November XX, 2023
Office of the Secretary of State
Audits Division
255 Capitol St. NE, Suite #500
Salem, OR 97310
Plan of Action for Wheeler County, Oregon
Wheeler County, Oregon respectfully submits the following corrective action plan in response to
deficiencies reported in our audit of fiscal yea...
November XX, 2023
Office of the Secretary of State
Audits Division
255 Capitol St. NE, Suite #500
Salem, OR 97310
Plan of Action for Wheeler County, Oregon
Wheeler County, Oregon respectfully submits the following corrective action plan in response to
deficiencies reported in our audit of fiscal year ended June 30, 2023. The audit was completed by the
independent auditing firm Solutions, CPAs PC, John Day, Oregon.
The deficiencies are discussed below with the Action Plan listed for each.
1. Material Weakness – Financial Statement Preparation
Criteria: The financial statements are the responsibility of the county’s management, including the
prevention or detection of material misstatements in the presentation and disclosure of the financial
statements. Non-attest services performed by the auditor in the preparation of the financial statements
cannot be considered compensating controls.
Condition: The county engages their auditors to provide non-attest services for the preparation of its
financial statements. Although common for municipalities the size of the county, this condition represents
a control deficiency over the financial reporting process that is required to be reported under professional
standards as long as management makes all financial reporting decisions and accepts responsibility for
the content of the financial statements. However, those activities performed by the auditor are not a
substitute for, or extension of, internal controls over the preparation of the financial statements in
accordance with generally accepted accounting principles (GAAP).
Cause: The county’s accounting personnel do not possess the advanced training that would provide the
expertise necessary to prepare the financial statements and related notes in accordance with GAAP, and
therefore may not be able to prevent or detect a material misstatement in the preparation and disclosure
of the financial statements. Misstatements in financial statements may include not only misstated
financial amounts, but also the omission of disclosures required by GAAP.
Effect: Material misstatement in the preparation and disclosure of the financial statements in accordance
with GAAP may not be prevented or detected. Misstatements in financial statements include not only
misstated dollar amounts, but also the omission of disclosures required under GAAP. Recommendations: We understand that it may not be practical to acquire or allocate the internal
resources to perform all the controls necessary over financial reporting. However, management
(including the County Court) should mitigate this deficiency by keeping informed about the county’s
internal controls, performing supervisory reviews, studying the financial statements and related footnote
disclosures, and understanding its responsibility for the financial statements as a whole.
Action Plan: We understand the importance of risk management and the need to address risks in an
informed, cost-beneficial way. As a result of our cost-benefit analysis we have determined the value of
incurring the additional expense of hiring a staff person or another firm to prepare our financial
statements does not justify the cost. We accept the auditor’s recommendations and will attempt to
implement in a timely manner.
2. Material Weakness – Preparation of the Schedule of Expenditures of Federal Awards
Criteria: The schedule of expenditures of federal awards (SEFA) is the responsibility of the county’s
management, including the prevention or detection of material misstatements in the presentation and
disclosures of SEFA. Services performed in reconciling the SEFA to the trial balance during the annual
compliance audit cannot be considered compensating controls of the county.
Condition: During our reconciliation of the SEFA to the financial statements, and testing of controls, we
noted material omissions from program expenditures reported. Additionally, identification of funds
passed-thru to subrecipients were omitted from the county drafted SEFA.
Cause: The county’s system of controls over the SEFA is lacking effective controls over completeness.
Effect: Material misstatement in the preparation and disclosure of the financial statements in accordance
with GAAP may not be prevented or detected. Misstatements in financial statements include not only
misstated dollar amounts, but also the omission of required disclosures.
Recommendations: We recommend the county develop further control procedures over drafting the SEFA
to address completeness. We recommend the county develop a system of tracking federal awards and
related compliance requirements to assist in accumulating information to prepare the SEFA.
This deficiency is related specifically to the preparation of the SEFA and does not reflect on controls over
compliance or transactional controls.
Action Plan: 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.
3. Significant Deficiency – Internal Control over Compliance with Federal Program
Requirements
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.
Recommendations: 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.
Action Plan: 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.