Assistance Listing Number, Federal Agency, and Program Name - ALN 14.218, U.S. Department of Housing and Urban Development, Entitlement Grants Cluster (CDBG), Community Development Block Grants/Entitlement Grants Federal Award Identification Number and Year - All grants listed on SEFA Pass through Entity - Not applicable Finding Type - Material weakness Repeat Finding - No Criteria - Per 24 CFR Section 570.603, grantees must adhere to the labor standards applicable to non volunteer labor per 42 USC 53110 when rehabilitating residential property that contains no fewer than eight units, which includes ensuring prevailing wage rates are being used. Additionally, per 2 CFR Section 200.303, grantees must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The County did not have controls in place, during the year under audit, to ensure that the required certified payrolls were received and reviewed by the County. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - The County has a process in place to receive and review weekly payroll certifications from contractors and subcontractors. However, there is not a control in place to ensure that all weekly payroll certifications have been received and reviewed. Cause and Effect - While our testing indicated the County does have a process in place to receive and review the required certified payrolls, there is no control in place to verify all required payrolls are received and reviewed. As a result, there is a heightened risk related to completeness of the certified payrolls. We selected a sample of 40 expected certified payrolls from throughout the year, noting all payrolls in the sample had been received and reviewed. Recommendation - We recommend that the County implement a control to ensure that the required certified payrolls from contractors and subcontractors are received and reviewed timely. Views of Responsible Officials and Corrective Action Plan A process will be put into place to ensure certified payrolls are received and reviewed by two staff employees.
Assistance Listing Number, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022 004 Criteria - Per 2 CFR Section 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.218, Community Development Block Grants Cluster, Community Development Block Grants Program (CDBG) Federal Award Identification Number and Year - B-18-UC-26-002 (2018), B-19-UC-26-002 (2019), B-20-UC-26-002 (2020), B-21-UC-26-002 (2021), B-22-UC-26-002 (2022) Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes, 2022-007 Criteria - The Federal Funding Accountability and Transparency Act (FFATA), as amended by 6202 of Public Law 110-252, requires a prime grant awardee to report its subgrants using the FFATA Subaward Reporting System (FSRS) tool. The prime recipient will have until the end of the month plus one additional month after an award or subaward is obligated to fulfill the reporting requirement. Condition - The County did not file the required FFATA reports for CDBG subrecipients timely. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - The following table summarizes the transactions examined and the noncompliance identified for subawards obligated during fiscal year 2023, for which the FFATA report was not filed timely: Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 3 0 3 0 0 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $249,859 $0 $249,859 $0 $0 Cause and Effect The County’s processes did not properly identify the FFATA filing requirements and, as a result, failed to file any of the required FFATA reports timely. Recommendation The County should implement controls to ensure that required reports are filed in a timely manner. Views of Responsible Officials and Corrective Action Plan - FFATA was brought up to date for prior years. The actual due date of the report was not known. Notes regarding the due date of the annual report have been made indicating to file 30 days within the approval of Subrecipient budgets.
Assistance Listing Number, Federal Agency, and Program Name - ALN 66.458, U.S. Environment Protection Agency Capitalization Grants for Clean Water State Revolving Funds (CWSRF) Federal Award Identification Number and Year - Project Number 5834 01 (2023) Pass through Entity - Michigan Department Environment, Great Lakes and Energy Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must prepare appropriate financial statements, including the schedule of expenditures of federal awards, in accordance with 200.510 financial statements. Per 2 CFR 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502 basis for determining federal awards expended. Condition - Controls in place were not adequate to ensure the schedule of federal expenditures was complete and accurate. If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - The County did not initially include the funds received through the Capitalization Grants for Clean Water State Revolving Funds. Cause and Effect - The County did not have a process in place to identify all potential sources of federal funding received during the year, resulting in the SEFA being incomplete for the year ended September 30, 2023. Upon discovery of the error, the County prepared a SEFA that included the Capitalization Grants for Clean Water State Revolving Funds. This lack of controls resulted in the reissuance of the 2023 single audit. Recommendation - Management should implement controls to ensure all federal funding received is properly identified as such and included on the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding as reported. The federal funding was not received until fiscal year 2023, while expenditures were incurred prior to fiscal year 2023. The timing of events contributed to the oversight on the 2023 SEFA. The County has reeducated staff on the preparation of the SEFA in order to prevent this error from reoccurring.
Assistance Listing Number, Federal Agency, and Program Name - ALN 66.458, U.S. Environment Protection Agency Capitalization Grants for Clean Water State Revolving Funds (CWSRF) Federal Award Identification Number and Year - Project Number 5834 01 (2023) Pass through Entity - Michigan Department Environment, Great Lakes and Energy Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CRF 200.305(b)(3), when the reimbursement method is used, the pass through entity must make payment within 30 calendar days after receipt of the payment request unless the pass through entity reasonably believes the request to be improper. Condition - The County did not have controls in place to ensure the subrecipient was paid within 30 calendar days after request for reimbursement was received. Questioned Costs - None If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - The County received a request for reimbursement from the subrecipient in February 2023 but did not pay the related subrecipient invoice until April 2023. Cause and Effect - The County did not have a process in place to ensure the subrecipient was paid timely once the request for reimbursement was received, resulting in the subrecipient being paid outside the 30 calendar day requirement. Recommendation - Management should implement controls to ensure that the County is paying subrecipients timely after receiving a request for reimbursement from the subrecipient. Views of Responsible Officials and Planned Corrective Actions - Chief engineer WRC, Evans Bantios, will review department processes regarding invoice due dates and acquire approval documentation from the vendor if a payment is beyond the due date.