Audit 402796

3. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS U.S. Department of Treasury Finding Reference: 2024-001 American Rescue Plan Act (ARPA) COVID 19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) (Assistance Listing # 21.027) Compliance Requirement: Reporting Condition The County did not fully comply with U.S. Department of Treasury SLFRF reporting requirements for the period ended December 31, 2024. Specifically, the County's Project and Expenditure Report submitted through the Treasury Reporting Portal was incomplete and/or inaccurate. Noted exception included: • Inaccurate reporting of obligated and expended amounts for one or more SLFRF projects. As a result, the SLFRF report submitted was not complete, accurate, or fully supported as required. Criteria Recipients of SLFRF funds are required to submit complete, accurate and timely Project and Expenditure Reports in accordance with U.S. Department of Treasury guidance and the Uniform Guidance. Reporting requirements include: • Accurate reporting of obligations and expenditures by project and expenditure category. • Submission of all required data elements prescribed by Treasury. • Retention of documentation is sufficient to support reported financial and programmatic information. Cause The deficiency was caused by weakness in internal controls over SLFRF reporting, including: • Inadequate reconciliation between the general ledger and amounts reported in the Treasury portal. • Lack of supervisory review to verify completeness and accuracy of reports prior to submission. American Rescue Plan Act (ARPA) COVID 19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) (Assistance Listing # 21.027) Compliance Requirement: Reporting Effect Due to these control deficiencies, the County submitted SLFRF reports that did not fully comply with Treasury reporting requirements. This condition increases the risk that Treasury may require corrected filings, impose additional oversight, or delay approval of future funding. Because SLFRF reporting is a direct and material compliance requirement, the failure to submit complete and accurate reports constitutes a significant deficiency. Recommendation We recommend that the County: 1) Establish and document formal SLFRF reporting policies and procedures. 2) Implement a reconciliation process between accounting records and reported SLFRF data. 3) Require supervisory review and approval of all SLFRF submissions prior to reporting to Treasury. 4) Provide ongoing training to staff responsible for SLFRF compliance and reporting. 5) Maintain complete and organized documentation to support all reported obligations and expenditures. Views of Responsible Officials Management acknowledges the findings and agrees that improvements are needed in the State and Local Fiscal Recovery Funds (SLFRF) reporting process. To address this matter, management has taken steps to strengthen internal controls over SLFRF reporting. These actions include enhancing reconciliation procedures between the accounting records and amounts reported to the Treasury reporting portal and implementing an additional level of supervisory review prior to report submission.