Finding 1073669 (2023-005)

INTERNAL CONTROL OVER SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS PREPARATION AND REVIEW Condition: The County does not have a system of internal control that would provide management with reasonable assurance that the County’s schedule of expenditures of federal awards and related disclosures are complete and presented in accordance with the cash basis of accounting. As such, management requested us to compile the trial balance from the general ledger and prepare a draft of the schedule of expenditure of federal awards, including the related note disclosures. Criteria: As described in our engagement letter, management is responsible for establishing and maintaining internal controls, including monitoring, and for the fair presentation of the schedule of expenditures of federal awards, in conformity with the cash basis of accounting. Context: The County does not have a way of tracking the federal expenditures and awards. Effect: The potential exists that a material misstatement of the schedule of expenditures of federal awards could occur and not be prevented or detected by the County’s internal control. Cause: Management does not prepare the schedule of expenditures of federal awards or track the federal expenditures to ensure all expenditures are included within the proper federal expenditure accounts. There were also some federal grant expenditures that had not been posted onto the County’s accounting program. Questioned Costs: None Repeat Finding: No Recommendation: We recommend that the County review and approve the proposed auditor adjusting entries and the adequacy of the schedule of the expenditures of federal awards disclosures prepared by the auditors among other procedures as considered necessary by management. We also recommend that the County designate an individual responsible for tracking the federal expenditures of the County. View of Officials: The County reviews the schedule of expenditures of federal awards and approves all adjustments. The County will implement procedures to track the federal expenditures of the County.