Audit 371844

2024-006: U.S. Department of Treasury COVID-19, Emergency Rental Assistance Program, 21.023 Eligibility Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing number 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Internal Controls requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statues, regulations, and terms and conditions of the federal awards. Condition: For one month selected for testing, the Human Services Agency did not have documented internal controls over the determination of eligibility for participation in the Emergency Rental Assistance Program. Cause: The Human Services Agency did not have adequate internal controls to ensure documentation for review of the determination of eligibility of participants in the Emergency Rental Assistance Program. Effect: Participants could be deemed eligible that do not meet requirements. Questioned Costs: None. Context/Sampling: A nonstatistical sample of three months out of a population of 12 months were selected for testing. Repeat Finding from Prior Year(s): Yes, prior year finding 2023-009. Recommendation: We recommend the Human Services Agency enhance internal control policies to ensure all documentation for review of eligibility determinations of program participants is maintained. Views of Responsible Officials: Management agrees with the finding.

2024-007: U.S. Department of Treasury COVID-19, Emergency Rental Assistance Program, 21.023 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 21.023 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Internal Controls requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statues, regulations, and terms and conditions of the federal awards. The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Washoe County must submit quarterly ERA Compliance Reports that contain ERA 2 costs incurred during the covered period and households served during the covered period to Treasury Office of Inspector General. Critical information includes: • Administrative Costs Ratio – total obligations and/or expenditures for administrative costs does not exceed the relevant threshold of the total allocation (not to exceed 15% of ERA 2 across prime and all subrecipients). • Housing Stability Services Ratio – total obligations and/or expenditures for housing stability services is not greater than 10% of the total amount allocated. • System for Prioritizing Assistance – the number of households with less than 50% Area Median Income (AMI) receiving financial assistance is greater than the number of households with greater than 50% AMI receiving assistance. • Participants Households at Certain Income Levels Eligibility – Total households receiving assistance is not greater than the sum of AMI banded eligible households with 5 to 10% margin of error to avoid false positive for medium to large recipients. Condition: The Human Services Agency did not have internal controls established over the review of Quarterly Compliance Reports or to ensure that the reports were submitted timely. System for prioritizing assistance, participant households at certain income levels eligibility, and housing stability services ratio did not agree to underlying supporting records. The cumulative impact is as follows: ERA 2 Reporting Period Ended September 30, 2023 Report documentation did not have evidence of the reported amounts related to participant households so the system for prioritizing assistance and participants households at certain income levels eligibility was not able to be tested. In addition, report was not submitted on time and there was no evidence of review prior to submission. ERA 2 Reporting Period Ended December 31, 2023 Report documentation did not have evidence of the reported amounts related to participant households so the system for prioritizing assistance and participants households at certain income levels eligibility was not able to be tested. In addition, report was not submitted on time and there was no evidence of review prior to submission. ERA 2 Reporting Period Ended March 31, 2024 System for prioritizing assistance: households with less than 50% AMI was reported as 1,657 households, amount per supporting records is 1,195 households. Participants households at certain income levels: total households serviced was reported as 150 households, amount per supporting records is 91 households. In addition, report was not submitted on time and there was no evidence of review prior to submission. Cause: The Human Services Agency did not have internal controls established to ensure the Quarterly Compliance Reports agreed to internal supporting documents or that the reports were submitted timely. Effect: Inaccurate information was reported to the federal awarding agency and reports were not submitted timely. Questioned Costs: None. Context/Sampling: A nonstatistical sample of three Compliance Reports from a population of four were selected for testing. Repeat Finding from Prior Year(s): Yes, prior year finding 2023-010. Recommendation: We recommend the Human Services Agency enhance internal controls to ensure quarterly Compliance Reports agree to underlying supporting documentation and evidence of the submitted reports is maintained and that reports are submitted timely. Views of Responsible Officials: Management agrees with the finding.

2024-005: U.S. Department of Treasury, Nevada Department of Business and Industry Housing Division, Health and Human Services Child and Family Services Division, Health and Human Services Aging and Disability Services Division, Health and Human Services Health Division, and Supreme Court of Nevada COVID-19, Coronavirus State and Local Fiscal Recovery Fund (CSLFRF), 21.027 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards under assistance listing 21.027 on the Schedule of Expenditures of Federal Awards Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Washoe County must submit quarterly Project and Expenditure Reports that contain CSLFRF costs incurred during the covered period to the Treasury Office of Inspector General. Critical information includes: 􀁸 Current period obligation 􀁸 Cumulative obligation 􀁸 Current period expenditure 􀁸 Cumulative expenditure 􀁸 Revenue loss calculation validation 􀁸 Capital expenditures – quantifiable objective criteria: The recipient has the required written justification in their grant file if the total of the capital expenditures costs in a project is greater than $1 million and less than $10 million; or, the recipient submitted the required justification to Treasury if (1) a project has total capital expenditures enumerated by Treasury in the Final Rule; or (2) the total of a projects capital expenditures costs is greater than $1 million for capital expenditures not enumerated by Treasury in the Final Rule. Condition: The Office of the County Manager did not have adequate internal controls to ensure reporting requirements were met. For two of the quarterly reports selected, written justification for capital projects with expenditures exceeding $1 million was not maintained for all amounts that met the threshold in the reporting. In addition, the critical information reported did not have underlying support that tied to the reported amounts. Cause: The Office of the County Manager did not have adequate internal controls to ensure proper documentation was maintained for reporting requirements. Effect: Amounts reported to the Department of Treasury for capital expenditures may not have written justification or underlying support. Questioned Costs: None. Context/Sampling: A nonstatistical sample of two out of four quarterly reports were selected for testing. Repeat Finding from Prior Year(s): Yes, prior year finding 2023-006. Recommendation: We recommend the Office of the County Manager enhance internal controls to ensure appropriate documentation to support reporting is maintained. Views of Responsible Officials: Management agrees with the finding.

2024-004: U.S. Department of Treasury COVID-19, Coronavirus State and Local Fiscal Recovery Fund, 21.027 Subrecipient Monitoring Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 21.027 on the Schedule of Expenditures and Federal Awards Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.332 requires that: Pass-through entities must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Pass-through entities must have a mechanism in place to track whether a single audit was required of the subrecipient and to verify the subrecipient took timely and appropriate action on all deficiencies and that they issued a management decision on audit findings pertaining to the Federal award. Condition: For all 29 transactions tested the assistance listing number was not communicated to the subrecipient at the time of disbursement. For all eight subrecipients tested there was no monitoring in place to track single audits of the subrecipients to ensure they were monitored or reviewed when required. Cause: The Office of the County Manager did not have adequate internal controls to ensure subrecipient monitoring requirements were followed. Effect: Noncompliance at the subrecipient level may occur and not be detected by the County. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 29 out of 191 subrecipient transactions were selected for testing. A nonstatistical sample of 8 out of 40 subrecipients were selected for testing. Repeat Finding from Prior Year(s): Yes, prior year finding 2023-004. Recommendation: We recommend the County Managers office enhance internal controls to ensure subrecipient monitoring requirements are followed. Views of Responsible Officials: Management agrees with the finding.

U.S. Department of Housing and Urban Development Economic Development Initiative, Community Project Funding, and Miscellaneous Grants, 14.251 Special Tests and Provisions – Wage Rate Requirements Material Weakness in Internal Control over Compliance Grant Award Number: B-22-CP-NV-0629 Criteria: Title 29 Code of Federal Regulations Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction (Uniform Guidance) requires Washoe County to notify contractors and subcontractors of the requirements to comply with the Wage Rate Requirements and obtained copies of certified payrolls. Condition: No documentation was available to evidence review of timely Certified Payroll Report submissions. Cause: Washoe County did not have adequate internal controls to ensure routine review of Certified Payroll Report submissions. Effect: Certified Payroll Reports may not be submitted timely by the contractor or subcontractor. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 8 Certified Payroll Report submissions out of a population of 52 was selected for testing. No evidence of review over 8 Certified Payroll Reports submitted. Repeat Finding from Prior Year(s): No Recommendation: We recommend the County enhance internal controls to ensure Certified Payroll Reports are submitted timely. Views of Responsible Officials: Management agrees with the finding.

2024-011: U.S. Department of Housing and Urban Development Economic Development Initiative, Community Project Funding, and Miscellaneous Grants, 14.251 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: B-22-CP-NV-0629 Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.328 and 200.329 requires that performance and Federal financial reports are submitted to the Federal awarding agency in accordance with program requirements. Condition: During our audit testing of reporting, we noted that the required semiannual performance and Federal financial reports were not submitted during Washoe County’s fiscal year. Cause: Washoe County did not have adequate internal controls to ensure that the required performance and Federal financial reports were submitted. Effect: The required performance and Federal financial reports were not submitted in accordance with grant requirements. Questioned Costs: None. Context/Sampling: No performance or Federal financial reports were submitted during the fiscal year to sample for testing. Repeat Finding from Prior Year(s): No Recommendation: We recommend the County enhance internal controls to ensure performance and Federal financial reports are submitted in accordance with grant requirements. Views of Responsible Officials: Management agrees with the finding.