Finding 1079518 (2022-004)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2024-10-17

AI Summary

  • Core Issue: The County's schedule of expenditures of federal awards (SEFA) contained significant errors and omissions, failing to accurately report federal expenditures for the audit period.
  • Impacted Requirements: The SEFA did not comply with Title 2 U.S. Code of Federal Regulations Part 200.510(b), lacking necessary details like program identification, pass-through entity information, and total amounts to subrecipients.
  • Recommended Follow-up: Implement internal controls for SEFA preparation, including reconciliation with accounting records and a review process for accuracy to ensure compliance in future reports.

Finding Text

Federal Grantor: All Programs Pass-through Grantor: All Programs Federal Assistance Listing No.: All Programs Program Title: All Programs Criteria: Title 2 U.S. Code of Federal Regulations Part 200.510(b) requires auditees to prepare a schedule of expenditures of federal awards which must report total federal awards expended during the audit period. At a minimum, the schedule must include: expenditures by individual program, program title and assistance listing number, programs required to be identified as part of a cluster, name of the pass-through entity and identifying number assigned by the pass-through entity for awards not received directly from the federal government, and the total amount provided to subrecipients from each federal program. Condition: The schedule of expenditures of federal awards (SEFA) reported by the County in the annual budget documents contained errors in amounts of federal expenditures reported. Additionally, the schedule did not include the identification of programs required to be part of a cluster, names of pass-through entities, identifying numbers assigned by the pass-through entities, or total amounts provided to subrecipients for the applicable programs. Discrepancies in amounts reported on the SEFA and amounts supported by underlying accounting records are summarized as follows: Furthermore, the SEFA prepared by the County does not indicate the amount of awards passed through to subrecipients. The County reported total expenditures of $200,942 under assistance listing number 10.665 - Schools and Roads - Grants to States. Of this total, $86,218 of this amount was expended under assistance listing number 15.226 - Payments in Lieu of Taxes and $61,035 was not expended at all during the fiscal year. The County also failed to report total funds remitted to local school districts. Additionally, the County failed to identify the Forest Service Schools and Roads Cluster on the SEFA. $46,246 of funds expended under this program was disbursed to schools, however, these awards to subrecipients were not reported on the SEFA. The County omitted funds of $60,279 expended under assistance listing number 15.438 - National Forest Acquired Lands, including $45,209 of funds remitted to local schools under the same program. The County inaccurately reported expenditures of $5,109,146 of assistance listing number 21.027 - COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Underlying accounting records support actual expenditures of $3,231,069. The County inaccurately reported expenditures of $152,009 of assistance listing number 97.036 - Disaster Grants - Public Assistance funds. This balance reported represents reimbursements received for funds expended in previous years. The County incurred no expenditures under this grant program in the current year. Cause: The County has not implemented a proper system of internal control over SEFA preparation, such as a reconciliation to underlying accounting records or having a separate individual review the SEFA for clerical accuracy after it has been prepared. Reasons for discrepancies varied. Effect: The SEFA presented for the audit did not accurately reflect the County's actual expenditures of federal awards for the year ended December 31, 2022. Recommendation: We recommend that the County implement internal controls to ensure that the SEFA completely and accurately states the expenditures of federal awards of the County each year, such as performing a reconciliation between the SEFA and underlying accounting records. Federal reimbursement grants should be reported on the SEFA based on reimbursable expenditures made during the year. Management's Response: Pulaski County will review the recommendations as presented and work to adjust internal controls to prepare SEFA information in accordance with the recommendations of the auditor.

Categories

Subrecipient Monitoring Reporting Cash Management

Other Findings in this Audit

  • 503076 2022-004
    Significant Deficiency Repeat
  • 503077 2022-005
    Significant Deficiency
  • 1079519 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $3.23M
15.226 Payments in Lieu of Taxes $86,218
10.665 Schools and Roads - Grants to States $61,661
15.438 National Forest Acquired Lands $60,279
93.563 Child Support Enforcement $34,112
16.575 Crime Victim Assistance $10,691
97.042 Emergency Management Performance Grants $9,020
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $2,500
20.616 National Priority Safety Programs $166