Audit 334578

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0316 Compliance Requirement: Reporting Award Period: March 3, 2021 – December 31, 2024, liquidated by December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: According to the Uniform Guidance (2 CFR Part 200), expenditures should be reported in the period in which they are incurred. Accurate reporting is essential for compliance with federal requirements and for the proper matching of expenditures with the corresponding fiscal year. Per the SLFRF Compliance and Reporting Guidance, SLFRF funds recipients are required to submit quarterly Project and Expenditure Report. These reports include current period expenditures as well as cumulative expenditures. Condition: During our audit of the Schedule of Expenditures of Federal Awards (SEFA), we identified that expenditures were reported in the incorrect period. Specifically, expenditures incurred in the prior fiscal year were included in the current year's SEFA. Additionally, SLFRF reports submitted did not report the correct amount of cumulative expenditures. Questioned Costs: None. Context: Two of two compliance reports selected for testing did not properly report the cumulative expenditures, $797,843.36 of expenditures were omitted. These expenditures were improperly included on the initial 2024 SEFA prepared by the County. Cause: The misreporting occurred due to a lack of adequate training on the reporting requirements for this grant program across departments within the County. County personnel did not have a consistent understanding of the program requirements to ensure all allowable expenditures were properly reported on the SEFA and included in the applicable SLFRF reports. Effect: Reporting expenditures in the wrong period or omitting expenditures may lead to inaccurate financial and compliance reporting and non-compliance with federal regulations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the organization implement stronger internal controls over the SEFA preparation process and consistent training among County staff. This should include: -A thorough review and reconciliation of expenditures to ensure they are reported in the correct period. -A thorough review and reconciliation of SLFRF reports to ensure they are complete and accurate before submission. -Training for staff involved in the SEFA preparation to ensure they understand the requirements for accurate reporting. -Periodic internal audits to verify compliance with federal reporting requirements. Views of responsible officials: Management agrees with the finding.

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0316 Compliance Requirement: Reporting Award Period: March 3, 2021 – December 31, 2024, liquidated by December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: According to the Uniform Guidance (2 CFR Part 200), expenditures should be reported in the period in which they are incurred. Accurate reporting is essential for compliance with federal requirements and for the proper matching of expenditures with the corresponding fiscal year. Per the SLFRF Compliance and Reporting Guidance, SLFRF funds recipients are required to submit quarterly Project and Expenditure Report. These reports include current period expenditures as well as cumulative expenditures. Condition: During our audit of the Schedule of Expenditures of Federal Awards (SEFA), we identified that expenditures were reported in the incorrect period. Specifically, expenditures incurred in the prior fiscal year were included in the current year's SEFA. Additionally, SLFRF reports submitted did not report the correct amount of cumulative expenditures. Questioned Costs: None. Context: Two of two compliance reports selected for testing did not properly report the cumulative expenditures, $797,843.36 of expenditures were omitted. These expenditures were improperly included on the initial 2024 SEFA prepared by the County. Cause: The misreporting occurred due to a lack of adequate training on the reporting requirements for this grant program across departments within the County. County personnel did not have a consistent understanding of the program requirements to ensure all allowable expenditures were properly reported on the SEFA and included in the applicable SLFRF reports. Effect: Reporting expenditures in the wrong period or omitting expenditures may lead to inaccurate financial and compliance reporting and non-compliance with federal regulations. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the organization implement stronger internal controls over the SEFA preparation process and consistent training among County staff. This should include: -A thorough review and reconciliation of expenditures to ensure they are reported in the correct period. -A thorough review and reconciliation of SLFRF reports to ensure they are complete and accurate before submission. -Training for staff involved in the SEFA preparation to ensure they understand the requirements for accurate reporting. -Periodic internal audits to verify compliance with federal reporting requirements. Views of responsible officials: Management agrees with the finding.