Audit 405714

Information on the Federal Program: Hazard Mitigation Grant, Assistance Listing Number 97.039, U.S. Department of Homeland Security, passed through Georgia Emergency Management & Homeland Security Agency. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Section 200.303 requires non-Federal entities to establish and maintain effective internal control over Federal awards, providing reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. Furthermore, the specific grant agreement and 2 CFR 200.328 require the timely and accurate submission of periodic financial and performance reports. Condition: During our testing of the County's reporting compliance for the Hazard Mitigation Grant in fiscal year 2025, we noted the following exceptions: • Late Submission: The 3rd Quarter report was submitted 8 days after the required grant deadline for the ALN #HMGP-440-006. • Inaccurate Interim Reporting: Project costs were not accurately reported in the quarter they were incurred. Instead of reporting costs in the appropriate quarters, the County aggregated and reported the total project costs entirely within the 4th Quarter report. Further, projects costs for November and December 2025 totaling approximately $185,000 were not included in the 4th Quarter progress report. Context/Cause: The County lacked formally documented internal procedures and adequate inter-departmental communication workflows. Consequently, the individual responsible for grant reporting did not receive the necessary invoices and financial data in a timely manner. Additionally, there was no documented secondary review process in place prior to the submission of the reports. Effects: The lack of adequate internal controls resulted in noncompliance with federal reporting requirements, specifically the late submission of a required report and the submission of inaccurate interim quarterly reports. This limits the federal granting agency's ability to accurately monitor interim project progress, financial pacing, and expenditures throughout the year. Recommendation: We recommend the County develop and implement formal, written policies and procedures to ensure all relevant financial data and invoices are routed to the reporting personnel well in advance of reporting deadlines. Management should establish a secondary review and approval process by a supervisor or separate qualified individual before any grant reports are submitted to ensure accuracy and timeliness. Finally, training should be provided to all relevant staff regarding this reporting workflow. Auditee’s Response: We concur with the finding. The County has implemented additional internal controls, including a workflow for sharing invoices during 2025 when it was discovered that the grant reporting was not done properly. The County also adopted a new grant policy in March 2026 to provide additional levels of review from the grant application process through closeout of a grant. This further ensures accurate and timely reporting going forward.