Audit 354873

Benton County January 1, 2022 through December 31, 2022 2022-002 The County’s internal controls were inadequate for ensuring compliance with suspension and debarment requirements and subrecipient monitoring. 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: Yes, Finding 2021-002 Description of Condition The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides direct payment to states, U.S. territories, tribal governments, metropolitan cities, counties and (through states) non-entitlement units of local government. In 2022, the County spent $6,161,820 of program funds, which included $1,070,710 that it passed through to one subrecipient. The County used the funding to provide premium pay to the County’s employees who performed essential work during the COVID-19 public health emergency, and to provide assistance to the small businesses that faced negative economic impacts due to the pandemic. 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. Suspension and Debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded from doing business with the federal government. The County may verify this by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at sam.gov. The County must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County did not have internal controls for ensuring it verified the suspension and debarment status of contractors before entering into new contracts or making purchases that exceed $25,000, paid all or in part with federal funds. Specifically, the County did not verify that one contractor paid a total of $80,707 was not suspended or debarred from participating in federal programs before contracting with them in 2022. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Subrecipient Monitoring Federal regulations require the County to monitor subrecipient’s activities to ensure they are properly spending federal funding. To determine the appropriate level of monitoring, federal regulations require the County to perform risk assessments to determine each subrecipient’s risk of noncompliance with federal statutes and regulations and terms and conditions of the subaward. The County did not have internal controls in place for ensuring compliance with subrecipient monitoring requirements. Specifically, the County did not have adequate controls for ensuring the awarding document included the required contract elements, and for ensuring it completed and documented the required risk assessments. Further, the County did not monitor subrecipient activities to provide reasonable assurance that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Suspension and Debarment County employees responsible for these purchases do not typically manage federal awards and were unaware of the federal requirements for suspension and debarment. Subrecipient Monitoring County staff used their usual contract template and were unaware of the required elements that they needed to include in the contract before contracting with the subrecipient. Staff also did not know they were required to complete a risk assessment and to monitor whether the subrecipient was disbursing funds only to eligible participants. Effect of Condition Suspension and Debarment The County did not obtain written certifications, insert clauses into the contracts or check sam.gov before entering into the contracts to verify the contractors were not suspended or debarred. Without this verification, the County increases its risk of providing federal funds to contractors that are excluded from participating in federal programs. Any payments it makes to an ineligible party would be unallowable, and the federal grantor could potentially recover them. We subsequently verified the contractors were not suspended or debarred, therefore we are not questioning costs. Subrecipient Monitoring The County did not provide its subrecipient with a contract including all the required contract elements, such as the federal award identification number, Assistant Listing Number, unique entity identifier, federal award date and indirect cost rate. Without this information, the subrecipient is less likely know that the award comes from a federal program. This also increases the risk that the subrecipient would not know they need to comply with specific program requirements, which could potentially lead them to spend funds for unallowable purposes. The County did not document the risk assessment it performed for the subrecipient. Without this documentation, it increases the risk that the County did not perform the risk assessment to ensure the proper level of monitoring of its subrecipient. The County did not monitor subrecipient activities to provide reasonable assurance the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Without adequate monitoring, there is a risk that the subrecipient may spend funds for unallowable purposes. Recommendation We recommend the County: • Establish internal controls to verify all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs • Ensure it includes in the contract all the required elements for award identification • Ensure it performs and documents the required risk assessment sufficiently for management to evaluate the results and demonstrate compliance with federal requirements • Ensure adequate monitoring of subrecipient expenditures to ensure they spend funds only for an allowable purpose County’s Response Auditor’s Remarks 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. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 332 Requirements for pass-through entities, establishes subrecipient monitoring requirements for pass through entities

Benton County January 1, 2022 through December 31, 2022 2022-002 The County’s internal controls were inadequate for ensuring compliance with suspension and debarment requirements and subrecipient monitoring. 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: Yes, Finding 2021-002 Description of Condition The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides direct payment to states, U.S. territories, tribal governments, metropolitan cities, counties and (through states) non-entitlement units of local government. In 2022, the County spent $6,161,820 of program funds, which included $1,070,710 that it passed through to one subrecipient. The County used the funding to provide premium pay to the County’s employees who performed essential work during the COVID-19 public health emergency, and to provide assistance to the small businesses that faced negative economic impacts due to the pandemic. 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. Suspension and Debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded from doing business with the federal government. The County may verify this by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at sam.gov. The County must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County did not have internal controls for ensuring it verified the suspension and debarment status of contractors before entering into new contracts or making purchases that exceed $25,000, paid all or in part with federal funds. Specifically, the County did not verify that one contractor paid a total of $80,707 was not suspended or debarred from participating in federal programs before contracting with them in 2022. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Subrecipient Monitoring Federal regulations require the County to monitor subrecipient’s activities to ensure they are properly spending federal funding. To determine the appropriate level of monitoring, federal regulations require the County to perform risk assessments to determine each subrecipient’s risk of noncompliance with federal statutes and regulations and terms and conditions of the subaward. The County did not have internal controls in place for ensuring compliance with subrecipient monitoring requirements. Specifically, the County did not have adequate controls for ensuring the awarding document included the required contract elements, and for ensuring it completed and documented the required risk assessments. Further, the County did not monitor subrecipient activities to provide reasonable assurance that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Suspension and Debarment County employees responsible for these purchases do not typically manage federal awards and were unaware of the federal requirements for suspension and debarment. Subrecipient Monitoring County staff used their usual contract template and were unaware of the required elements that they needed to include in the contract before contracting with the subrecipient. Staff also did not know they were required to complete a risk assessment and to monitor whether the subrecipient was disbursing funds only to eligible participants. Effect of Condition Suspension and Debarment The County did not obtain written certifications, insert clauses into the contracts or check sam.gov before entering into the contracts to verify the contractors were not suspended or debarred. Without this verification, the County increases its risk of providing federal funds to contractors that are excluded from participating in federal programs. Any payments it makes to an ineligible party would be unallowable, and the federal grantor could potentially recover them. We subsequently verified the contractors were not suspended or debarred, therefore we are not questioning costs. Subrecipient Monitoring The County did not provide its subrecipient with a contract including all the required contract elements, such as the federal award identification number, Assistant Listing Number, unique entity identifier, federal award date and indirect cost rate. Without this information, the subrecipient is less likely know that the award comes from a federal program. This also increases the risk that the subrecipient would not know they need to comply with specific program requirements, which could potentially lead them to spend funds for unallowable purposes. The County did not document the risk assessment it performed for the subrecipient. Without this documentation, it increases the risk that the County did not perform the risk assessment to ensure the proper level of monitoring of its subrecipient. The County did not monitor subrecipient activities to provide reasonable assurance the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Without adequate monitoring, there is a risk that the subrecipient may spend funds for unallowable purposes. Recommendation We recommend the County: • Establish internal controls to verify all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs • Ensure it includes in the contract all the required elements for award identification • Ensure it performs and documents the required risk assessment sufficiently for management to evaluate the results and demonstrate compliance with federal requirements • Ensure adequate monitoring of subrecipient expenditures to ensure they spend funds only for an allowable purpose County’s Response Auditor’s Remarks 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. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 332 Requirements for pass-through entities, establishes subrecipient monitoring requirements for pass through entities

Benton County January 1, 2022 through December 31, 2022 2022-002 The County’s internal controls were inadequate for ensuring compliance with suspension and debarment requirements and subrecipient monitoring. 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: Yes, Finding 2021-002 Description of Condition The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides direct payment to states, U.S. territories, tribal governments, metropolitan cities, counties and (through states) non-entitlement units of local government. In 2022, the County spent $6,161,820 of program funds, which included $1,070,710 that it passed through to one subrecipient. The County used the funding to provide premium pay to the County’s employees who performed essential work during the COVID-19 public health emergency, and to provide assistance to the small businesses that faced negative economic impacts due to the pandemic. 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. Suspension and Debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded from doing business with the federal government. The County may verify this by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at sam.gov. The County must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County did not have internal controls for ensuring it verified the suspension and debarment status of contractors before entering into new contracts or making purchases that exceed $25,000, paid all or in part with federal funds. Specifically, the County did not verify that one contractor paid a total of $80,707 was not suspended or debarred from participating in federal programs before contracting with them in 2022. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Subrecipient Monitoring Federal regulations require the County to monitor subrecipient’s activities to ensure they are properly spending federal funding. To determine the appropriate level of monitoring, federal regulations require the County to perform risk assessments to determine each subrecipient’s risk of noncompliance with federal statutes and regulations and terms and conditions of the subaward. The County did not have internal controls in place for ensuring compliance with subrecipient monitoring requirements. Specifically, the County did not have adequate controls for ensuring the awarding document included the required contract elements, and for ensuring it completed and documented the required risk assessments. Further, the County did not monitor subrecipient activities to provide reasonable assurance that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Suspension and Debarment County employees responsible for these purchases do not typically manage federal awards and were unaware of the federal requirements for suspension and debarment. Subrecipient Monitoring County staff used their usual contract template and were unaware of the required elements that they needed to include in the contract before contracting with the subrecipient. Staff also did not know they were required to complete a risk assessment and to monitor whether the subrecipient was disbursing funds only to eligible participants. Effect of Condition Suspension and Debarment The County did not obtain written certifications, insert clauses into the contracts or check sam.gov before entering into the contracts to verify the contractors were not suspended or debarred. Without this verification, the County increases its risk of providing federal funds to contractors that are excluded from participating in federal programs. Any payments it makes to an ineligible party would be unallowable, and the federal grantor could potentially recover them. We subsequently verified the contractors were not suspended or debarred, therefore we are not questioning costs. Subrecipient Monitoring The County did not provide its subrecipient with a contract including all the required contract elements, such as the federal award identification number, Assistant Listing Number, unique entity identifier, federal award date and indirect cost rate. Without this information, the subrecipient is less likely know that the award comes from a federal program. This also increases the risk that the subrecipient would not know they need to comply with specific program requirements, which could potentially lead them to spend funds for unallowable purposes. The County did not document the risk assessment it performed for the subrecipient. Without this documentation, it increases the risk that the County did not perform the risk assessment to ensure the proper level of monitoring of its subrecipient. The County did not monitor subrecipient activities to provide reasonable assurance the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Without adequate monitoring, there is a risk that the subrecipient may spend funds for unallowable purposes. Recommendation We recommend the County: • Establish internal controls to verify all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs • Ensure it includes in the contract all the required elements for award identification • Ensure it performs and documents the required risk assessment sufficiently for management to evaluate the results and demonstrate compliance with federal requirements • Ensure adequate monitoring of subrecipient expenditures to ensure they spend funds only for an allowable purpose County’s Response Auditor’s Remarks 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. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 332 Requirements for pass-through entities, establishes subrecipient monitoring requirements for pass through entities

Benton County January 1, 2022 through December 31, 2022 2022-003 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements for the Emergency Rental Assistance Program. Assistance Listing Number and Title: 21.023, COVID-19 Emergency Rental Assistance Program Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Pass-through Award/Contract Number: Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition Congress passed two acts authorizing federal funds for the Emergency Rental Assistance (ERA) program to respond to the COVID-19 pandemic. The Consolidated Appropriations Act, 2021 was enacted on December 27, 2020, and provided $25 billion for ERA. These funds are known as ERA1. The American Rescue Plan Act of 2021 was enacted on March 11, 2021, and provided $21.6 billion in additional funding for ERA. These funds are known as ERA2. These acts provide funds directly to states, U.S. territories, local governments and, in the case of ERA1, Indian tribes to assist eligible households through existing or newly created rental assistance programs. The purpose of the ERA program is to provide direct payments to eligible entities that award financial assistance to eligible households as well as provide housing stability services. ERA grantees may provide assistance to eligible households directly or to landlords and utility providers on behalf of eligible households. The County received an award from the U.S. Department of the Treasury to provide financial assistance to eligible households, including payment of rent, utilities and other housing stability services. During fiscal year 2022, the County spent $229,617 of this award. 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. To comply with reporting requirements, the County must submit to the Treasury monthly and quarterly ERA 1 and ERA 2 reports (special reporting 1505-0266 and 1505-0270, respectively). The monthly reports must identify key information such as the number of participating households the county provided ERA assistance of any kind to and the total amount of ERA funds the County expended for these households. The quarterly reports identify the total amount obligated by the County and total amount expended. Both reports are important because the Treasury uses the amounts expended and obligated to assess grantee eligibility for reallocation payments and to determine if the County is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Our audit found that the County’s internal controls were inadequate for ensuring it submitted the monthly and quarterly ERA reports and included accurate information. Specifically, the County did not submit three of the nine required monthly reports. Additionally, the County did not include the required accumulative expenditures and accumulated obligations in the final quarterly report. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Due to staff turnover and technical issues in accessing the Treasurer’s portal, the County did not submit all the required monthly reports. Also, the County employee responsible for the program was new to the position and did not ensure the quarterly reports included all required information. Effect of Condition The U.S. Department of Treasury uses these reports to assess grantee eligibility for reallocation payments and to determine if the grantee is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Any inaccurate information in these monthly and quarterly reports limits the Treasury’s ability to decide reallocations, maintain transparency and fulfill its legal obligations. Since the County was unable to provide the data it used to prepare the reports, it cannot demonstrate the accuracy of the information reported. Recommendation We recommend that the County implement internal controls to ensure it submits all monthly reports and accurate quarterly reports. County’s Response Auditor’s Remarks 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. Title 2 CFR Part 200, Uniform Guidance, section 329, Monitoring and reporting program performance, describes the requirements for auditees to perform oversight of the operations of the federal award supported activities to ensure compliance with applicable federal requirements and performance expectations. The Consolidated Appropriations Act, 2021, title V, Banking, subtitle A, Emergency Rental Assistance, section 501(g), Reporting requirements, describes the required performance and financial data and frequency of reports for this federal program. Section 501(b) describes the reallocation requirements.

Benton County January 1, 2022 through December 31, 2022 2022-003 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements for the Emergency Rental Assistance Program. Assistance Listing Number and Title: 21.023, COVID-19 Emergency Rental Assistance Program Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Pass-through Award/Contract Number: Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition Congress passed two acts authorizing federal funds for the Emergency Rental Assistance (ERA) program to respond to the COVID-19 pandemic. The Consolidated Appropriations Act, 2021 was enacted on December 27, 2020, and provided $25 billion for ERA. These funds are known as ERA1. The American Rescue Plan Act of 2021 was enacted on March 11, 2021, and provided $21.6 billion in additional funding for ERA. These funds are known as ERA2. These acts provide funds directly to states, U.S. territories, local governments and, in the case of ERA1, Indian tribes to assist eligible households through existing or newly created rental assistance programs. The purpose of the ERA program is to provide direct payments to eligible entities that award financial assistance to eligible households as well as provide housing stability services. ERA grantees may provide assistance to eligible households directly or to landlords and utility providers on behalf of eligible households. The County received an award from the U.S. Department of the Treasury to provide financial assistance to eligible households, including payment of rent, utilities and other housing stability services. During fiscal year 2022, the County spent $229,617 of this award. 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. To comply with reporting requirements, the County must submit to the Treasury monthly and quarterly ERA 1 and ERA 2 reports (special reporting 1505-0266 and 1505-0270, respectively). The monthly reports must identify key information such as the number of participating households the county provided ERA assistance of any kind to and the total amount of ERA funds the County expended for these households. The quarterly reports identify the total amount obligated by the County and total amount expended. Both reports are important because the Treasury uses the amounts expended and obligated to assess grantee eligibility for reallocation payments and to determine if the County is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Our audit found that the County’s internal controls were inadequate for ensuring it submitted the monthly and quarterly ERA reports and included accurate information. Specifically, the County did not submit three of the nine required monthly reports. Additionally, the County did not include the required accumulative expenditures and accumulated obligations in the final quarterly report. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Due to staff turnover and technical issues in accessing the Treasurer’s portal, the County did not submit all the required monthly reports. Also, the County employee responsible for the program was new to the position and did not ensure the quarterly reports included all required information. Effect of Condition The U.S. Department of Treasury uses these reports to assess grantee eligibility for reallocation payments and to determine if the grantee is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Any inaccurate information in these monthly and quarterly reports limits the Treasury’s ability to decide reallocations, maintain transparency and fulfill its legal obligations. Since the County was unable to provide the data it used to prepare the reports, it cannot demonstrate the accuracy of the information reported. Recommendation We recommend that the County implement internal controls to ensure it submits all monthly reports and accurate quarterly reports. County’s Response Auditor’s Remarks 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. Title 2 CFR Part 200, Uniform Guidance, section 329, Monitoring and reporting program performance, describes the requirements for auditees to perform oversight of the operations of the federal award supported activities to ensure compliance with applicable federal requirements and performance expectations. The Consolidated Appropriations Act, 2021, title V, Banking, subtitle A, Emergency Rental Assistance, section 501(g), Reporting requirements, describes the required performance and financial data and frequency of reports for this federal program. Section 501(b) describes the reallocation requirements.

Benton County January 1, 2022 through December 31, 2022 2022-002 The County’s internal controls were inadequate for ensuring compliance with suspension and debarment requirements and subrecipient monitoring. 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: Yes, Finding 2021-002 Description of Condition The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides direct payment to states, U.S. territories, tribal governments, metropolitan cities, counties and (through states) non-entitlement units of local government. In 2022, the County spent $6,161,820 of program funds, which included $1,070,710 that it passed through to one subrecipient. The County used the funding to provide premium pay to the County’s employees who performed essential work during the COVID-19 public health emergency, and to provide assistance to the small businesses that faced negative economic impacts due to the pandemic. 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. Suspension and Debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded from doing business with the federal government. The County may verify this by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at sam.gov. The County must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County did not have internal controls for ensuring it verified the suspension and debarment status of contractors before entering into new contracts or making purchases that exceed $25,000, paid all or in part with federal funds. Specifically, the County did not verify that one contractor paid a total of $80,707 was not suspended or debarred from participating in federal programs before contracting with them in 2022. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Subrecipient Monitoring Federal regulations require the County to monitor subrecipient’s activities to ensure they are properly spending federal funding. To determine the appropriate level of monitoring, federal regulations require the County to perform risk assessments to determine each subrecipient’s risk of noncompliance with federal statutes and regulations and terms and conditions of the subaward. The County did not have internal controls in place for ensuring compliance with subrecipient monitoring requirements. Specifically, the County did not have adequate controls for ensuring the awarding document included the required contract elements, and for ensuring it completed and documented the required risk assessments. Further, the County did not monitor subrecipient activities to provide reasonable assurance that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Suspension and Debarment County employees responsible for these purchases do not typically manage federal awards and were unaware of the federal requirements for suspension and debarment. Subrecipient Monitoring County staff used their usual contract template and were unaware of the required elements that they needed to include in the contract before contracting with the subrecipient. Staff also did not know they were required to complete a risk assessment and to monitor whether the subrecipient was disbursing funds only to eligible participants. Effect of Condition Suspension and Debarment The County did not obtain written certifications, insert clauses into the contracts or check sam.gov before entering into the contracts to verify the contractors were not suspended or debarred. Without this verification, the County increases its risk of providing federal funds to contractors that are excluded from participating in federal programs. Any payments it makes to an ineligible party would be unallowable, and the federal grantor could potentially recover them. We subsequently verified the contractors were not suspended or debarred, therefore we are not questioning costs. Subrecipient Monitoring The County did not provide its subrecipient with a contract including all the required contract elements, such as the federal award identification number, Assistant Listing Number, unique entity identifier, federal award date and indirect cost rate. Without this information, the subrecipient is less likely know that the award comes from a federal program. This also increases the risk that the subrecipient would not know they need to comply with specific program requirements, which could potentially lead them to spend funds for unallowable purposes. The County did not document the risk assessment it performed for the subrecipient. Without this documentation, it increases the risk that the County did not perform the risk assessment to ensure the proper level of monitoring of its subrecipient. The County did not monitor subrecipient activities to provide reasonable assurance the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Without adequate monitoring, there is a risk that the subrecipient may spend funds for unallowable purposes. Recommendation We recommend the County: • Establish internal controls to verify all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs • Ensure it includes in the contract all the required elements for award identification • Ensure it performs and documents the required risk assessment sufficiently for management to evaluate the results and demonstrate compliance with federal requirements • Ensure adequate monitoring of subrecipient expenditures to ensure they spend funds only for an allowable purpose County’s Response Auditor’s Remarks 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. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 332 Requirements for pass-through entities, establishes subrecipient monitoring requirements for pass through entities

Benton County January 1, 2022 through December 31, 2022 2022-002 The County’s internal controls were inadequate for ensuring compliance with suspension and debarment requirements and subrecipient monitoring. 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: Yes, Finding 2021-002 Description of Condition The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides direct payment to states, U.S. territories, tribal governments, metropolitan cities, counties and (through states) non-entitlement units of local government. In 2022, the County spent $6,161,820 of program funds, which included $1,070,710 that it passed through to one subrecipient. The County used the funding to provide premium pay to the County’s employees who performed essential work during the COVID-19 public health emergency, and to provide assistance to the small businesses that faced negative economic impacts due to the pandemic. 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. Suspension and Debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded from doing business with the federal government. The County may verify this by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at sam.gov. The County must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County did not have internal controls for ensuring it verified the suspension and debarment status of contractors before entering into new contracts or making purchases that exceed $25,000, paid all or in part with federal funds. Specifically, the County did not verify that one contractor paid a total of $80,707 was not suspended or debarred from participating in federal programs before contracting with them in 2022. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Subrecipient Monitoring Federal regulations require the County to monitor subrecipient’s activities to ensure they are properly spending federal funding. To determine the appropriate level of monitoring, federal regulations require the County to perform risk assessments to determine each subrecipient’s risk of noncompliance with federal statutes and regulations and terms and conditions of the subaward. The County did not have internal controls in place for ensuring compliance with subrecipient monitoring requirements. Specifically, the County did not have adequate controls for ensuring the awarding document included the required contract elements, and for ensuring it completed and documented the required risk assessments. Further, the County did not monitor subrecipient activities to provide reasonable assurance that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Suspension and Debarment County employees responsible for these purchases do not typically manage federal awards and were unaware of the federal requirements for suspension and debarment. Subrecipient Monitoring County staff used their usual contract template and were unaware of the required elements that they needed to include in the contract before contracting with the subrecipient. Staff also did not know they were required to complete a risk assessment and to monitor whether the subrecipient was disbursing funds only to eligible participants. Effect of Condition Suspension and Debarment The County did not obtain written certifications, insert clauses into the contracts or check sam.gov before entering into the contracts to verify the contractors were not suspended or debarred. Without this verification, the County increases its risk of providing federal funds to contractors that are excluded from participating in federal programs. Any payments it makes to an ineligible party would be unallowable, and the federal grantor could potentially recover them. We subsequently verified the contractors were not suspended or debarred, therefore we are not questioning costs. Subrecipient Monitoring The County did not provide its subrecipient with a contract including all the required contract elements, such as the federal award identification number, Assistant Listing Number, unique entity identifier, federal award date and indirect cost rate. Without this information, the subrecipient is less likely know that the award comes from a federal program. This also increases the risk that the subrecipient would not know they need to comply with specific program requirements, which could potentially lead them to spend funds for unallowable purposes. The County did not document the risk assessment it performed for the subrecipient. Without this documentation, it increases the risk that the County did not perform the risk assessment to ensure the proper level of monitoring of its subrecipient. The County did not monitor subrecipient activities to provide reasonable assurance the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Without adequate monitoring, there is a risk that the subrecipient may spend funds for unallowable purposes. Recommendation We recommend the County: • Establish internal controls to verify all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs • Ensure it includes in the contract all the required elements for award identification • Ensure it performs and documents the required risk assessment sufficiently for management to evaluate the results and demonstrate compliance with federal requirements • Ensure adequate monitoring of subrecipient expenditures to ensure they spend funds only for an allowable purpose County’s Response Auditor’s Remarks 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. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 332 Requirements for pass-through entities, establishes subrecipient monitoring requirements for pass through entities

Benton County January 1, 2022 through December 31, 2022 2022-002 The County’s internal controls were inadequate for ensuring compliance with suspension and debarment requirements and subrecipient monitoring. 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: Yes, Finding 2021-002 Description of Condition The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides direct payment to states, U.S. territories, tribal governments, metropolitan cities, counties and (through states) non-entitlement units of local government. In 2022, the County spent $6,161,820 of program funds, which included $1,070,710 that it passed through to one subrecipient. The County used the funding to provide premium pay to the County’s employees who performed essential work during the COVID-19 public health emergency, and to provide assistance to the small businesses that faced negative economic impacts due to the pandemic. 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. Suspension and Debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors have not been suspended, debarred or otherwise excluded from doing business with the federal government. The County may verify this by collecting a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at sam.gov. The County must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County did not have internal controls for ensuring it verified the suspension and debarment status of contractors before entering into new contracts or making purchases that exceed $25,000, paid all or in part with federal funds. Specifically, the County did not verify that one contractor paid a total of $80,707 was not suspended or debarred from participating in federal programs before contracting with them in 2022. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Subrecipient Monitoring Federal regulations require the County to monitor subrecipient’s activities to ensure they are properly spending federal funding. To determine the appropriate level of monitoring, federal regulations require the County to perform risk assessments to determine each subrecipient’s risk of noncompliance with federal statutes and regulations and terms and conditions of the subaward. The County did not have internal controls in place for ensuring compliance with subrecipient monitoring requirements. Specifically, the County did not have adequate controls for ensuring the awarding document included the required contract elements, and for ensuring it completed and documented the required risk assessments. Further, the County did not monitor subrecipient activities to provide reasonable assurance that the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition Suspension and Debarment County employees responsible for these purchases do not typically manage federal awards and were unaware of the federal requirements for suspension and debarment. Subrecipient Monitoring County staff used their usual contract template and were unaware of the required elements that they needed to include in the contract before contracting with the subrecipient. Staff also did not know they were required to complete a risk assessment and to monitor whether the subrecipient was disbursing funds only to eligible participants. Effect of Condition Suspension and Debarment The County did not obtain written certifications, insert clauses into the contracts or check sam.gov before entering into the contracts to verify the contractors were not suspended or debarred. Without this verification, the County increases its risk of providing federal funds to contractors that are excluded from participating in federal programs. Any payments it makes to an ineligible party would be unallowable, and the federal grantor could potentially recover them. We subsequently verified the contractors were not suspended or debarred, therefore we are not questioning costs. Subrecipient Monitoring The County did not provide its subrecipient with a contract including all the required contract elements, such as the federal award identification number, Assistant Listing Number, unique entity identifier, federal award date and indirect cost rate. Without this information, the subrecipient is less likely know that the award comes from a federal program. This also increases the risk that the subrecipient would not know they need to comply with specific program requirements, which could potentially lead them to spend funds for unallowable purposes. The County did not document the risk assessment it performed for the subrecipient. Without this documentation, it increases the risk that the County did not perform the risk assessment to ensure the proper level of monitoring of its subrecipient. The County did not monitor subrecipient activities to provide reasonable assurance the subrecipient administered the subaward in compliance with the terms and conditions of the subaward. Without adequate monitoring, there is a risk that the subrecipient may spend funds for unallowable purposes. Recommendation We recommend the County: • Establish internal controls to verify all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs • Ensure it includes in the contract all the required elements for award identification • Ensure it performs and documents the required risk assessment sufficiently for management to evaluate the results and demonstrate compliance with federal requirements • Ensure adequate monitoring of subrecipient expenditures to ensure they spend funds only for an allowable purpose County’s Response Auditor’s Remarks 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. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 332 Requirements for pass-through entities, establishes subrecipient monitoring requirements for pass through entities

Benton County January 1, 2022 through December 31, 2022 2022-003 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements for the Emergency Rental Assistance Program. Assistance Listing Number and Title: 21.023, COVID-19 Emergency Rental Assistance Program Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Pass-through Award/Contract Number: Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition Congress passed two acts authorizing federal funds for the Emergency Rental Assistance (ERA) program to respond to the COVID-19 pandemic. The Consolidated Appropriations Act, 2021 was enacted on December 27, 2020, and provided $25 billion for ERA. These funds are known as ERA1. The American Rescue Plan Act of 2021 was enacted on March 11, 2021, and provided $21.6 billion in additional funding for ERA. These funds are known as ERA2. These acts provide funds directly to states, U.S. territories, local governments and, in the case of ERA1, Indian tribes to assist eligible households through existing or newly created rental assistance programs. The purpose of the ERA program is to provide direct payments to eligible entities that award financial assistance to eligible households as well as provide housing stability services. ERA grantees may provide assistance to eligible households directly or to landlords and utility providers on behalf of eligible households. The County received an award from the U.S. Department of the Treasury to provide financial assistance to eligible households, including payment of rent, utilities and other housing stability services. During fiscal year 2022, the County spent $229,617 of this award. 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. To comply with reporting requirements, the County must submit to the Treasury monthly and quarterly ERA 1 and ERA 2 reports (special reporting 1505-0266 and 1505-0270, respectively). The monthly reports must identify key information such as the number of participating households the county provided ERA assistance of any kind to and the total amount of ERA funds the County expended for these households. The quarterly reports identify the total amount obligated by the County and total amount expended. Both reports are important because the Treasury uses the amounts expended and obligated to assess grantee eligibility for reallocation payments and to determine if the County is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Our audit found that the County’s internal controls were inadequate for ensuring it submitted the monthly and quarterly ERA reports and included accurate information. Specifically, the County did not submit three of the nine required monthly reports. Additionally, the County did not include the required accumulative expenditures and accumulated obligations in the final quarterly report. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Due to staff turnover and technical issues in accessing the Treasurer’s portal, the County did not submit all the required monthly reports. Also, the County employee responsible for the program was new to the position and did not ensure the quarterly reports included all required information. Effect of Condition The U.S. Department of Treasury uses these reports to assess grantee eligibility for reallocation payments and to determine if the grantee is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Any inaccurate information in these monthly and quarterly reports limits the Treasury’s ability to decide reallocations, maintain transparency and fulfill its legal obligations. Since the County was unable to provide the data it used to prepare the reports, it cannot demonstrate the accuracy of the information reported. Recommendation We recommend that the County implement internal controls to ensure it submits all monthly reports and accurate quarterly reports. County’s Response Auditor’s Remarks 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. Title 2 CFR Part 200, Uniform Guidance, section 329, Monitoring and reporting program performance, describes the requirements for auditees to perform oversight of the operations of the federal award supported activities to ensure compliance with applicable federal requirements and performance expectations. The Consolidated Appropriations Act, 2021, title V, Banking, subtitle A, Emergency Rental Assistance, section 501(g), Reporting requirements, describes the required performance and financial data and frequency of reports for this federal program. Section 501(b) describes the reallocation requirements.

Benton County January 1, 2022 through December 31, 2022 2022-003 The County did not have adequate internal controls for ensuring compliance with federal reporting requirements for the Emergency Rental Assistance Program. Assistance Listing Number and Title: 21.023, COVID-19 Emergency Rental Assistance Program Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Pass-through Award/Contract Number: Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition Congress passed two acts authorizing federal funds for the Emergency Rental Assistance (ERA) program to respond to the COVID-19 pandemic. The Consolidated Appropriations Act, 2021 was enacted on December 27, 2020, and provided $25 billion for ERA. These funds are known as ERA1. The American Rescue Plan Act of 2021 was enacted on March 11, 2021, and provided $21.6 billion in additional funding for ERA. These funds are known as ERA2. These acts provide funds directly to states, U.S. territories, local governments and, in the case of ERA1, Indian tribes to assist eligible households through existing or newly created rental assistance programs. The purpose of the ERA program is to provide direct payments to eligible entities that award financial assistance to eligible households as well as provide housing stability services. ERA grantees may provide assistance to eligible households directly or to landlords and utility providers on behalf of eligible households. The County received an award from the U.S. Department of the Treasury to provide financial assistance to eligible households, including payment of rent, utilities and other housing stability services. During fiscal year 2022, the County spent $229,617 of this award. 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. To comply with reporting requirements, the County must submit to the Treasury monthly and quarterly ERA 1 and ERA 2 reports (special reporting 1505-0266 and 1505-0270, respectively). The monthly reports must identify key information such as the number of participating households the county provided ERA assistance of any kind to and the total amount of ERA funds the County expended for these households. The quarterly reports identify the total amount obligated by the County and total amount expended. Both reports are important because the Treasury uses the amounts expended and obligated to assess grantee eligibility for reallocation payments and to determine if the County is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Our audit found that the County’s internal controls were inadequate for ensuring it submitted the monthly and quarterly ERA reports and included accurate information. Specifically, the County did not submit three of the nine required monthly reports. Additionally, the County did not include the required accumulative expenditures and accumulated obligations in the final quarterly report. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Due to staff turnover and technical issues in accessing the Treasurer’s portal, the County did not submit all the required monthly reports. Also, the County employee responsible for the program was new to the position and did not ensure the quarterly reports included all required information. Effect of Condition The U.S. Department of Treasury uses these reports to assess grantee eligibility for reallocation payments and to determine if the grantee is subject to involuntary recapture of funds to reallocate to other grantees or return to the grantor. Any inaccurate information in these monthly and quarterly reports limits the Treasury’s ability to decide reallocations, maintain transparency and fulfill its legal obligations. Since the County was unable to provide the data it used to prepare the reports, it cannot demonstrate the accuracy of the information reported. Recommendation We recommend that the County implement internal controls to ensure it submits all monthly reports and accurate quarterly reports. County’s Response Auditor’s Remarks 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. Title 2 CFR Part 200, Uniform Guidance, section 329, Monitoring and reporting program performance, describes the requirements for auditees to perform oversight of the operations of the federal award supported activities to ensure compliance with applicable federal requirements and performance expectations. The Consolidated Appropriations Act, 2021, title V, Banking, subtitle A, Emergency Rental Assistance, section 501(g), Reporting requirements, describes the required performance and financial data and frequency of reports for this federal program. Section 501(b) describes the reallocation requirements.