Audit 370280

Finding 2024-001: H. Period of Performance – Nonpayroll expenditures Federal award agency: U.S. Department of Treasury Pass-through granting agency: Unified Government of Wyandotte County, Kansas and Kansas City, Kansas Program name and ALN: Coronavirus State and Local Fiscal Recovery Funds, 21.027 (COVID-19) Federal award identification number: SLFRP3214 Federal award year: November 17, 2022 to December 31, 2024 Criteria: The Uniform Guidance stipulates that recipients may only use funds to cover costs incurred during the period stated in the grant agreement (Section 1 states November 17, 2022 until December 31, 2024) and in accordance with U.S. GAAP per 2 CFR 200.403(e). Condition: During testing, we identified cutoff errors with expenditures where items with a 2023 service period were recorded as an expenditure in 2024 (and therefore reimbursed). Cause: Lack of controls and oversight; change in upper level management/turnover during the grant period. Effect or potential effect: Failure to comply with requirements would result in return of unallowable costs and a breach in agreement and may be basis to recover grant funds by grantor. Questioned costs: $19,594. Known questioned costs identified were $15,000 relating to 1 non-payroll expenditure tested. This extrapolates to 4% of nonpayroll expenditures (tested population totaled $392,877 over total population of $513,201). As such, total questioned costs would calculate to $19,594 (projected costs total $4,594 plus known questioned costs of $15,000). Context: Expenditure period of performance was recorded in the incorrect year for 1 of 47 nonpayroll expenditures tested. Repeat finding: No. Recommendation: We recommend that the Agency establish controls and personnel establish and follow procedures to determine proper cutoff of expenditures prior to recording within the general ledger under the program code. Views of responsible officials: Management agrees with this finding. See corrective action plan.

Finding 2024-002: Procurement, suspension and debarment Federal award agency: U.S. Department of Treasury Pass-through granting agency: Unified Government of Wyandotte County, Kansas and Kansas City, Kansas Program name and ALN: Coronavirus State and Local Fiscal Recovery Funds, 21.027 (COVID-19) Federal award identification number: SLFRP3214 Federal award year: November 17, 2022 to December 31, 2024 Criteria: The Uniform Guidance stipulates that when a nonfederal entity enters into a contract or purchase with a vendor that is equal to or exceeds $25,000, the nonfederal entity must verify the entity is not suspended or debarred from participation in federal programs/grants. Condition: During testing, we identified one vendor that these procedures were not performed for. As such, the Agency's controls were not operating effectively to support the Agency had verified suspension and debarment as no documentation is maintained that can provide evidence that the Agency had verified this entity, which received $25,000 or more in federal grant funds, was not suspended or debarred prior to providing them with federal funds. Cause: A lack of maintaining documentation, as well as controls that could support this verification had been performed. Effect or potential effect: The Agency is not in compliance with suspension and debarment requirements of the Uniform Guidance. The potential effect is submitting unallowable costs, or loss of federal funding. Questioned costs: None. Context: During testing, we identified one vendor that these procedures were not performed for. As such, the Agency's controls were not operating effectively to support the Agency had verified suspension and debarment as no documentation is maintained that can provide evidence that the Agency had verified this entity, which received $25,000 or more in federal grant funds, was not suspended or debarred prior to providing them with federal funds. Repeat finding: No. Recommendation: We recommend that the Agency establish controls and personnel establish and follow procedures to determine whether vendors have been suspended and debarred prior to entering into contracts or purchase orders for all transactions and maintaining documentation supporting this verification. Views of responsible officials: Management agrees with this finding. See corrective action plan.

Finding 2024-003: Period of Performance – Indirect Costs Federal award agency: U.S. Department of Treasury Pass-through granting agency: Unified Government of Wyandotte County, Kansas and Kansas City, Kansas Program name and ALN: Coronavirus State and Local Fiscal Recovery Funds, 21.027 (COVID-19) Federal award identification number: SLFRP3214 Federal award year: November 17, 2022 to December 31, 2024 Criteria: The Uniform Guidance stipulates that recipients may apply the De Minimis rate at 10% of total direct costs. However, these indirect costs must be charged during the fiscal period (Section 1 states grant period is November 17, 2022 until December 31, 2024) and in accordance with U.S. GAAP per 2 CFR 200.403(e). Condition: During testing, we identified indirect costs were charged at a 13% rate for 2024 grant expenditures due to a catch up from the 2023 year. Cause: Lack of controls and oversight; change in upper level management/turnover during the grant period. Effect or potential effect: Failure to comply with requirements would result in return of unallowable costs and a breach in agreement and may be basis to recover grant funds by grantor. Questioned costs: $34,869 Context: During testing, we identified indirect costs were not charged to the grant at a 10% rate for the 2024 grant year. As such, the Agency's controls were not operating effectively to ensure appropriate calculations of indirect cost rates through the grant period. Repeat finding: No. Recommendation: We recommend that the Agency establish controls and personnel establish and follow procedures to calculate indirect costs charged against grants in accordance with U.S. GAAP. Views of responsible officials: Management agrees with this finding. See corrective action plan.