Audit 399334

Information on the federal program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (SLFRF), Assistance Listing Number 21.027, U.S. Department of the Treasury Criteria: The 2 CFR § 200.303 requires that non-Federal entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, the SLFRF Compliance and Reporting Guidance requires recipients to maintain records and financial documents for a period of five years after all funds have been expended or returned to Treasury, which includes documentation of the reports submitted. Condition: During our testing of the quarterly Project and Expenditure (P&E) reports submitted to the U.S. Department of the Treasury, the County was unable to provide documentation or audit logs from the Treasury Portal demonstrating the internal review and approval process. Specifically, the County could not provide evidence of: • The identity of the individual who prepared the report. • The identity of the supervisor/official who reviewed and authorized the submission. • The specific date and time the reports were submitted. Due to significant staff turnover, the login credentials and historical "submission confirmation" records were not maintained or accessible for the audit period. Context/Cause: The County experienced turnover in key administrative positions responsible for ARPA grant management. The departing staff did not transition portal access or download the "Submission Summary" reports prior to their departure, and the County did not have a secondary process to archive these records outside of the portal. Effects: Without evidence of a formal review and approval process, there is an increased risk that inaccurate or unauthorized financial data could be reported to the Federal government. This lack of documentation constitutes a significant deficiency in internal controls over the reporting compliance requirement. Recommendation: The County should strengthen its internal controls over Federal reporting by archiving submissions, utilizing formal approval logs, and implementing succession planning. Auditee’s Response: We concur with the finding

Information on the federal program: Medicaid Cluster (Medicaid), Assistance Listing Number 93.778, U.S. Department of Health and Human Services, passed through the N.C. Department of Health and Human Services (NCDHHS), Division of Social Services Criteria: Per the NCDHHS policy manual, salaries, wages, and fringe benefits of Department of Social Service employees hired under the state merit system are allowable. Salaries shall be allocated to programs by time distribution methods and supported by payroll and attendance records for individuals. Condition: Employee’s time is tracked through the use of day sheets in which employees track their time by service code in 6-minute increments. Day sheets are used to complete weekly timesheets which are approved by supervisors. We noted two out of twenty-three daysheets selected for Medicaid had more program minutes than what was reported on the employee’s approved time sheet. Context/Cause: The day sheets included more program time than was included on the employee’s approved timesheet. We noted the above condition in two out of twenty-three day sheets selected for Medicaid. Effects: Inaccurate reporting of time coded to programs could affect the total federal and state reimbursement for the program. Recommendation: We recommend that the County implements a review control over weekly timesheets to ensure the timesheets include all program time coded on the daysheets. Auditee’s Response: We concur with the finding.