Audit 403534

Finding 2025-004: MONITORING - CFDA# 21.027- STATE AND LOCAL FISCAL RECOVERY FUNDS Program Information: The purpose to the States and local fiscal recovery funds is to provide providing funds to eligible employers that have eligible workers; providing government services, to the extent of the reduction of revenue due to COVID-19 relative to revenues collected in the most recent full fiscal year of the State, territorial, or tribal government; or making necessary investments in water, sewer, or broadband infrastructure (such as remediating lead pipes or installing broadband infrastructure). Providing emergency relief from natural disasters or their negative economic impacts. Funding certain eligible Surface Transportation projects specified in the 2023 CAA. Repeat Finding from prior year: NA – prior year was not audited Condition: The District did not have a monitoring process in place to identify and ensure that the associated compliance requirements were met for reporting in accordance with the federal compliance supplement for the state and local fiscal recovery funds. The District relied on various vendors to meet the compliance requirements and did not obtain documentation throughout the expenditure process that the compliance requirements were met. Criteria: As part of the grant the federal granting agency outlined specific compliance areas that were required to be met as a condition of the grant. Context: The District relied on the engineering firm to perform all the compliance duties associated with the grant and did not monitor or retain any documentation related to the compliance being met. In some cases the District board and accountant were unaware of what compliance requirements were even required. Cause: The District was unaware of the certain compliance requirements associated with the grant and did not monitor the completion of the procurement, and reporting requirements required for the compliance of the grant. Effect: During the audit we were provided information from the engineer for most of the single audit testing and no major issues were noted. The District should have been aware of the requirements and had documentation on hand to show the specific compliance requirements were met. Additionally, the compliance supplement for the grant clearly states the requirements for both procurement and reporting to maintain compliance with the grant. The board did follow an associated procurement policy including public notice, bid solicitation, and review which was provided by the engineer upon request. Questioned Cost: NA Recommendation: District personnel need to educate themselves with the requirements of the grants prior to taking any money and develop a system of internal control to monitor that these compliance requirements are met. Items like a formalized procurement policy also aids in establishing a clear practice for maintaining grant compliance and is also required in some cases when federal funds are expended.