment purchased with federal funds.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance
Director
Timeline and Estimated Completion Date –This will be a documented procedure by August 31, 2024.
The County will have a physical inventory completed by December 31, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material
Weakness in Internal Controls over Compliance)
Federal Program Information
Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509
Federal Awarding Agency: U.S. Department of the Transportation
Pass-Through Entity: New Mexico Department of Transportation
Federal Award ID Number: N/A
Federal Award Year: 2023
Condition - During reconciliation of the general ledger to SEFA, it was noted administrative
percentages of payroll were included on reimbursement requests monthly that did not include
supporting documentation on what the percentages were based on or support by the employee
documenting the time spent on the grant. No documentation is maintained to support the process
by which these estimates were produced, or the relationship to the activities actually performed.
No analysis of actual activities versus budgeted activities is performed. There are no controls in
place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the
amounts charged.
Criteria - Per 2 CFR 200.303(a), 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).
Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise
authorized by statute, costs must meet the following general criteria in order to be allowable under
Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal
award and be allocable thereto under these principles; paragraph (g) Be adequately documented.
Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed: (i) Be
supported by a system of internal control which provides reasonable assurance that the charges are
accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary
or wages among specific activities or cost objectives if the employee works on more than one
Federal award; a Federal award and non-Federal award; (viii) Budget estimates (i.e., estimates
determined before the services are performed) alone do not qualify as support for charges to
Federal awards, but may be used for interim accounting purposes, provided that: A) The system for
establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's
written policies) are identified and entered into the records in a timely manner. Short term (such as
one or two months) fluctuation between workload categories need not be considered as long as the
distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal
entity's system of internal controls includes processes to review after-the-fact interim charges
made to a Federal award based on budget estimates. All necessary adjustment must be made such
that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Cause - The County does not have policies and procedures in place to ensure the allowability of the
percent allocations or retain detailed approved supporting documentation.
Questioned Costs – Questioned and likely costs of $77,520
Effect - The County could spend federal award funding on time not spent on the grant which could
lead to disallowed costs.
Auditor’s Recommendation - The auditor recommends the County strengthen policies and
procedures to ensure the charging of administrative costs for allowability is based off supported
calculations or documented time spent to grant.
Views of Responsible Officials and Planned Corrective Action - The County will create a documented
process in the new policy and procedures manual for federal guidelines and charging of
administrative costs for documented time spent on grants with supporting calculations will be
documented for clarity and consistency.
Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director
Timeline and Estimated Completion Date - No later than August 31, 2024.