PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma
Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; 4530-DR-OK; SA-2242
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and
Period of Performance
QUESTIONED COSTS: $-0-
Condition: Through the process of gaining an understanding of the County’s internal control structure for
federal programs, it was noted that county-wide internal controls regarding Control Environment, Risk
Assessment, Information and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the
County is in compliance with grant requirements.
Effect of Condition: Without an adequate system of county-wide controls, there is greater risk of a
breakdown in control activities which could result in unrecorded transactions, undetected errors,
misappropriation of funds, and noncompliance with grant requirements.
Recommendation: OSAI recommends that the County implement a system of internal controls to ensure
compliance with grant requirements.
Management Response:
District 1 County Commissioner: Ottawa County has implemented a system of internal controls to ensure
compliance with the grant requirements.
District 2 County Commissioner: I was not in office at this time; however, I will work to implement a
system of internal controls to ensure compliance with grant requirements.
District 3 County Commissioner: I did not take office until January 2023; however, District 3 will work
to better understand all grant requirements to ensure compliance.
County Clerk: The County Clerk’s office is continuously learning policies and procedures needed to
ensure the County’s federal programs have adequate internal controls. The County Clerk’s office will work
on getting written internal control policies and procedures in place.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in
part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04
states in part:
Components, Principles, and Attributes
Control Environment - The foundation for an internal control system. It provides the
discipline and structure to help an entity achieve its objectives.
Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives.
This assessment provides the basis for developing appropriate risk responses.
Information and Communication - The quality information management and personnel
communicate and use to support the internal control system.
Monitoring - Activities management establishes and operates to assess the quality of
performance over time and promptly resolve the findings of audits and other reviews.
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma
Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; 4530-DR-OK; SA-2242
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and
Period of Performance
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal
disbursements, we noted that Ottawa County has not established procedures to ensure compliance with the
following compliance requirements: Activities Allowed or Unallowed; Allowable Costs/Costs Principles
and Period of Performance.
Submissions for reimbursement from the Coronavirus Relief Fund were not reviewed by the BOCC for
Activities Allowed/Allowed Costs, or to ensure the expenses were incurred during the allowable period of
performance.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal grant compliance requirements.
Effect of Condition: This condition could result in noncompliance with grant requirements and could lead
to the loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program
and implement internal control procedures to ensure compliance with all requirements.
Management Response:
District 1 County Commissioner: Ottawa County has implemented internal control procedures to ensure
compliance with all requirements.
District 2 County Commissioner: I was not in office at this time; however, I will work to gain an
understanding of grant requirements and implement internal controls to ensure compliance with those
requirements.
District 3 County Commissioner: I did not take office until January 2023; however, District 3 will work
to better understand all requirements of federal programs and implement better procedures to follow all
guidelines to ensure compliance.
County Clerk: The County Clerk’s office is continuously learning policies and procedures needed to
ensure the County’s federal programs have adequate internal controls. The County Clerk’s office will work
on getting written internal control policies and procedures in place.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
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).
2 CFR § 213 states, “Non-federal entities are subject to the non-procurement debarment and
suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180.
These regulations restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal
assistance programs or activities.”
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23
states in part:
Objectives of an Entity – Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As
part of specifying compliance objectives, the entity determines which laws and regulations
apply to the entity. Management is expected to set objectives that incorporate these
requirements.
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma
Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; 4530-DR-OK; SA-2242
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed and Allowable Costs/Costs Principles
QUESTIONED COSTS: $477,097
Condition: Upon inquiry, review, and testwork of 100% of major program expenditures, the following
exceptions were noted:
• The County was reimbursed $477,097 for payroll expenditures which were determined to be
unallowable costs to mitigate or prevent the spread of COVID-19 as required by the grant
agreement.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure that the
compliance with applicable grant requirements.
Effect of Condition: These conditions resulted in noncompliance with federal grant requirements. This
could hinder the County from receiving future federal funding and could result in the repayment of grant
funds to the grantor agency.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program
and design and implement policies and procedures to ensure compliance with all applicable grant
requirements.
Management Response:
District 1 County Commissioner: Ottawa County has designed and implemented policies and procedures
to ensure compliance with all applicable grant requirements.
District 2 County Commissioner: I was not in office at this time. This was a one-time grant.
District 3 County Commissioner: I did not take office until January 2023; however, District 3 will work
to better understand all requirements of federal programs and implement better procedures to follow all
guidelines and ensure compliance.
Criteria: 2 CFR § 200.403 - Factors affecting allowability costs states in relevant part,
Except where otherwise authorized by statute, costs must meet the following general
criteria in order to be allowable under Federal awards:
(g) Be adequately documented.
42 United States Code § 801 – Coronavirus relief fund Section 801(d) requires the States, Tribal
governments, or units of local government use the funds received to cover only those costs
that (1) are necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the
budget most recently approved as of March 27, 2020, for the State or government; and (3)
were incurred during the period that begins on March 1, 2020, and ends on December 30,
2020.
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma
Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; 4530-DR-OK; SA-2242
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and
Period of Performance
QUESTIONED COSTS: $-0-
Condition: Through the process of gaining an understanding of the County’s internal control structure for
federal programs, it was noted that county-wide internal controls regarding Control Environment, Risk
Assessment, Information and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the
County is in compliance with grant requirements.
Effect of Condition: Without an adequate system of county-wide controls, there is greater risk of a
breakdown in control activities which could result in unrecorded transactions, undetected errors,
misappropriation of funds, and noncompliance with grant requirements.
Recommendation: OSAI recommends that the County implement a system of internal controls to ensure
compliance with grant requirements.
Management Response:
District 1 County Commissioner: Ottawa County has implemented a system of internal controls to ensure
compliance with the grant requirements.
District 2 County Commissioner: I was not in office at this time; however, I will work to implement a
system of internal controls to ensure compliance with grant requirements.
District 3 County Commissioner: I did not take office until January 2023; however, District 3 will work
to better understand all grant requirements to ensure compliance.
County Clerk: The County Clerk’s office is continuously learning policies and procedures needed to
ensure the County’s federal programs have adequate internal controls. The County Clerk’s office will work
on getting written internal control policies and procedures in place.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in
part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04
states in part:
Components, Principles, and Attributes
Control Environment - The foundation for an internal control system. It provides the
discipline and structure to help an entity achieve its objectives.
Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives.
This assessment provides the basis for developing appropriate risk responses.
Information and Communication - The quality information management and personnel
communicate and use to support the internal control system.
Monitoring - Activities management establishes and operates to assess the quality of
performance over time and promptly resolve the findings of audits and other reviews.
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma
Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; 4530-DR-OK; SA-2242
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and
Period of Performance
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal
disbursements, we noted that Ottawa County has not established procedures to ensure compliance with the
following compliance requirements: Activities Allowed or Unallowed; Allowable Costs/Costs Principles
and Period of Performance.
Submissions for reimbursement from the Coronavirus Relief Fund were not reviewed by the BOCC for
Activities Allowed/Allowed Costs, or to ensure the expenses were incurred during the allowable period of
performance.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal grant compliance requirements.
Effect of Condition: This condition could result in noncompliance with grant requirements and could lead
to the loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program
and implement internal control procedures to ensure compliance with all requirements.
Management Response:
District 1 County Commissioner: Ottawa County has implemented internal control procedures to ensure
compliance with all requirements.
District 2 County Commissioner: I was not in office at this time; however, I will work to gain an
understanding of grant requirements and implement internal controls to ensure compliance with those
requirements.
District 3 County Commissioner: I did not take office until January 2023; however, District 3 will work
to better understand all requirements of federal programs and implement better procedures to follow all
guidelines to ensure compliance.
County Clerk: The County Clerk’s office is continuously learning policies and procedures needed to
ensure the County’s federal programs have adequate internal controls. The County Clerk’s office will work
on getting written internal control policies and procedures in place.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
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).
2 CFR § 213 states, “Non-federal entities are subject to the non-procurement debarment and
suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180.
These regulations restrict awards, subawards, and contracts with certain parties that are
debarred, suspended, or otherwise excluded from or ineligible for participation in Federal
assistance programs or activities.”
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23
states in part:
Objectives of an Entity – Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As
part of specifying compliance objectives, the entity determines which laws and regulations
apply to the entity. Management is expected to set objectives that incorporate these
requirements.
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma
Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: Oklahoma CARES PPE; 4530-DR-OK; SA-2242
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed and Allowable Costs/Costs Principles
QUESTIONED COSTS: $477,097
Condition: Upon inquiry, review, and testwork of 100% of major program expenditures, the following
exceptions were noted:
• The County was reimbursed $477,097 for payroll expenditures which were determined to be
unallowable costs to mitigate or prevent the spread of COVID-19 as required by the grant
agreement.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure that the
compliance with applicable grant requirements.
Effect of Condition: These conditions resulted in noncompliance with federal grant requirements. This
could hinder the County from receiving future federal funding and could result in the repayment of grant
funds to the grantor agency.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program
and design and implement policies and procedures to ensure compliance with all applicable grant
requirements.
Management Response:
District 1 County Commissioner: Ottawa County has designed and implemented policies and procedures
to ensure compliance with all applicable grant requirements.
District 2 County Commissioner: I was not in office at this time. This was a one-time grant.
District 3 County Commissioner: I did not take office until January 2023; however, District 3 will work
to better understand all requirements of federal programs and implement better procedures to follow all
guidelines and ensure compliance.
Criteria: 2 CFR § 200.403 - Factors affecting allowability costs states in relevant part,
Except where otherwise authorized by statute, costs must meet the following general
criteria in order to be allowable under Federal awards:
(g) Be adequately documented.
42 United States Code § 801 – Coronavirus relief fund Section 801(d) requires the States, Tribal
governments, or units of local government use the funds received to cover only those costs
that (1) are necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the
budget most recently approved as of March 27, 2020, for the State or government; and (3)
were incurred during the period that begins on March 1, 2020, and ends on December 30,
2020.