Audit 393821

Federal program: AL 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Federal agency: U.S. Department of Treasury; Award year: 2025; Criteria: Per the 2025 Office of Management and Budget (OMB) Compliance Supplement, part 4, requirement L., Reporting, Project and Expenditure Reports are required to be submitted quarterly as specified in the Treasury’s SLFRF Compliance and Reporting Guidance.; Condition: Documentation supporting the expenditures included in the Project and Expenditure Report was not retained after the report was submitted.; Cause: The cause appears to be attributable to a lack of consistently applied procedures for retention of data files supporting American Rescue Plan Act (ARPA) reports submitted. The data file used to track expenditures reported was overwritten after the report was submitted. Additionally, rather than using the County’s ARPA/SLFRF shared folder to maintain and track this supporting documentation, the support was emailed between employees to obtain the appropriate review. Due to turnover, employees with access to these documents are no longer with the County and the tracking file supporting expenditures reported could not be located.; Effect or potential effect: A lack of effective internal controls over review of reports may potentially result in reporting inaccurate amounts.; Questioned costs: No known or estimated questioned costs identified.; Context: Out of a population of four quarterly Project and Expenditure Reports, two reports were sampled; one report selected did not include the expenditure detail and could not be located.; Repeat finding: No.; Recommendation: The County should develop and implement policies and procedures to ensure that all ARPA/SLFRF program report support is retained. Views of responsible officials: The County understands and concurs with the finding.

Federal program: AL 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Federal agency: U.S. Department of Treasury; Award year: 2025; Criteria: Per the 2025 Office of Management and Budget (OMB) Compliance Supplement, part 4, requirement I., Procurement and Suspension and Debarment, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Per Uniform Guidance section 2 CFR 200.319(a): All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and section 200.320. Per section 2 CFR 200.320(a)(2)(i): …If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources...; Condition: Procurement methods did not always follow Uniform Guidance requirements. Contracts were directly awarded to vendors without full and open competition or obtaining price or rate quotations from an adequate number of qualified sources.; Cause: The cause appears to be attributable to lack of staff training and knowledge regarding federal grant procurement requirements and which contracts support federal awards. Program staff did not appear to be aware that all federal grant contracts are required to comply with a competitive bid process, and instead applied federal funding to contracts that were directly awarded.; Effect or potential effect: Not conducting open competition or solicitation of quotations or bids could result in higher grant program costs by missing the opportunity to select the best available vendor source in the market.; Questioned costs: No known or estimated questioned costs identified.; Context: Out of a population of 100 contracts above the micro purchase threshold of $10,000 and below the simplified acquisition threshold of $250,000, two of thirteen contracts selected for testing did not follow required Uniform Guidance procurement procedures.; Repeat finding: No.; Recommendation: The County should provide training to staff regarding Uniform Guidance rules of procurement and how to identify which contracts support federal award programs.; Views of responsible officials: The County understands and concurs with the finding.

Federal program: AL 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds; Federal agency: U.S. Department of Treasury; Award year: 2025; Criteria: Per the 2025 Office of Management and Budget (OMB) Compliance Supplement, part 4, requirement M, Subrecipient Monitoring, pass-through entities are required to perform monitoring of their subrecipients. This is further described in Uniform Guidance 2 CFR 200.332 which states "A pass-through entity must...(e) Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The passthrough entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must: (1) Review financial and performance reports, (2) Ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward. Significant developments include Single Audit findings related to the subaward, other audit findings, site visits, and written notifications from a subrecipient of adverse conditions which will impact their ability to meet the milestones or the objectives of a subaward. When significant developments negatively impact the subaward, a subrecipient must provide the passthrough entity with information on their plan for corrective action and any assistance needed to resolve the situation. (3) Issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the passthrough entity as required by § 200.521. (4) Resolve audit findings specifically related to the subaward...".; Condition: Evidence was not retained of monitoring subrecipients’ financial and single audit reporting or of any follow up actions as a result of monitoring.; Cause: The cause appears to be attributable to a lack of consistently applied procedures for retention of data files supporting the performance of subrecipient monitoring. If the review was performed, it was retained within the employee’s emails and not through use of an ARPA/SLFRF shared folder. The employee performing the review is no longer with the County and the review documentation could not be located. It is undeterminable if this monitoring was performed.; Effect or potential effect: Without adequate review of the subrecipient’s financial and single audit reporting related to program expenditures incurred, the control environment, compliance with laws, regulations, and program requirements, errors or misappropriation of assets could exist without the County's knowledge.; Questioned costs: No known or estimated questioned costs identified.; Context: Out of a population of 14 subrecipients, six were selected for testing for which no evidence was retained indicating the County’s review of financial and single audit reporting of the subrecipients.; Repeat finding: No.; Recommendation: The County should develop and implement policies and procedures to ensure that all subrecipient monitoring is performed and retained.; Views of responsible officials: The County understands and concurs with the finding.

Federal program: AL 14.871, 14.879, 14. EHV Housing Voucher Cluster; Federal agency: U.S. Department of Housing and Urban Development (HUD); Award year: 2025; Criteria: Per the 2025 Office of Management and Budget (OMB) Compliance Supplement, part 4, requirement N.4., NSPIRE/Housing Quality Standards Inspections, requires the County to conduct Housing Quality Standards (HQS) inspections for units leased at least biennially to determine the unit meets the standard.; Condition: HQS inspections as required by N.4 of the 2025 OMB Compliance Supplement were not performed biennially.; Cause: The cause appears to be attributable to a shortage of inspectors performing HQS inspections.; Effect or potential effect: Without performing HQS inspections biennially, units could be leased that do not meet standards.; Questioned costs: No known or estimated questioned costs identified.; Context: The required HQS inspection was not performed within 24 months, including the extension period. Out of a population of 2,814 active participants/tenants, 40 units/tenants were selected for testing, and the HQS inspection was not performed within the required inspection period for 10 units/tenants. Repeat finding: Yes.; Recommendation: The County should hire and retain adequate staffing to ensure HQS inspections for all tenants are performed biennially.; Views of responsible officials: The County understands and concurs with the finding.