Finding 2021-004 – Internal Controls and Noncompliance Over the Schedule of Expenditures of
Federal Awards (SEFA)
PASS THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of the Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance
QUESTIONED COSTS: $-0-
Condition: During our review and reconciliation of the Schedule of Expenditures of Federal Awards
(SEFA) as initially prepared by the County, we identified federal programs that were not listed accurately
which resulted in federal expenditures being understated by $180,089.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure accurate
reporting of expenditures for all federal awards.
Effect of Condition: This condition resulted in inaccurate recording of the federal expenditures on the
SEFA. This condition could result in the failure to identify Single Audit requirements.
Recommendation: OSAI recommends county officials and department heads gain an understanding of
federal programs awarded to Choctaw County. Internal control policies and procedures should be designed
and implemented to ensure accurate reporting of expenditures on the SEFA and to ensure compliance with
federal requirements.
Management Response:
Chairman of the Board of County Commissioners: We will adopt procedures and implement to ensure
accurate reporting of expenditures on the SEFA and to ensure compliance with federal requirements.
County Clerk: We will pay more attention to what is being put on SEFA schedule.
County Treasurer: I will do my part in correcting this issue to make sure that all qualifying expenditures
are reported accurately in the future.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR § 200.508(b) Auditee responsibilities reads as follows:
The auditee must:
Prepare appropriate financial statements, including the schedule of expenditures of Federal
awards in accordance with §200.510 Financial statements.
2 CFR § 200.510(b) Financial statements reads as follows:
Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee's financial statements
which must include the total Federal awards expended as determined in accordance with
§200.502 Basis for determining Federal awards expended.
Further, GAO Standards – Section 2 – Establishing an Effective Internal Control System - Objectives of an
Entity - OV2.23 states in part:
Compliance Objective
Management conducts activities in accordance with applicable laws and regulations. As
part of specifying compliance objectives, the entity determines which laws and regulations
apply to the entity. Management is expected to set objectives that incorporate these
requirements.
Finding 2021-005 – Internal Controls Over Major Federal Program – Coronavirus Relief Fund
PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services FEDERAL
AGENCY: U.S. Department of the Treasury
ASSISTANCE LISTING NO: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles, Period
of Performance
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding
federal disbursements for Coronavirus Relief fund, we noted that Choctaw County has not established
procedures to ensure compliance with the following compliance requirements: Activities Allowed or
Unallowed; Allowable Costs/Cost Principles; and Period of Performance.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure
federal expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and loss of
federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for
these programs and implement internal control policies and procedures to ensure compliance with
requirements.
Management Response:
Chairman Board of County Commissioners: We will implement control procedures to
ensure compliance with requirements.
County Clerk: We will watch our adherence to federal requirements closer.
County Treasurer: I will assist in implementing internal controls procedures to ensure compliance.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Controls – OV1.01
states in Dpeafritn: ition of Internal Controls
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
2 CFR § 200.303 Internal Controls (a) reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Finding 2021-006 – Noncompliance Over Major Federal Program – Activities Allowed or Unallowed
and Allowable Costs/Cost Principles-Coronavirus Relief Fund
PASS THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: SA-0161
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed and Allowable Costs/Cost Principles
QUESTIONED COSTS: $59,595
Condition: After performing expenditure testwork on 100% of the program, disbursements totaling
$59,595 were not expended in accordance with the Activities Allowed or Unallowed and Allowable
Costs/Cost Principles compliance requirements due to unsubstantiated and ineligible costs. We noted the
following:
• Reimbursed payroll expenditures totaling $51,552 were previously reimbursed by another entity.
• Reimbursed payroll expenditures totaling $7,075 were previously reimbursed by another federal
grant.
• One employee’s salary totaling $569 was submitted and paid twice on two reimbursement requests.
• Expenditures totaling $399 were unaccounted for and were not supported by adequate
documentation to determine costs were incurred for allowable cost/cost principles.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure
compliance with federal award requirements.
Effect of Condition: These conditions resulted in noncompliance with grant requirements. The County
runs the risk of misappropriation of funds which could hinder the County from receiving future federal
funding. Further, this condition could result in the repayment of funds.
Recommendation: OSAI recommends the County design and implement policies and procedures to ensure
compliance with applicable grant requirements.
Management Response:
Chairman of the Board of County Commissioners: We will implement policies and procedures to ensure
compliance with applicable grant requirements.
County Clerk: We will watch closer ensure compliance with applicable grant requirements.
County Treasurer: I will do my part to assist in the design and implementation of policies and procedures
to ensure compliance with applicable grant requirements.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, 2 CFR § 200.403 - Factors affecting allowability costs states in part, “Except where
otherwise authorized by statute, costs must meet the following general criteria in order to
be allowable under Federal awards:
(g) Be adequately documented.”
The Department of the Treasury Federal Register, Vol. 86, No. 10 states in part, “Fund payments
may not be used for expenses that have been or will be reimbursed by another federal
program.”
Additionally, guidance provided in the Subrecipient Agreement - Federal Funding Certification
executed 6/04/2020 between Choctaw County and the State of Oklahoma states in part,
5. Funds provided as a direct payment from the State of Oklahoma pursuant to this
certification must adhere to official federal guidance issued or to be issued on what
constitutes a necessary expenditure. Any funds expended by a political subdivision or its
grantee(s) in any manner that does not adhere to official federal guidance or in violation of
this certification shall be returned to the State of Oklahoma Coronavirus Relief Fund.
6. Any local government entity receiving funds pursuant to this certification shall retain
documentation of all uses of the funds…
10. I acknowledge and certify that Recipient has not received, and will not apply for, federal
funds from any other source, to reimburse it for the expenditures for which funds are sought
pursuant hereto.
Finding 2021-004 – Internal Controls and Noncompliance Over the Schedule of Expenditures of
Federal Awards (SEFA)
PASS THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of the Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance
QUESTIONED COSTS: $-0-
Condition: During our review and reconciliation of the Schedule of Expenditures of Federal Awards
(SEFA) as initially prepared by the County, we identified federal programs that were not listed accurately
which resulted in federal expenditures being understated by $180,089.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure accurate
reporting of expenditures for all federal awards.
Effect of Condition: This condition resulted in inaccurate recording of the federal expenditures on the
SEFA. This condition could result in the failure to identify Single Audit requirements.
Recommendation: OSAI recommends county officials and department heads gain an understanding of
federal programs awarded to Choctaw County. Internal control policies and procedures should be designed
and implemented to ensure accurate reporting of expenditures on the SEFA and to ensure compliance with
federal requirements.
Management Response:
Chairman of the Board of County Commissioners: We will adopt procedures and implement to ensure
accurate reporting of expenditures on the SEFA and to ensure compliance with federal requirements.
County Clerk: We will pay more attention to what is being put on SEFA schedule.
County Treasurer: I will do my part in correcting this issue to make sure that all qualifying expenditures
are reported accurately in the future.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR § 200.508(b) Auditee responsibilities reads as follows:
The auditee must:
Prepare appropriate financial statements, including the schedule of expenditures of Federal
awards in accordance with §200.510 Financial statements.
2 CFR § 200.510(b) Financial statements reads as follows:
Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee's financial statements
which must include the total Federal awards expended as determined in accordance with
§200.502 Basis for determining Federal awards expended.
Further, GAO Standards – Section 2 – Establishing an Effective Internal Control System - Objectives of an
Entity - OV2.23 states in part:
Compliance Objective
Management conducts activities in accordance with applicable laws and regulations. As
part of specifying compliance objectives, the entity determines which laws and regulations
apply to the entity. Management is expected to set objectives that incorporate these
requirements.
Finding 2021-005 – Internal Controls Over Major Federal Program – Coronavirus Relief Fund
PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services FEDERAL
AGENCY: U.S. Department of the Treasury
ASSISTANCE LISTING NO: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles, Period
of Performance
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding
federal disbursements for Coronavirus Relief fund, we noted that Choctaw County has not established
procedures to ensure compliance with the following compliance requirements: Activities Allowed or
Unallowed; Allowable Costs/Cost Principles; and Period of Performance.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure
federal expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and loss of
federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for
these programs and implement internal control policies and procedures to ensure compliance with
requirements.
Management Response:
Chairman Board of County Commissioners: We will implement control procedures to
ensure compliance with requirements.
County Clerk: We will watch our adherence to federal requirements closer.
County Treasurer: I will assist in implementing internal controls procedures to ensure compliance.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Controls – OV1.01
states in Dpeafritn: ition of Internal Controls
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
2 CFR § 200.303 Internal Controls (a) reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Finding 2021-006 – Noncompliance Over Major Federal Program – Activities Allowed or Unallowed
and Allowable Costs/Cost Principles-Coronavirus Relief Fund
PASS THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: SA-0161
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed and Allowable Costs/Cost Principles
QUESTIONED COSTS: $59,595
Condition: After performing expenditure testwork on 100% of the program, disbursements totaling
$59,595 were not expended in accordance with the Activities Allowed or Unallowed and Allowable
Costs/Cost Principles compliance requirements due to unsubstantiated and ineligible costs. We noted the
following:
• Reimbursed payroll expenditures totaling $51,552 were previously reimbursed by another entity.
• Reimbursed payroll expenditures totaling $7,075 were previously reimbursed by another federal
grant.
• One employee’s salary totaling $569 was submitted and paid twice on two reimbursement requests.
• Expenditures totaling $399 were unaccounted for and were not supported by adequate
documentation to determine costs were incurred for allowable cost/cost principles.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure
compliance with federal award requirements.
Effect of Condition: These conditions resulted in noncompliance with grant requirements. The County
runs the risk of misappropriation of funds which could hinder the County from receiving future federal
funding. Further, this condition could result in the repayment of funds.
Recommendation: OSAI recommends the County design and implement policies and procedures to ensure
compliance with applicable grant requirements.
Management Response:
Chairman of the Board of County Commissioners: We will implement policies and procedures to ensure
compliance with applicable grant requirements.
County Clerk: We will watch closer ensure compliance with applicable grant requirements.
County Treasurer: I will do my part to assist in the design and implementation of policies and procedures
to ensure compliance with applicable grant requirements.
Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, 2 CFR § 200.403 - Factors affecting allowability costs states in part, “Except where
otherwise authorized by statute, costs must meet the following general criteria in order to
be allowable under Federal awards:
(g) Be adequately documented.”
The Department of the Treasury Federal Register, Vol. 86, No. 10 states in part, “Fund payments
may not be used for expenses that have been or will be reimbursed by another federal
program.”
Additionally, guidance provided in the Subrecipient Agreement - Federal Funding Certification
executed 6/04/2020 between Choctaw County and the State of Oklahoma states in part,
5. Funds provided as a direct payment from the State of Oklahoma pursuant to this
certification must adhere to official federal guidance issued or to be issued on what
constitutes a necessary expenditure. Any funds expended by a political subdivision or its
grantee(s) in any manner that does not adhere to official federal guidance or in violation of
this certification shall be returned to the State of Oklahoma Coronavirus Relief Fund.
6. Any local government entity receiving funds pursuant to this certification shall retain
documentation of all uses of the funds…
10. I acknowledge and certify that Recipient has not received, and will not apply for, federal
funds from any other source, to reimburse it for the expenditures for which funds are sought
pursuant hereto.