2024-006 – WATERSHED REHABILITATION PROGRAM – LACK OF CONTROLS AND IMPROPER PERIOD OF PERFORMANCE – WRD – ALN 10.916 – MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE FINDING TYPE: MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE Finding 2024-006 Federal Program: FAIN: WATERSHED REHABILITATION PROGRAM NR19633XXXXC005 ALN: 10.916 Year(s): 2024 Federal Agency: U.S. Department of Agriculture Questioned Cost: $170,468.85 Condition Pembina County Water Resource District applied costs to the Watershed Rehabilitation Program after the period of performance, which shows a lack of internal controls. The total value of the expenses past the period of performance end date was approximately $170,468 which occurred through September 14, 2024, more than a month past the period of performance end date. Effect Pembina County Water Resource District was not in compliance with the period of performance requirement and there is an increased risk that the WRD charged unallowable expenditures to the Watershed Rehabilitation Program. Cause Pembina County Water Resource District may not have had a clear understanding of the period of performance requirements of the Watershed Rehabilitation Program. There is only one person that is aware of the period of performance and no review is done to ensure expenditures were incurred during the period of performance. In addition, they may not have been aware of the requirement to document and develop internal controls related to the federal program. Criteria Per the grant award, A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Standards for Internal Control in the Federal Government (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Context As stated in the Grant Award Amendment, the period of performance date runs from August 21, 2019 through August 8, 2024. During testing 2 of the 6 reimbursements tested had expenses that ran beyond the ending period of performance date. We tested 100% of the reimbursements. Repeat Finding No. Recommendation We recommend Pembina County Water Resource District establish and maintain internal controls and ensure compliance with the period of performance requirement as stated in grant award by establishing a review process to ensure expenses are within the period of performance for the Water Rehabilitation Program. Pembina County Water Resource District’s Response See Corrective Action Plan.
2024-007 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – IMPROPER REPORTING OF EXPENDITURES – ALN 21.027 – SIGNIFICANT DEFICIENCY & OTHER NONCOMPLIANCE FINDING TYPE: OTHER NONCOMPLIANCE Finding 2024-007 Federal Program: FAIN: CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS SLFRP5522 ALN: 21.027 Year(s): 2024 Federal Agency: U.S. Department of Treasury Questioned Cost: $0 Condition Pembina County did not properly report expenditures and obligations on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total cumulative and current expenditures and cumulative and current obligations reported were understated by $17,797.40. Effect The amounts reported as cumulative and current expenditures and current obligations on the March 31, 2024, Project and Expenditure Report were inaccurate. Cause Pembina County did not ensure that all expenditures and obligations were included when completing reporting for the March 31, 2024 Project and Expenditure Report. Criteria Page 19 of the Coronavirus State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide Version 12 (September 30, 2024) states: • An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). • An obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. An obligation also means a requirement under federal law or regulation or provision of the award terms and conditions to which a recipient becomes subject as a result of receiving or expending funds. • 2 CFR 200.303 states that 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. Context As stated in the SLFRF Compliance and Reporting Guidance for counties allocated less than $10 million with a population below 250,000 residents such as Pembina, "the initial Project and Expenditure Report covered the period from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports will cover one calendar year and must be submitted to Treasury by April 30 each year." Therefore, each year after March 31, 2022, the Pembina County must then submit an annual P&E report for the period covering April 1 202X - March 31, 202Y. Pembina County did submit the 2024 (period covering April 1, 2023-March 31, 2024) report by April 30, 2024, but did not properly include 3 expenses/obligations that were incurred between January 2024 - March 2024, totaling $17,797.40 on the 2024 P&E report. Repeat Finding No. Recommendation We recommend Pembina County review and comply with all reporting requirements of the Coronavirus State and Local Fiscal Recovery Funds program by properly reporting all expenditures and obligations in the Project and Expenditure Reports. Pembina County’s Response See Corrective Action Plan.