Audit 399816

2024-002 - (Noncompliance) Uniform Guidance Written Policies/Procedures Federal Program: Assistance Listing #14.228 Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii, U.S. Department of Housing and Urban Development, Passed Through Pennsylvania Department of Community and Economic Development and Pennsylvania Emergency Management Agency, Pass-Through Entity Identifying Numbers: C000073444, C000075689, C000082264, C000086078, C000089804, C000080637 and PEMA-2022-007 Prior Year Finding Number: 2023-003 Criteria: The Uniform Guidance requires written policies and/or procedures in the areas of allowability of costs, cash management and subrecipient monitoring. Condition/Context: While the County has informal policies and procedures surrounding the administration of its federal programs, these policies and procedures have not been formally documented to ensure compliance with the areas of allowability of costs, cash management or subrecipient monitoring as required under the Uniform Guidance. Questioned Costs: N/A Cause: The County has not yet prepared its written policies/procedures required by the Uniform Guidance. Effect: The County is not in compliance with certain requirements of the Uniform Guidance and as such, employees do not currently have the benefit of these written policies and/or procedures to assist in managing and directing its federal award programs. Recommendation: We recommend that County management prepare the required written policies/procedures related to allowability of costs, cash management and subrecipient monitoring outlined with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to formally document the required elements of its policies and procedures pursuant to the Uniform Guidance.

2024-003 - (Noncompliance) Completion of Single Audit Federal Program: Assistance Listing #14.228 Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii, U.S. Department of Housing and Urban Development, Passed Through Pennsylvania Department of Community and Economic Development and Pennsylvania Emergency Management Agency, Pass-Through Entity Identifying Numbers: C000073444, C000075689, C000082264, C000086078, C000089804, C000080637 and PEMA-2022-007 Prior Year Finding Number: 2023-004 Criteria: Pursuant to the provisions of the Uniform Guidance, section 200.512(a), the County is required to undergo and complete its Single Audit and file the Single Audit and related Data Collection Form within 9 months of its year-end. Condition/Context: The County's December 31, 2023 Single Audit was not completed and submitted within the required time period. Questioned Costs: N/A Cause: During the period when the audit was being conducted, the County was in the process of converting its accounting system to a new product, which delayed the completion of the County's Single Audit as certain information was not readily available as anticipated in the audit schedule. Effect: The County is not in compliance with the Uniform Guidance Single Audit reporting requirements. Recommendation: We recommend that as the County gets up and running on the new accounting system, the audit be prioritized in future periods. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to better anticipate the needs and timing and availability of staff/information to complete the audit.

2024-004 - Subrecipient Monitoring - Material Weakness/Noncompliance Federal Program: Assistance Listing #14.228 Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii, U.S. Department of Housing and Urban Development, Passed Through Pennsylvania Department of Community and Economic Development and Pennsylvania Emergency Management Agency, Pass-Through Entity Identifying Numbers: C000073444, C000075689, C000082264, C000086078, C000089804, C000080637 and PEMA-2022-007 Prior Year Finding Number: 2023-005 Criteria: The Uniform Guidance outlines various requirements for pass-through entities in Section 200.331, including the following items: (a) ensuring all subawards are clearly identify to the subrecipient as a subaward and include certain required information; (b) evaluate each subrecipient's risk of noncompliance with federal statutes, regulations and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring; (c) consider imposing specific subaward conditions upon a subrecipient, if appropriate; (d) monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subaward; (e) depending on the pass-through entity's assessment of risk posed by the subrecipient, perform appropriate monitoring of the subrecipient; (f) verify that every subrecipient is audited as required by Subpart F of the Uniform Guidance; (g) consider whether the results of the subrecipient's audits, on-site reviews or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records and; (h) consider taking enforcement actions against noncompliance subrecipients as described in Uniform Guidance Section 200.338. Condition/Context: The County does not have a formal risk assessment or oversight program in place to monitor its subrecipients as required under the Uniform Guidance, including ensuring that financial information reconciles between the underlying expenditure reports and the subrecipient/County audit reports. Questioned Costs: N/A Cause: The County has not prepared or adopted the written policies / procedures required by Uniform Guidance and as such, the County personnel overseeing subrecipients did not understand their responsibilities in regards to monitoring subrecipients. Effect: The County cannot be assured that subrecipients are appropriately understanding and complying with the requirements of the funding stream passed through to them. Recommendation: We recommend that the County revisit its policies and procedures related to subrecipient monitoring and ensure that there are formal subaward agreements with all subrecipients, prepare a formal, initial, risk assessment of each potential subrecipient and document its monitoring activities of each subrecipient. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to implement these policies, procedures and activities on a prospective basis.