FAC Explorer

Audit 339684

FY End
2022-06-30
Total Expended
$3.51M
Findings
2
Programs
3
Organization: Colfax County (NM)
Year: 2022 Accepted: 2025-01-24
Auditor: Pattillo Brown & Hill LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
520103 2022-008 Material Weakness - A
1096545 2022-008 Material Weakness - A

Programs

ALN Program Spent Major Findings
20.933 National Infrastructure Investments $3.13M Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $344,921 Yes 1
20.106 Airport Improvement Program, Covid-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs $43,943 - 0

Contacts

Name Title Type
Y5WKZ534GE41 Monte Gore Auditee
5754459661 Chris Garner Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the County under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Uniform Guidance, Audits of States, Local Governments, and Non‐Profit Organizations. Because the Schedule presents only a portion of the operations of the County, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the County. Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The County has elected not to use the 10% de Minimus Indirect Cost Rate. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the County under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Uniform Guidance, Audits of States, Local Governments, and Non‐Profit Organizations. Because the Schedule presents only a portion of the operations of the County, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the County. Expenditures reported on the Schedule are reported on the accrual basis of accounting.
Title: Subrecipients of Grant Awards Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the County under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Uniform Guidance, Audits of States, Local Governments, and Non‐Profit Organizations. Because the Schedule presents only a portion of the operations of the County, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the County. Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The County has elected not to use the 10% de Minimus Indirect Cost Rate. There were no sub-recipients during fiscal year 2022.
Title: Loans Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the County under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Uniform Guidance, Audits of States, Local Governments, and Non‐Profit Organizations. Because the Schedule presents only a portion of the operations of the County, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the County. Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The County has elected not to use the 10% de Minimus Indirect Cost Rate. The County did not expend any federal awards in the form of loans during the year ended June 30, 2022.
Title: Indirect Cost Rate Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the County under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Uniform Guidance, Audits of States, Local Governments, and Non‐Profit Organizations. Because the Schedule presents only a portion of the operations of the County, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the County. Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The County has elected not to use the 10% de Minimus Indirect Cost Rate. The County has elected not to use the 10% de Minimis Indirect Cost Rate.

Finding Details

Finding 2022-008
CONDITION: During the payroll testing of 40 premium pay transactions, for all 40 transactions there was no evidence that the County determined that premium pay did not exceed the 150% limitation described in the criteria below. In addition, the County did not identify eligible and non‐eligible employees. CRITERIA: Per 31 CFR Part 35 [RIN I505‐AC77], Coronavirus State and Local Fiscal Recovery Funds (SLRFR), Final Rule and 2 CFR §200.318 (C) elected official are prohibited from using funds to pay themselves premium pay. The Final Rule states SLFRF Funds can be paid for premium pay but those payments can’t increase an employee’s total pay above 150% of their residing state or county’s average annual wage. EFFECT: Premium payments could have been paid in excess of the 150% limitation per the SLFRF Final Ruling. Elected officials, who were deemed ineligible per the SLFRF Final Rule, were paid premium pay. CAUSE: The County did not establish or apply appropriate internal controls over premium pay payments made to ensure compliance with SLFRF Final Ruling. RECOMMENDATION: We recommend that the County establish appropriate controls over federal monies in the future to ensure compliance with federal grant expenditures prior to the disbursement. MANAGEMENT’S RESPONSE: County Commission gave former County Manager direction to consult with legal counsel to determine premium pay for County staff who worked throughout the Pandemic. A meeting was held between Former County Manager, Financial Specialist, County Sheriff and VMDC Warden to discuss premium pay for all staff as well as public safety recruitment and retention. Former County Manager stated after consulting with County Legal Counsel and NMC General Counsel, all County staff including, Elected Officials were eligible to receive “premium pay” in compliance with the American Rescue Plan Act Rule. Financial Specialist and County Sheriff questioned the eligibility for Elected Officials to receive premium pay referencing N.M. Const. Art IV, section 27 “No law shall be enacted giving any extra compensation to any public officer, servant, agent or contractor after services are rendered or contract made; nor shall the compensation of any officer be increased or diminished during his term of office, except as otherwise provided in this constitution.”, and NMSA 4‐44‐4.1 related to County Elected Official Salary caps. Former County Manager responded premium pay should be issued to all staff including Elected Officials through the accounts payable department instead of payroll to avoid violating New Mexico Constitution and State Statute and premium pay is not considered a salary increase but “premium pay” outside of regular salary paid to “essential workers”. Former County Manager went on to explain that all law enforcement officers were eligible for premium pay because they were described as “essential” within the American Rescue Plan Act Rule. In a regular Commissioner Meeting held on 10/12/2021 Former County Manager presented to Commission and recommended approval of public safety recruitment and retention plan as well as a one‐time payment to current staff of $5,000 who worked from January 2020 through October 2021 and a prorated rate be awarded to any employee that worked a portion of that time. She also stated new information was received that confirms all County employees are eligible for the premium pay, currently 88 employees. She also stated that public health contractors are also eligible for premium pay and recommended payment be made to 2.5 full time positions to contracted health care services provider. Commission approved the request from the Former County Manager based on her recommendation. Former County Manager drafted, reviewed and approved a list of employees scheduled to receive payment including 5 contracted medical service provider including the CEO of the company. Former County Manager directed accounts payable clerk to issue payment through accounts payable. On November 8th 2021, Former County Manager presented to and recommended approval additional premium pay be awarded to Employees that had retired and worked part of the period of January 2020 though October 2021 and two full time Employees that were laid off. In January 2022 Elected Officials requested a meeting be held to discuss the issuing of 1099 forms to employees who received premium pay. Also present in the meeting was Commission Chairman. Elected Officials raised concern that staff was issued a 1099 and questioned if this was correct. Former County Manager informed staff the advice the County got was to issue a 1099‐NEC, under the circumstances. However, upon review of email communication former County Manager received an opinion from her personal Tax Accountant stating that the payments should have been run through payroll and recommended Former County Manager either correct the original error and would require several steps including corrected 941’s and corrected w‐2’s or issue a 1099 NEC. Former County Manager directed accounts payable clerk to issue a 1099 NEC. Commission Chairman questioned several expenditures from American Rescue Plan Act Fund, including the additional 2 full time positions and CEO of the company not approved by Commission, it was later determined that several expenditures were not allowable under the American Rescue Plan Act Fund Rule. Colfax County Staff submitted written report to Office of the State Auditor as required under NMSA 1978, Section 12‐6‐6 (criminal violations) an agency or auditor shall notify the state auditor immediately, in writing upon discovery of any violations of criminal statute in connection with financial affairs. Former County Manager announced her resignation February 28, 2022. It was later discovered through communication with County legal Counsel and NMC General Counsel that Former County Manager mislead the County Commission, Elected Officials, and County Staff and did not consult with County Legal Counsel or NMC General Counsel as previously stated and as directed by the Commission before making recommendations for approval of American Rescue Plan Act Funds. RESPONSIBLE PARTY/TIMELINE TO CORRECT: Finance Director – June 30, 2023
Finding 2022-008
CONDITION: During the payroll testing of 40 premium pay transactions, for all 40 transactions there was no evidence that the County determined that premium pay did not exceed the 150% limitation described in the criteria below. In addition, the County did not identify eligible and non‐eligible employees. CRITERIA: Per 31 CFR Part 35 [RIN I505‐AC77], Coronavirus State and Local Fiscal Recovery Funds (SLRFR), Final Rule and 2 CFR §200.318 (C) elected official are prohibited from using funds to pay themselves premium pay. The Final Rule states SLFRF Funds can be paid for premium pay but those payments can’t increase an employee’s total pay above 150% of their residing state or county’s average annual wage. EFFECT: Premium payments could have been paid in excess of the 150% limitation per the SLFRF Final Ruling. Elected officials, who were deemed ineligible per the SLFRF Final Rule, were paid premium pay. CAUSE: The County did not establish or apply appropriate internal controls over premium pay payments made to ensure compliance with SLFRF Final Ruling. RECOMMENDATION: We recommend that the County establish appropriate controls over federal monies in the future to ensure compliance with federal grant expenditures prior to the disbursement. MANAGEMENT’S RESPONSE: County Commission gave former County Manager direction to consult with legal counsel to determine premium pay for County staff who worked throughout the Pandemic. A meeting was held between Former County Manager, Financial Specialist, County Sheriff and VMDC Warden to discuss premium pay for all staff as well as public safety recruitment and retention. Former County Manager stated after consulting with County Legal Counsel and NMC General Counsel, all County staff including, Elected Officials were eligible to receive “premium pay” in compliance with the American Rescue Plan Act Rule. Financial Specialist and County Sheriff questioned the eligibility for Elected Officials to receive premium pay referencing N.M. Const. Art IV, section 27 “No law shall be enacted giving any extra compensation to any public officer, servant, agent or contractor after services are rendered or contract made; nor shall the compensation of any officer be increased or diminished during his term of office, except as otherwise provided in this constitution.”, and NMSA 4‐44‐4.1 related to County Elected Official Salary caps. Former County Manager responded premium pay should be issued to all staff including Elected Officials through the accounts payable department instead of payroll to avoid violating New Mexico Constitution and State Statute and premium pay is not considered a salary increase but “premium pay” outside of regular salary paid to “essential workers”. Former County Manager went on to explain that all law enforcement officers were eligible for premium pay because they were described as “essential” within the American Rescue Plan Act Rule. In a regular Commissioner Meeting held on 10/12/2021 Former County Manager presented to Commission and recommended approval of public safety recruitment and retention plan as well as a one‐time payment to current staff of $5,000 who worked from January 2020 through October 2021 and a prorated rate be awarded to any employee that worked a portion of that time. She also stated new information was received that confirms all County employees are eligible for the premium pay, currently 88 employees. She also stated that public health contractors are also eligible for premium pay and recommended payment be made to 2.5 full time positions to contracted health care services provider. Commission approved the request from the Former County Manager based on her recommendation. Former County Manager drafted, reviewed and approved a list of employees scheduled to receive payment including 5 contracted medical service provider including the CEO of the company. Former County Manager directed accounts payable clerk to issue payment through accounts payable. On November 8th 2021, Former County Manager presented to and recommended approval additional premium pay be awarded to Employees that had retired and worked part of the period of January 2020 though October 2021 and two full time Employees that were laid off. In January 2022 Elected Officials requested a meeting be held to discuss the issuing of 1099 forms to employees who received premium pay. Also present in the meeting was Commission Chairman. Elected Officials raised concern that staff was issued a 1099 and questioned if this was correct. Former County Manager informed staff the advice the County got was to issue a 1099‐NEC, under the circumstances. However, upon review of email communication former County Manager received an opinion from her personal Tax Accountant stating that the payments should have been run through payroll and recommended Former County Manager either correct the original error and would require several steps including corrected 941’s and corrected w‐2’s or issue a 1099 NEC. Former County Manager directed accounts payable clerk to issue a 1099 NEC. Commission Chairman questioned several expenditures from American Rescue Plan Act Fund, including the additional 2 full time positions and CEO of the company not approved by Commission, it was later determined that several expenditures were not allowable under the American Rescue Plan Act Fund Rule. Colfax County Staff submitted written report to Office of the State Auditor as required under NMSA 1978, Section 12‐6‐6 (criminal violations) an agency or auditor shall notify the state auditor immediately, in writing upon discovery of any violations of criminal statute in connection with financial affairs. Former County Manager announced her resignation February 28, 2022. It was later discovered through communication with County legal Counsel and NMC General Counsel that Former County Manager mislead the County Commission, Elected Officials, and County Staff and did not consult with County Legal Counsel or NMC General Counsel as previously stated and as directed by the Commission before making recommendations for approval of American Rescue Plan Act Funds. RESPONSIBLE PARTY/TIMELINE TO CORRECT: Finance Director – June 30, 2023