Audit 348263

FY End
2024-06-30
Total Expended
$10.41M
Findings
2
Programs
11
Year: 2024 Accepted: 2025-03-25

Organization Exclusion Status:

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Contacts

Name Title Type
H3FVKV1KDVW5 Sussan Durham Auditee
3027443282 Jonathan Griffin Auditor
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Notes to SEFA

Title: LOANS OUTSTANDING Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes Federal grant activity of Kent County, Delaware (the County) and is presented on the modified accrual basis of accounting. Matching funds are excluded from the schedule and the Program Income generated from Federal Grants is classified as Federal Expenditures when spent. The information on this schedule is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The County did not elect to use the 10% De Minimis cost rate for indirect costs. During fiscal year 2020, the County was awarded $1,023,000 in loan proceeds from the Delaware Department of Natural Resources and Environmental Control, Delaware Water Pollution Control Revolving Fund, for the Air Blower Optimization project under the Capitalization Grants for Clean Water State Revolving Funds Program (ALN #66.458). This loan is not fully drawn down, and expenditures related to it in the amount of $45,348 are reflected in the schedule of expenditures of federal awards. The loan balance at June 30, 2024 was $786,206 ($655,145 or 83.33 percent federal funds and $131,061 or 16.67 percent state funds). During fiscal year 2021, the County was awarded $1,640,000 in loan proceeds from the Delaware Department of Natural Resources and Environmental Control, Delaware Water Pollution Control Revolving Fund, for the Plant-Wide Power Backup project under the Capitalization Grants for Clean Water State Revolving Funds Program (ALN #66.458). This loan is not fully drawn down, and expenditures related to it in the amount of $47,871 are reflected in the schedule of expenditures of federal awards. The loan balance at June 30, 2024 was $1,272,866 ($1,060,679 or 83.33 percent federal funds and $212,187 or 16.67 percent state funds). During fiscal year 2023, the County was awarded $17,000,000 in loan proceeds from the Delaware Department of Natural Resources and Environmental Control, Delaware Water Pollution Control Revolving Fund, for the Biosolids Capacity Expansion project under the Capitalization Grants for Clean Water State Revolving Funds Program (ALN #66.458). This loan is not fully drawn down, and expenditures related to it in the amount of $811,143 are reflected in the schedule of expenditures of federal awards. The loan balance at June 30, 2024 was $1,789,359 ($1,491,073 or 83.33 percent federal funds and $298,286 or 16.67 percent state funds). During fiscal year 2024, the County was awarded $722,856 in loan proceeds from the Delaware Department of Natural Resources and Environmental Control, Delaware Water Pollution Control Revolving Fund, for the Whispering Pines Septic Elimination project under the Capitalization Grants for Clean Water State Revolving Funds Program (ALN #66.458). This loan is not fully drawn down, and expenditures related to it in the amount of $586,134 are reflected in the schedule of expenditures of federal awards. The loan balance at June 30, 2024 was $703,389 ($586,134 or 83.33 percent federal funds and $117,255 or 16.67 percent state funds).
Title: INDIRECT COSTS Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes Federal grant activity of Kent County, Delaware (the County) and is presented on the modified accrual basis of accounting. Matching funds are excluded from the schedule and the Program Income generated from Federal Grants is classified as Federal Expenditures when spent. The information on this schedule is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The County did not elect to use the 10% De Minimis cost rate for indirect costs. The County did not elect to use the 10% De Minimis cost rate for indirect costs. For the year ended June 30, 2024, there were no indirect costs included in the schedule of expenditures of federal awards.
Title: NONCASH AWARDS Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards includes Federal grant activity of Kent County, Delaware (the County) and is presented on the modified accrual basis of accounting. Matching funds are excluded from the schedule and the Program Income generated from Federal Grants is classified as Federal Expenditures when spent. The information on this schedule is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The County did not elect to use the 10% De Minimis cost rate for indirect costs. The amount of equipment and supplies reported on the schedule is the value of the item based on the agencies acquisition price.

Finding Details

Reference Number: 2024-002 Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds (American Rescue Plan Act) Assistance Listing Number: 21.027 Federal Award Identification Number Not Available Federal Award Year 2024 Pass-Through Agency: N/A Pass-Through Number: N/A Compliance Requirement: Suspension and Debarment Award Period: 7/1/2023 - 6/30/2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts 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. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a 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 comply 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). Condition: The County could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for three out of seven vendors was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The County relied on State policies and procedures for suspension and debarment for State piggyback contracts, rather than applying their own established controls to these contracts. Effect: The County is not in compliance with federal suspension and debarment regulations. Repeat Finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: The County should ensure that established policies and procedures related to suspension and debarment are applied to all contracts, even for piggyback agreements adopted from the state. Views of Responsible Officials and Planned Corrective Action: The County regularly checks Sam.gov for suspension and debarment transactions. We relied on state policies and procedures regarding the contracts in question as they were piggyback contracts. Moving forward, we will ensure thorough documentation of our reviews to maintain diligence in this area.
Reference Number: 2024-002 Federal Agency: U.S. Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds (American Rescue Plan Act) Assistance Listing Number: 21.027 Federal Award Identification Number Not Available Federal Award Year 2024 Pass-Through Agency: N/A Pass-Through Number: N/A Compliance Requirement: Suspension and Debarment Award Period: 7/1/2023 - 6/30/2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR 200.213 Suspension and Debarment restricts 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. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person (7) Distribution of work to individuals and firms or economic considerations. Control: Per 2 CFR Section 200.303(a), a 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 comply 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). Condition: The County could not provide supporting documentation that suspension and debarment status was determined prior to award. Context: The suspension and debarment status for three out of seven vendors was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The County relied on State policies and procedures for suspension and debarment for State piggyback contracts, rather than applying their own established controls to these contracts. Effect: The County is not in compliance with federal suspension and debarment regulations. Repeat Finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: The County should ensure that established policies and procedures related to suspension and debarment are applied to all contracts, even for piggyback agreements adopted from the state. Views of Responsible Officials and Planned Corrective Action: The County regularly checks Sam.gov for suspension and debarment transactions. We relied on state policies and procedures regarding the contracts in question as they were piggyback contracts. Moving forward, we will ensure thorough documentation of our reviews to maintain diligence in this area.