Finding 1056960 (2021-002)

Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition Management did not have sufficiently designed internal controls to review the completeness and accuracy of the expenditure schedule for the Coronavirus Relief Fund (CRF) for the year ended June 30, 2021. Management did not retain audit evidence of its internal controls over its review and approval of supporting documentation of the expenditures. Cause Management designed a process to accumulate and review COVID-19 expenditures. However, due to the various COVID-19 programs, the expenditures were segregated for different federal program reimbursements. Based on the timing of the other federal program requests, COVID-19 expenditures were modified based on the allowability provisions related to each program. As a result, management prepared various versions of the expenditure schedules for the CRF. Management’s controls over the review of the completeness and accuracy of the final CRF expenditure schedule, including reconciliation to the Schedule of Expenditures of Federal Awards (the Schedule) and review of duplication of benefits within the other federal program reimbursements, was not sufficiently designed to identify errors within the populations. Effect or potential effect A lack of review of the completeness and accuracy of the CRF expenditure schedule could result in a expenditures being reimbursed by other sources. The CRF expenditure schedule was not complete and accuracy and therefore, did not agree to the Schedule. The CRF expenditure schedule included purchase order information and did not include final invoice and related payments. As such, the expenditures were overstated from what was recorded in the general ledger. Questioned costs None. Context The CRF expenditure schedule included COVID-19 related expenditures for the periods July 1, 2020 through June 30, 2021. The expenditure schedule was revised during the audit as Management identified expenditures that were targeted for reimbursement by other federal sources. As a result, various errors were identified within the populations including lack of agreement to the Schedule and amounts that did not result in payments. The total expenditure schedule included $37,362,139 of CRF expenditures. This exceeded the expenditures reported on the Schedule and the grant approved amounts for the Authority. As such, there were no questioned costs identified as part of our testing. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that Management develop and implement effective internal controls to ensure that expenditures are reviewed for completeness and accuracy to ensure that information is reported appropriately, including on the Schedule for Uniform Guidance compliance purposes. View of responsible officials There is no disagreement with the audit finding.