Audit 393475

Finding Reference Number: 2025-001 Name of Federal Agency: U.S. Department of Treasury Name of Pass-through Entity: Howard County Government Program Title: Coronavirus State and Local Fiscal Recovery Fund Federal Award No.: 02-11-0-D000-0237 Assistance Listing Number: 21.027 Federal Award Year: 2024-2025 Compliance Requirement: Suspension and debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria: Per 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Per 2 CFR section 200.303(a), a 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). Condition: during our fiscal year 2025 compliance audit, we noted that the Authority awarded all twenty-seven (27) subawards without checking for suspension and debarment. Context: The Authority awarded twenty-seven (27) subawards during fiscal year 2025 totaling $1,000,000, which represents over 99% of the total federal expenditures during fiscal year 2025. Cause: The Authority did not establish controls to check for suspension and debarment before awarding contracts. The Authority was also not aware of the fact that they had to check for suspension and debarment. Effect: As a result of not checking for suspension and debarment, awards may have been made to organizations that are not eligible. Identification as a Repeat Finding, if Applicable: No. Questioned Costs: None identified.Recommendation: We recommend the Authority evaluate its policies and procedures to ensure that suspension and debarment requirements are being met prior to entering into covered transactions. Policies and procedures should reiterate the three options for determining suspension and debarment status listed in 2 CFR 180.300. Responsible Official: Controller Views of Responsible Official and Planned Corrective Action: Management concurs with the audit finding. See the accompanying management’s corrective action plan for planned corrective action.

Finding Reference Number: 2025-002 Name of Federal Agency: U.S. Department of Treasury Name of Pass-through Entity: Howard County Government Program Title: Coronavirus State and Local Fiscal Recovery Fund Federal Award No.: 02-11-0-D000-0237 Assistance Listing Number: 21.027 Federal Award Year: 2024-2025 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria: Non-Federal entities are required to comply with the terms of the grant agreement. This includes preparing and submitting all required reports in a timely manner. Per 2 CFR section 200.303(a), a 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). Condition: during our fiscal year 2025 compliance audit, we noted that the Authority did not submit two out of the four quarterly detailed expense list per childcare provider report selected for testing. Context: The Authority is required to submit (4) quarterly project and expenditure report and (4) quarterly detailed expense list per childcare provider. While the quarterly project and expenditure reports were submitted timely, the authority did not prepare and submit the quarterly detailed expense list per childcare provider reports. Cause: The Authority did not have proper internal controls to ensure that all required reports were submitted timely to the grantor. Effect: As a result, the authority did not prepare and submit the quarterly detailed expense list per childcare provider reports timely. Identification as a Repeat Finding, if Applicable: No. Questioned Costs: None identified. Recommendation: We recommend the Authority evaluate its policies and procedures to ensure that it complies with the reporting requirements of the grant. Responsible Official: Controller Views of Responsible Official and Planned Corrective Action: Management concurs with the audit finding. See the accompanying management’s corrective action plan for planned corrective action.

Finding Reference Number: 2025-003 Name of Federal Agency: U.S. Department of Treasury Name of Pass-through Entity: Howard County Government Program Title: Coronavirus State and Local Fiscal Recovery Fund Federal Award No.: 02-11-0-D000-0237 Assistance Listing Number: 21.027 Federal Award Year: 2024-2025 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria: A pass-through entity (PTE) must Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR 200.332(a)(3)). Per 2 CFR section 200.303(a), a 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). Condition: During our fiscal year 2025 compliance audit, we noted that the Authority awarded all twenty-seven (27) subawards without referring to federal statutes, regulations, and the terms and conditions of the award as described in 2 CFR 200.332(a)(1), 2 CFR 200.332(a)(2), and 2 CFR 200.332(a)(3). Context: The Authority awarded twenty-seven (27) subawards during fiscal year 2025 totaling $1,000,000, which represents over 99% of the total federal expenditures during fiscal year 2025. Cause: The Authority did not have adequate controls to review subaward agreements to ensure all compliance requirements are captured, that information is consistent between pass-through entity records and the subaward, and that all required elements are included. Effect: As a result of not including the proper information in the subaward agreements, the subrecipients may not be able to comply with the terms of the grant agreement and 2 CFR part 200. Identification as a Repeat Finding, if Applicable: No. Questioned Costs: None identified.Recommendation: We recommend the Authority evaluate its policies and procedures to ensure that subaward agreements include all required information as described in 2 CFR 200.332(a)(1), 2 CFR 200.332(a)(2), and 2 CFR 200.332(a)(3). Responsible Official: Controller Views of Responsible Official and Planned Corrective Action: Management concurs with the audit finding. See the accompanying management’s corrective action plan for planned corrective action.