Finding Text
Federal Agency: U.S. Department of Transportation
Federal Program Name: Highway Planning and Construction
Assistance Listing Number: 20.205
Pass-Through Agency: Minnesota Department of Transportation
Pass-Through Numbers: 034-070-010
Federal Award Identification Number and Year: 034-070-010, 2023
Compliance Requirement Affected: Reporting
Award Period: Year Ending December 31, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: In September 2023, the county requested reimbursement for project costs totaling $221,902 for expenditures incurred during 2020.
Questioned Costs: None.
Context: During our testing of reports submitted in 2023, it was noted the County has not submitted reimbursement requests timely.
Cause: The County does not have policies or procedures in place to ensure reimbursement requests are submitted timely after costs are incurred.
Effect: By submitting untimely reimbursement requests, the County is not receiving funds it is owed in a timely manner, which has the potential to cause cash flow shortages. It also increases the likelihood that federal expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) are not accurate, causing the potential of the SEFA to be materially misstated.
Repeat Finding: Yes, Finding 2022-004.
Recommendation: We recommend the County review internal controls currently in place and design and implement procedures to request reimbursements timelier and to submit requests for reimbursements on at least a quarterly basis.
Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to ensure timely submission of reimbursement requests.