2023-001 The County did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds program.
Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus
State and Local Fiscal Recovery
Funds
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: $0
Prior Year Audit Finding: N/A
Background
The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. In 2023, the County spent $1,417,951 in SLFRF program funds.
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.
Under the SLFRF program, direct recipients with a population less than 250,000 residents that are allocated less than $10 million in SLFRF funding must submit annual Project and Expenditure reports to the U.S. Department of the Treasury (Treasury). Treasury identified the following key line items in the report that contain critical information and must be accurate and complete:
1.Obligations and Expenditures
Current period obligation
Cumulative obligation
Current period expenditure
Cumulative expenditure
Description of Condition
The County did not have an effective process for ensuring it prepared an accurate and complete report based on supporting documentation and Treasury’s guidance for SLFRF. Specifically, the County did not report seven of the eight projects that it paid with program funds.
We consider these internal control deficiencies to be a material weakness that led to material noncompliance.
We did not report this issue as a finding in the prior audit.
Cause of Condition
Staff responsible for completing the reports did not have a comprehensive understanding of the reporting requirements and did not receive the appropriate training.
Effect of Condition
The Project and Expenditure Report the County submitted in 2023 did not include information for seven of eight projects totaling $1.4 million.
Treasury uses the reports for oversight purposes, and any inaccurate information limits its ability to ensure transparency of program spending and fulfill its legal obligations.
By not establishing adequate internal controls, the County cannot ensure that information reported to the federal awarding agency is complete and accurate.
Recommendation
We recommend the County:
Establish internal controls to prepare accurate and complete reports
Provide resources and training necessary for staff to improve report preparation so that it complies with federal reporting guidance and system requirements
Refer to Treasury’s Project and Expenditure Report User Guide for instructions on correcting the data
County’s Response
The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County did experience issues with the reporting portal for these funds. When we requested assistance, we received generic responses and little assistance from the Treasury. It wasn’t until November 2024 that we were finally able to gain the assistance we needed to gain full access to the Treasury portal as well as some guidance on the reports. On January 1, 2025, the Treasury provided guidance that is helpful to us in understanding the reporting requirements. Now that we have the access and guidance we need, all reports will be submitted accurately and on time.
Auditor’s Remarks
We appreciate the County's commitment to resolving the issues noted, and will follow up during the 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.
U.S. Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, Section B, page 17, provides the reporting requirements for the Project and Expenditure Report. Section V of the Treasury’s current Project and Expenditure User Guide provides guidance for editing and revising report data (see Section IV of the January 2023 Guide).
2023-001 The County did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds program.
Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus
State and Local Fiscal Recovery
Funds
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: $0
Prior Year Audit Finding: N/A
Background
The purpose of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) is to respond to the COVID-19 pandemic’s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer or broadband infrastructure. In 2023, the County spent $1,417,951 in SLFRF program funds.
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.
Under the SLFRF program, direct recipients with a population less than 250,000 residents that are allocated less than $10 million in SLFRF funding must submit annual Project and Expenditure reports to the U.S. Department of the Treasury (Treasury). Treasury identified the following key line items in the report that contain critical information and must be accurate and complete:
1.Obligations and Expenditures
Current period obligation
Cumulative obligation
Current period expenditure
Cumulative expenditure
Description of Condition
The County did not have an effective process for ensuring it prepared an accurate and complete report based on supporting documentation and Treasury’s guidance for SLFRF. Specifically, the County did not report seven of the eight projects that it paid with program funds.
We consider these internal control deficiencies to be a material weakness that led to material noncompliance.
We did not report this issue as a finding in the prior audit.
Cause of Condition
Staff responsible for completing the reports did not have a comprehensive understanding of the reporting requirements and did not receive the appropriate training.
Effect of Condition
The Project and Expenditure Report the County submitted in 2023 did not include information for seven of eight projects totaling $1.4 million.
Treasury uses the reports for oversight purposes, and any inaccurate information limits its ability to ensure transparency of program spending and fulfill its legal obligations.
By not establishing adequate internal controls, the County cannot ensure that information reported to the federal awarding agency is complete and accurate.
Recommendation
We recommend the County:
Establish internal controls to prepare accurate and complete reports
Provide resources and training necessary for staff to improve report preparation so that it complies with federal reporting guidance and system requirements
Refer to Treasury’s Project and Expenditure Report User Guide for instructions on correcting the data
County’s Response
The County respectfully concurs with the finding and understands the importance of compliance with federal program requirements. The County did experience issues with the reporting portal for these funds. When we requested assistance, we received generic responses and little assistance from the Treasury. It wasn’t until November 2024 that we were finally able to gain the assistance we needed to gain full access to the Treasury portal as well as some guidance on the reports. On January 1, 2025, the Treasury provided guidance that is helpful to us in understanding the reporting requirements. Now that we have the access and guidance we need, all reports will be submitted accurately and on time.
Auditor’s Remarks
We appreciate the County's commitment to resolving the issues noted, and will follow up during the 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.
U.S. Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, Section B, page 17, provides the reporting requirements for the Project and Expenditure Report. Section V of the Treasury’s current Project and Expenditure User Guide provides guidance for editing and revising report data (see Section IV of the January 2023 Guide).