Audit 397853

U.S. Department of Housing and Urban Development, passed through Barren County Fiscal Court ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria: 2 CFR 180 subpart C includes the responsibilities of persons who participate in covered transactions. 2 CFR 200.303 requires recipients and subrecipients to establish, document, and maintain effective internal controls over Federal awards. Condition: During our audit procedures, we noted there was no process in place to ensure vendors were not on a suspension or debarment list, and were eligible to be reimbursed with federal grant funds. Cause: Certain internal controls were not in place to prevent or detect and correct payments made to suspended or debarred vendors. Effect: Federal funds could be used to reimburse payments made to vendors that are suspended or debarred. Questioned Costs: None. Recommendation: We recommend management obtain a greater understanding of the suspension and debarment contained in 2 CFR 180, and implement a review process whereby vendors are periodically checked for suspension and debarment. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and as a result, the Authority will implement procedures to include verifying new and existing vendors are not on suspension and debarment listings.

U.S. Department of Housing and Urban Development, passed through Barren County Fiscal Court ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria: 2 CFR 200.327 requires non-Federal entities to include a provision for compliance with the Davis-Bacon Act as supplemented by Department of Labor regulations. The Davis-Bason Act requires contractors to pay prevailing wages on federally funded or assisted construction projects, and requires non-Federal entities entering into such construction contracts to collect weekly certified payroll reports for all weeks in which wages are paid to construction workers. 2 CFR 200.303 requires recipients and subrecipients to establish, document, and maintain effective controls over Federal awards. Condition: During our audit procedures, we noted the Authority did not notify contractors that Federal funds would be in payments. As such, contractors did not include federal prevailing wage language in their bids/contracts, and did not provide weekly certified payroll reports to the Authority. Cause: Management was unaware of the requirements of prevailing wage for federal construction grants, and as such, did not communicate to contractors that federal funds would be utilized. Effect: The Authority was not in compliance with the Davis-Bacon Act and related regulations. Questioned Costs: Unable to determine. Recommendation: We recommend management obtain a greater understanding of the Davis-Bacon Act, and implement a review process whereby contracts and invoices are not approved without appropriate prevailing wage consideration and certified payrolls. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and as a result, the Authority will gain a greater understanding of HUD grants, and will implement a review process to ensure prevailing wage requirements are considered prior to approving contracts and invoices.

U.S. Department of Housing and Urban Development, passed through Barren County Fiscal Court ALN 14.251 – Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Contract No. B-22-CP-KY-0347 (2022) and B-23-CP-KY-0612 (2023) Criteria: 2 CFR 200.303 requires recipients and subrecipients to establish, document, and maintain effective internal controls over Federal awards. Condition: During our audit procedures, we noted there was no process in place to ensure periodic reporting was submitted timely and accurately. Cause: Certain internal controls were not in place to prevent or detect lack of periodic reporting, or inaccurate reporting. Effect: Federal funds could be withheld if periodic reports are not submitted, or are inaccurate. Questioned Costs: None Recommendation: We recommend management implements a review process whereby there is a review control over the submission of period reports. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and as a result, the Authority will implement a review process over required periodic reporting.