Audit 365155

Finding No. 2024-004 – Procurement and Suspension and Debarment Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: March 2021 through December 2026 Type of finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition: During our testing, we noted the County did not have internal controls designed to ensure compliance with federal procurement and suspension and debarment requirements. Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement and suspension and debarment. The County should have internal controls designed to ensure compliance with those provisions. Questioned costs: None Context: During our testing, it was noted that none of the three transactions tested had proper documentation to verify federal grant procurement requirements were complied with. Additionally, it was noted the County did not have an internal control to properly ensure contractors utilized were not suspended or debarred. Cause: The County does not have a written procurement policy in place that clearly addresses compliance with federal grant requirements per the Uniform Guidance. Effect: The County’s noncompliance with procurement and suspension and debarment requirements could lead to a negative impact on future funding for the County. Repeat finding: Yes Recommendation: We recommend the County review the federal procurement requirements outlined in the federal Uniform Guidance and create a written policy to address federal compliance requirements. Additionally, we recommend a designated individual at the County ensures purchases made with federal grant funding comply with federal procurement requirements by type of procurement (micropurchase, small purchase, sole-source, etc) and also suspension and debarment requirements. Views of responsible officials and planned corrective action: The Jackson County Board has and will continue to adhere to the state of Illinois procurement policy. Additionally, the Jackson County Board has created a procurement policy that addresses the federal compliance requirements as outlined in the Federal Uniform Guidance.

Finding No. 2024-005 – Payroll Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: March 2021 through December 2026 Type of finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition: During our testing, we noted the County improperly reported payroll expenditures incurred in previous fiscal years on the 2024 Schedule of Expenditures of Federal Awards (SEFA). Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of grant expenditures. The County should have internal controls designed to ensure compliance with those provisions. Questioned costs: $181,356 Context: During our testing, it was noted that the County claimed $181,356 of payroll expenditures that were incurred in prior years on the fiscal year 2024 SEFA. The costs were within the grant award period, however, the expenditures reported on the 2024 SEFA do not match the financial statements. Cause: In an effort to utilize grant funding, the County elected to claim eligible costs from previous fiscal years. Effect: The County’s noncompliance with federal requirements could lead to a negative impact on future funding for the County. Repeat finding: No Recommendation: We recommend the County ensure expenditures are recorded on SEFA in the fiscal year they are incurred. Views of responsible officials and planned corrective action: The County agrees with this finding. The questioned costs are related to eligible payroll costs that were reported on the current year SEFA in error, rather than in the fiscal year in which they were incurred. The County recommends training for payroll and accounting staff related to proper recognition of expenses on the SEFA and documentation standards of the COVID-19 Coronavirus State and Local Fiscal Recovery Funds program.

Finding No. 2024-004 – Procurement and Suspension and Debarment Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: March 2021 through December 2026 Type of finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition: During our testing, we noted the County did not have internal controls designed to ensure compliance with federal procurement and suspension and debarment requirements. Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement and suspension and debarment. The County should have internal controls designed to ensure compliance with those provisions. Questioned costs: None Context: During our testing, it was noted that none of the three transactions tested had proper documentation to verify federal grant procurement requirements were complied with. Additionally, it was noted the County did not have an internal control to properly ensure contractors utilized were not suspended or debarred. Cause: The County does not have a written procurement policy in place that clearly addresses compliance with federal grant requirements per the Uniform Guidance. Effect: The County’s noncompliance with procurement and suspension and debarment requirements could lead to a negative impact on future funding for the County. Repeat finding: Yes Recommendation: We recommend the County review the federal procurement requirements outlined in the federal Uniform Guidance and create a written policy to address federal compliance requirements. Additionally, we recommend a designated individual at the County ensures purchases made with federal grant funding comply with federal procurement requirements by type of procurement (micropurchase, small purchase, sole-source, etc) and also suspension and debarment requirements. Views of responsible officials and planned corrective action: The Jackson County Board has and will continue to adhere to the state of Illinois procurement policy. Additionally, the Jackson County Board has created a procurement policy that addresses the federal compliance requirements as outlined in the Federal Uniform Guidance.

Finding No. 2024-005 – Payroll Federal Agency: U.S. Department of Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: March 2021 through December 2026 Type of finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition: During our testing, we noted the County improperly reported payroll expenditures incurred in previous fiscal years on the 2024 Schedule of Expenditures of Federal Awards (SEFA). Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of grant expenditures. The County should have internal controls designed to ensure compliance with those provisions. Questioned costs: $181,356 Context: During our testing, it was noted that the County claimed $181,356 of payroll expenditures that were incurred in prior years on the fiscal year 2024 SEFA. The costs were within the grant award period, however, the expenditures reported on the 2024 SEFA do not match the financial statements. Cause: In an effort to utilize grant funding, the County elected to claim eligible costs from previous fiscal years. Effect: The County’s noncompliance with federal requirements could lead to a negative impact on future funding for the County. Repeat finding: No Recommendation: We recommend the County ensure expenditures are recorded on SEFA in the fiscal year they are incurred. Views of responsible officials and planned corrective action: The County agrees with this finding. The questioned costs are related to eligible payroll costs that were reported on the current year SEFA in error, rather than in the fiscal year in which they were incurred. The County recommends training for payroll and accounting staff related to proper recognition of expenses on the SEFA and documentation standards of the COVID-19 Coronavirus State and Local Fiscal Recovery Funds program.