SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Whitman County January 1, 2022 through December 31, 2022 2022-001 The County lacked adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 ? COVID 19 ? Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes Description of Condition In 2022, the County spent $6,428,673 in federal funding from the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). This program gives funding to respond to the COVID-19 pandemic?s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer, or broadband infrastructure. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding various grant requirements and monitoring the effectiveness of established program controls. Federal requirements prohibit grant recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred, or otherwise excluded. The County may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration?s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County?s controls were ineffective for ensuring that it verified all parties receiving $25,000 or more in federal funds were not suspended or debarred. During 2022, the County paid one contractor $26,713 in federal funds, and did not verify the contractor was not suspended or debarred before entering into the contract. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. The issue was reported as a finding in the prior audit. Cause of Condition County staff responsible for managing this program did not know about the suspension and debarment requirement until the fiscal year 2021 audit was completed in September 2022. The County implemented corrective action measures, but the purchase applicable to this requirement occurred before the prior audit was completed. Effect of Condition Without adequate internal controls, the County increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. The County subsequently verified the contractor was not suspended or debarred. Therefore, we are not questioning costs. Recommendation We recommend the County strengthen internal controls to ensure that all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into the contract, and maintain documentation demonstrating compliance with this federal requirement. County?s Response This is the second year in a row the County has received this finding. The 2021 finding was not brought to the attention of the County until early fall 2022 thus, a correction could not be made to the 2022 work that had already happened thus the finding had to be reissued for the 2022 financial year as well. The Counties response is the same as it was for the 2021 financial year: The County understands the importance of following 2 CFR 200, Uniform Guidance. In this situation, a County employee who was unfamiliar with the administration of Federal grants was responsible for the accounting of the SLRF (ARPA) fund (due to an extreme shortage of staff at the time). While this employee verified that all entities receiving the funds were in good standing with Washington State and were, indeed, valid businesses; verification from the federal websites for suspension and debarment was mistakenly missed. After the County was made aware of this issue, it did utilize the federal websites and fortunately, all businesses were clear of suspension and debarment, so they were eligible for federal funding. Going forward, the Finance staff will train employees who are new to administering a federal grant, ensuring that all requirements are met. Additionally, the County has now discussed this matter with all of the department accounting liaisons and the process for correct debarment verification is now included in the County?s Grant Policies and Procedures. Auditor?s Remarks We thank the County for its cooperation throughout the audit and the steps it is taking to address these concerns. We will review the status of the County?s corrective action during our next 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.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Whitman County January 1, 2022 through December 31, 2022 2022-001 The County lacked adequate internal controls for ensuring compliance with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 ? COVID 19 ? Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes Description of Condition In 2022, the County spent $6,428,673 in federal funding from the Coronavirus State and Local Fiscal Recovery Funds (SLFRF). This program gives funding to respond to the COVID-19 pandemic?s negative effects on public health and the economy, provide premium pay to essential workers during the pandemic, provide government services to the extent COVID-19 caused a reduction in revenues collected, and make necessary investments in water, sewer, or broadband infrastructure. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding various grant requirements and monitoring the effectiveness of established program controls. Federal requirements prohibit grant recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the County enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred, or otherwise excluded. The County may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration?s System for Award Management at SAM.gov. The County must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Our audit found the County?s controls were ineffective for ensuring that it verified all parties receiving $25,000 or more in federal funds were not suspended or debarred. During 2022, the County paid one contractor $26,713 in federal funds, and did not verify the contractor was not suspended or debarred before entering into the contract. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. The issue was reported as a finding in the prior audit. Cause of Condition County staff responsible for managing this program did not know about the suspension and debarment requirement until the fiscal year 2021 audit was completed in September 2022. The County implemented corrective action measures, but the purchase applicable to this requirement occurred before the prior audit was completed. Effect of Condition Without adequate internal controls, the County increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any payments the County made to an ineligible party would be unallowable, and the federal agency could potentially recover them. The County subsequently verified the contractor was not suspended or debarred. Therefore, we are not questioning costs. Recommendation We recommend the County strengthen internal controls to ensure that all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into the contract, and maintain documentation demonstrating compliance with this federal requirement. County?s Response This is the second year in a row the County has received this finding. The 2021 finding was not brought to the attention of the County until early fall 2022 thus, a correction could not be made to the 2022 work that had already happened thus the finding had to be reissued for the 2022 financial year as well. The Counties response is the same as it was for the 2021 financial year: The County understands the importance of following 2 CFR 200, Uniform Guidance. In this situation, a County employee who was unfamiliar with the administration of Federal grants was responsible for the accounting of the SLRF (ARPA) fund (due to an extreme shortage of staff at the time). While this employee verified that all entities receiving the funds were in good standing with Washington State and were, indeed, valid businesses; verification from the federal websites for suspension and debarment was mistakenly missed. After the County was made aware of this issue, it did utilize the federal websites and fortunately, all businesses were clear of suspension and debarment, so they were eligible for federal funding. Going forward, the Finance staff will train employees who are new to administering a federal grant, ensuring that all requirements are met. Additionally, the County has now discussed this matter with all of the department accounting liaisons and the process for correct debarment verification is now included in the County?s Grant Policies and Procedures. Auditor?s Remarks We thank the County for its cooperation throughout the audit and the steps it is taking to address these concerns. We will review the status of the County?s corrective action during our next 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.