Audit 334391

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-002 The County did not have adequate controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: 2035-056 LA-10360-7F and 8F / LA-10355 TAP-D350(001) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $175,301 in Highway Planning and Construction program funds. The program’s objective is to provide funds for the planning, design, construction and rehabilitation of highways and bridge transportation systems. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to establish and follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal, state or local procurement thresholds and methods when using federal funds to procure goods and services. Governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Our audit found the County’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the County did not establish its own written procurement procedures and did not maintain records sufficient to detail the procurement of a professional services contract that it charged to the program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Management and staff were unaware the County was required to have its own written procurement procedures and maintain records detailing its procurement actions. Effect of Condition The County did not establish its own written procurement procedures required by federal procurement requirements. Without written policies and procedures, the County is at greater risk of noncompliance with the most restrictive of federal, state or local procurement methods and requirements when using federal funds to procure contractors. Additionally, the County procured a professional services contract with costs of $151,761 that it charged to the program during the period. County staff were able to describe the competitive proposals process that they used. However, the County did not retain the proposals it received or documentation of the evaluation and scoring of proposals to support that it awarded the contract to the contractor with the most advantageous proposal. Without maintaining sufficient records to detail the history of procurement, the County cannot demonstrate compliance with federal procurement requirements. Recommendation We recommend the County establish written procurement procedures that conform to federal procurement requirements. We also recommend the County strengthen internal controls to ensure it maintains documentation to demonstrate compliance with federal procurement requirements. County’s Response The Process Checklist has been completed and is in the Prosecuting Attorney’s office for review. We have written into the Process Checklist to maintain the documentation required when obtaining Professional Bids. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes all procurement transactions are to be conducted in a manner providing full and open competition. Title 2 CFR 200, Uniform Guidance, section 320, Methods of procurement to be followed, describes each allowable procurement method.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-002 The County did not have adequate controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: 2035-056 LA-10360-7F and 8F / LA-10355 TAP-D350(001) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $175,301 in Highway Planning and Construction program funds. The program’s objective is to provide funds for the planning, design, construction and rehabilitation of highways and bridge transportation systems. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to establish and follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal, state or local procurement thresholds and methods when using federal funds to procure goods and services. Governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Our audit found the County’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the County did not establish its own written procurement procedures and did not maintain records sufficient to detail the procurement of a professional services contract that it charged to the program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Management and staff were unaware the County was required to have its own written procurement procedures and maintain records detailing its procurement actions. Effect of Condition The County did not establish its own written procurement procedures required by federal procurement requirements. Without written policies and procedures, the County is at greater risk of noncompliance with the most restrictive of federal, state or local procurement methods and requirements when using federal funds to procure contractors. Additionally, the County procured a professional services contract with costs of $151,761 that it charged to the program during the period. County staff were able to describe the competitive proposals process that they used. However, the County did not retain the proposals it received or documentation of the evaluation and scoring of proposals to support that it awarded the contract to the contractor with the most advantageous proposal. Without maintaining sufficient records to detail the history of procurement, the County cannot demonstrate compliance with federal procurement requirements. Recommendation We recommend the County establish written procurement procedures that conform to federal procurement requirements. We also recommend the County strengthen internal controls to ensure it maintains documentation to demonstrate compliance with federal procurement requirements. County’s Response The Process Checklist has been completed and is in the Prosecuting Attorney’s office for review. We have written into the Process Checklist to maintain the documentation required when obtaining Professional Bids. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes all procurement transactions are to be conducted in a manner providing full and open competition. Title 2 CFR 200, Uniform Guidance, section 320, Methods of procurement to be followed, describes each allowable procurement method.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate controls for ensuring compliance with federal requirements for allowable activities and costs. Assistance Listing Number and Title: 21.032, COVID-19- Local Assistance and Tribal Consistency Fund Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $50,000 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $50,000 in federal funding from the Local Assistance and Tribal Consistency Fund (LATCF). This program provided funding to eligible revenue sharing counties and eligible tribal governments across fiscal years 2022 and 2023 for revenue enhancement. Recipients may use the funding for any governmental purpose other than a lobbying activity. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of program controls. The County’s internal controls were inadequate for ensuring it charged only allowable costs to the program. Specifically, the County charged sheriff’s office payroll costs to the LATCF program that it had already charged to another federal program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The County intended to charge some months of sheriff’s office payroll costs to the LATCF program and other months to another federal program. However, the County’s review did not detect that it charged payroll costs for the same period to both programs. Effect of Condition and Questioned Costs The County charged $50,000 of costs to the program that were unallowable because it had already charged them to another federal program. Therefore, we are questioning these costs. Recommendation We recommend the County establish and follow internal controls to ensure it charges only allowable costs to federal programs. County’s Response A request was made to the payroll department for a report for the Sheriff’s office for the August payroll. I meant the July time issued on August 5th. The report I received was for August time with a September 5th pay date. This was a misunderstanding and not an intentional oversight. In the future, we will ensure that the report dates match the payroll we are requesting. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-002 The County did not have adequate controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: 2035-056 LA-10360-7F and 8F / LA-10355 TAP-D350(001) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $175,301 in Highway Planning and Construction program funds. The program’s objective is to provide funds for the planning, design, construction and rehabilitation of highways and bridge transportation systems. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to establish and follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal, state or local procurement thresholds and methods when using federal funds to procure goods and services. Governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Our audit found the County’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the County did not establish its own written procurement procedures and did not maintain records sufficient to detail the procurement of a professional services contract that it charged to the program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Management and staff were unaware the County was required to have its own written procurement procedures and maintain records detailing its procurement actions. Effect of Condition The County did not establish its own written procurement procedures required by federal procurement requirements. Without written policies and procedures, the County is at greater risk of noncompliance with the most restrictive of federal, state or local procurement methods and requirements when using federal funds to procure contractors. Additionally, the County procured a professional services contract with costs of $151,761 that it charged to the program during the period. County staff were able to describe the competitive proposals process that they used. However, the County did not retain the proposals it received or documentation of the evaluation and scoring of proposals to support that it awarded the contract to the contractor with the most advantageous proposal. Without maintaining sufficient records to detail the history of procurement, the County cannot demonstrate compliance with federal procurement requirements. Recommendation We recommend the County establish written procurement procedures that conform to federal procurement requirements. We also recommend the County strengthen internal controls to ensure it maintains documentation to demonstrate compliance with federal procurement requirements. County’s Response The Process Checklist has been completed and is in the Prosecuting Attorney’s office for review. We have written into the Process Checklist to maintain the documentation required when obtaining Professional Bids. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes all procurement transactions are to be conducted in a manner providing full and open competition. Title 2 CFR 200, Uniform Guidance, section 320, Methods of procurement to be followed, describes each allowable procurement method.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-002 The County did not have adequate controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: 2035-056 LA-10360-7F and 8F / LA-10355 TAP-D350(001) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $175,301 in Highway Planning and Construction program funds. The program’s objective is to provide funds for the planning, design, construction and rehabilitation of highways and bridge transportation systems. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to establish and follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal, state or local procurement thresholds and methods when using federal funds to procure goods and services. Governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Our audit found the County’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the County did not establish its own written procurement procedures and did not maintain records sufficient to detail the procurement of a professional services contract that it charged to the program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Management and staff were unaware the County was required to have its own written procurement procedures and maintain records detailing its procurement actions. Effect of Condition The County did not establish its own written procurement procedures required by federal procurement requirements. Without written policies and procedures, the County is at greater risk of noncompliance with the most restrictive of federal, state or local procurement methods and requirements when using federal funds to procure contractors. Additionally, the County procured a professional services contract with costs of $151,761 that it charged to the program during the period. County staff were able to describe the competitive proposals process that they used. However, the County did not retain the proposals it received or documentation of the evaluation and scoring of proposals to support that it awarded the contract to the contractor with the most advantageous proposal. Without maintaining sufficient records to detail the history of procurement, the County cannot demonstrate compliance with federal procurement requirements. Recommendation We recommend the County establish written procurement procedures that conform to federal procurement requirements. We also recommend the County strengthen internal controls to ensure it maintains documentation to demonstrate compliance with federal procurement requirements. County’s Response The Process Checklist has been completed and is in the Prosecuting Attorney’s office for review. We have written into the Process Checklist to maintain the documentation required when obtaining Professional Bids. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes all procurement transactions are to be conducted in a manner providing full and open competition. Title 2 CFR 200, Uniform Guidance, section 320, Methods of procurement to be followed, describes each allowable procurement method.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-001 The County did not have adequate controls for ensuring compliance with federal requirements for allowable activities and costs. Assistance Listing Number and Title: 21.032, COVID-19- Local Assistance and Tribal Consistency Fund Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $50,000 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $50,000 in federal funding from the Local Assistance and Tribal Consistency Fund (LATCF). This program provided funding to eligible revenue sharing counties and eligible tribal governments across fiscal years 2022 and 2023 for revenue enhancement. Recipients may use the funding for any governmental purpose other than a lobbying activity. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of program controls. The County’s internal controls were inadequate for ensuring it charged only allowable costs to the program. Specifically, the County charged sheriff’s office payroll costs to the LATCF program that it had already charged to another federal program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The County intended to charge some months of sheriff’s office payroll costs to the LATCF program and other months to another federal program. However, the County’s review did not detect that it charged payroll costs for the same period to both programs. Effect of Condition and Questioned Costs The County charged $50,000 of costs to the program that were unallowable because it had already charged them to another federal program. Therefore, we are questioning these costs. Recommendation We recommend the County establish and follow internal controls to ensure it charges only allowable costs to federal programs. County’s Response A request was made to the payroll department for a report for the Sheriff’s office for the August payroll. I meant the July time issued on August 5th. The report I received was for August time with a September 5th pay date. This was a misunderstanding and not an intentional oversight. In the future, we will ensure that the report dates match the payroll we are requesting. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.