Audit 5940

WHEELER COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2023 This deficiency is related specifically to the preparation of the SEFA and does not reflect on controls over compliance or transactional controls. Responsible Official’s Response: We understand the importance of risk management and the need to address risks in an informed, cost-beneficial way. We have addressed this finding with plans to develop controls over preparing the SEFA. Specifically, we intend to track compliance requirements for all grants in a database to address internal control issues over completeness. We also intend to implement review and approval controls over the county drafted SEFA. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS CURRENT YEAR 2023-003 Significant Deficiency in Internal Control over Compliance Federal Awarding Agency: U.S. Department of Agriculture Federal Program title and CFDA number: Forest Service Schools and Roads Cluster, CFDA #10.666 Compliance Requirements applicable to findings: Earmarking, Reporting, and Special Tests and Provisions Findings: Significant Deficiency in internal controls over compliance of major programs. Questioned Costs: $2,203 in likely questioned costs. Criteria or specific requirement (including statutory, regulatory, or other citation): The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving funds under the Forest Service Schools and Roads Cluster to perform an allocation of funds between Title I, II, and II under based on county court certified allocations. In the current year, that allocation included a federal sequestration of funds that was also required to be allocated to Title I and Title III, which resulted in noncompliance with the requirements related to earmarking and with special tests and provisions. Annual certification of funds spent under Title III is also required. In the current year, that certification included funds that were included in previous certifications, which resulted in noncompliance with the requirements related to reporting. Condition and context: During our review of the allocation of 2023 funds received, we noted an error in the allocation performed by the county. Title I had an overallocation of funds by $2,203, and Title III was under allocated by the same $2,203. The reconciliation of the amounts included in the 2022 annual certification for Title III funding identified an over certification of $11,303 that had already been included in the 2021 annual certification. Questioned Costs: Actual questioned costs totaled $2,203 and consisted of amounts passed through to local schools and expended in the road department on otherwise compliant uses. Cause: There is a lack of internal control over earmarking, reporting, and special tests and provisions over allocation of Forest Service Schools and Roads funding and the annual certification. The county lacks review and approval controls over the allocation of funds and the annual certification. Effect: The effect is noncompliance with earmarking, reporting, and special tests and provisions requirements. Recommendation: It is recommended that the county implement review procedures over the annual receipt to verify amounts allocated are complete and accurate prior to posting to the general ledger. A recalculation of both the certification and a detailed review of amounts used in the annual reporting is recommended. Views of Responsible Officials and Planned Corrective Actions: The county understands and concurs with this finding. It is the intention of the county to implement a review process to be completed prior to making formal allocation and reporting of Forest Service Schools and Roads Cluster. PRIOR YEAR There were no findings or questioned costs for federal awards

WHEELER COUNTY, OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2023 This deficiency is related specifically to the preparation of the SEFA and does not reflect on controls over compliance or transactional controls. Responsible Official’s Response: We understand the importance of risk management and the need to address risks in an informed, cost-beneficial way. We have addressed this finding with plans to develop controls over preparing the SEFA. Specifically, we intend to track compliance requirements for all grants in a database to address internal control issues over completeness. We also intend to implement review and approval controls over the county drafted SEFA. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS CURRENT YEAR 2023-003 Significant Deficiency in Internal Control over Compliance Federal Awarding Agency: U.S. Department of Agriculture Federal Program title and CFDA number: Forest Service Schools and Roads Cluster, CFDA #10.666 Compliance Requirements applicable to findings: Earmarking, Reporting, and Special Tests and Provisions Findings: Significant Deficiency in internal controls over compliance of major programs. Questioned Costs: $2,203 in likely questioned costs. Criteria or specific requirement (including statutory, regulatory, or other citation): The Secure Rural Schools and Community Self-Determination Act of 2000 requires a county receiving funds under the Forest Service Schools and Roads Cluster to perform an allocation of funds between Title I, II, and II under based on county court certified allocations. In the current year, that allocation included a federal sequestration of funds that was also required to be allocated to Title I and Title III, which resulted in noncompliance with the requirements related to earmarking and with special tests and provisions. Annual certification of funds spent under Title III is also required. In the current year, that certification included funds that were included in previous certifications, which resulted in noncompliance with the requirements related to reporting. Condition and context: During our review of the allocation of 2023 funds received, we noted an error in the allocation performed by the county. Title I had an overallocation of funds by $2,203, and Title III was under allocated by the same $2,203. The reconciliation of the amounts included in the 2022 annual certification for Title III funding identified an over certification of $11,303 that had already been included in the 2021 annual certification. Questioned Costs: Actual questioned costs totaled $2,203 and consisted of amounts passed through to local schools and expended in the road department on otherwise compliant uses. Cause: There is a lack of internal control over earmarking, reporting, and special tests and provisions over allocation of Forest Service Schools and Roads funding and the annual certification. The county lacks review and approval controls over the allocation of funds and the annual certification. Effect: The effect is noncompliance with earmarking, reporting, and special tests and provisions requirements. Recommendation: It is recommended that the county implement review procedures over the annual receipt to verify amounts allocated are complete and accurate prior to posting to the general ledger. A recalculation of both the certification and a detailed review of amounts used in the annual reporting is recommended. Views of Responsible Officials and Planned Corrective Actions: The county understands and concurs with this finding. It is the intention of the county to implement a review process to be completed prior to making formal allocation and reporting of Forest Service Schools and Roads Cluster. PRIOR YEAR There were no findings or questioned costs for federal awards