Skamania County January 1, 2022 through December 31, 2022 2022-001 The County?s internal controls were inadequate for ensuring compliance with federal requirements for suspension and debarment. Assistance Listing Number and Title: 20.615 ? E-911 Grant Program Federal Grantor Name: U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Military Department Pass-through Award/Contract Number: E21-207 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the County spent $776,219 in federal funding from the E-911 Grant program. The program awards federal funding to state and local governments to help them provide effective 911 services. Recipients may use funding to implement and operate 911 and enhanced 911 services, migrate to an IP-enabled emergency network, and operate next generation 911 services. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or making subawards to parties suspended or debarred from doing business with the federal government. Whenever the County makes subawards, enters into contracts, or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the party has not been suspended, debarred or otherwise excluded from participating in federal programs. The County can verify a party?s status by checking for exclusion records in the System for Award Management (SAM.gov), obtaining a written certification from the party, or inserting a clause into the contract stating the party is not suspended or debarred. The County must perform this verification before awarding the contract or subaward, and it must keep documentation demonstrating compliance with this federal requirement. Our audit found the County did not have controls in place to ensure staff verified one contractor paid more than $25,000 in E-911 grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition The employee responsible for managing the program does not routinely manage federal programs for the County. As a result, the employee did not have adequate experience with federal funding and did not know about the suspension and debarment verification requirement. Also, while the County took corrective action for a prior audit recommendation over suspension and debarment for another program, the contract paid with E-911 grant funds was entered into before the Couty had received this recommendation. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify the contractor was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. During our audit, the County verified the contractor was not suspended or debarred; therefore, we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them. County?s Response The County has put a clause in the generic contract for departments. There has also been training on it for all departments and we?ll continue to include it in our annual financial training. In addition, we are also looking into adding a check box for it to our contract face sheet that has to be filled out and approved by the BOCC as an additional check. Auditor?s Remarks We appreciate the County?s response and commitment to resolving this finding. We thank it for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.
Skamania County January 1, 2022 through December 31, 2022 2022-001 The County?s internal controls were inadequate for ensuring compliance with federal requirements for suspension and debarment. Assistance Listing Number and Title: 20.615 ? E-911 Grant Program Federal Grantor Name: U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Military Department Pass-through Award/Contract Number: E21-207 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the County spent $776,219 in federal funding from the E-911 Grant program. The program awards federal funding to state and local governments to help them provide effective 911 services. Recipients may use funding to implement and operate 911 and enhanced 911 services, migrate to an IP-enabled emergency network, and operate next generation 911 services. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal requirements prohibit recipients from contracting with or making subawards to parties suspended or debarred from doing business with the federal government. Whenever the County makes subawards, enters into contracts, or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the party has not been suspended, debarred or otherwise excluded from participating in federal programs. The County can verify a party?s status by checking for exclusion records in the System for Award Management (SAM.gov), obtaining a written certification from the party, or inserting a clause into the contract stating the party is not suspended or debarred. The County must perform this verification before awarding the contract or subaward, and it must keep documentation demonstrating compliance with this federal requirement. Our audit found the County did not have controls in place to ensure staff verified one contractor paid more than $25,000 in E-911 grant funds during 2022 was not suspended or debarred from participating in federal programs. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition The employee responsible for managing the program does not routinely manage federal programs for the County. As a result, the employee did not have adequate experience with federal funding and did not know about the suspension and debarment verification requirement. Also, while the County took corrective action for a prior audit recommendation over suspension and debarment for another program, the contract paid with E-911 grant funds was entered into before the Couty had received this recommendation. Effect of Condition The County did not obtain a written certification, insert a clause into the contract, or check SAM.gov to verify the contractor was not suspended or debarred before entering into the contract. Without this verification, the County increases its risk of awarding federal funds to parties that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. During our audit, the County verified the contractor was not suspended or debarred; therefore, we are not questioning costs. Recommendation We recommend the County improve its internal controls to ensure compliance with federal requirements. Specifically, we recommend the County ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them. County?s Response The County has put a clause in the generic contract for departments. There has also been training on it for all departments and we?ll continue to include it in our annual financial training. In addition, we are also looking into adding a check box for it to our contract face sheet that has to be filled out and approved by the BOCC as an additional check. Auditor?s Remarks We appreciate the County?s response and commitment to resolving this finding. We thank it for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689.