Finding Text
Criteria: Title 2 U.S. Code of Federal Regulations Part 200 requires recipients of Federal awards to comply with laws, regulations, and provisions of contract or grant agreements related to each of its Federal programs. Participants in the COVID-19 Coronavirus State and Local Fiscal Recovery Funds program were required to complete financial, performance, and compliance reporting as outlined in Part 2 of the SLFRF Compliance and Reporting Guide, issued by the U.S. Department of the Treasury. The County was required to appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. Condition: The County elected to obligate funds for the provision of government services in accordance with the $10 million standard allowance exemption as outlined in the 2022 Final Rule guidance; the standard allowance provision allows a recipient to reimburse itself for eligible past expenditures incurred on or after March 3, 2021 through the date of the standard allowance election. COVID-19 Coronavirus State and Local Fiscal Recovery Funds are considered obligated and expended on the date that the Commission authorizes the expenditures and cash is disbursed for the authorized use. Accordingly, the County expended $282,366 between April 1, 2022 and March 31, 2023 which was required to be reported on the Project and Expenditure Report due April 30, 2023. The County's annual report for the applicable reporting period, which was timely filed on April 28, 2023, reported $17,936. Condition: Management has not implemented internal controls related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). During our audit we noted the SEFA contained errors. Cause: Oversight. Effect: The Project and Expenditure Report due by April 30, 2023, which covered the period of April 1, 2022 - March 31, 2023, was submitted with inaccurate expenditures. Total cumulative expenditures reported under the County's revenue replacement category for the covered period totaled $17,936, however, the County's underlying accounting records supported total cumulative expenditures for the covered period of $282,366, resulting in a misstatement of $234,430. Recommendation: We recommend that the County implement internal controls to ensure that the Project and Expenditure reports completely and accurately state the cumulative expenditures and current period expenditures of funds expended under the COVID-19 Coronavirus State and Local Fiscal Recovery Funds including performing a reconciliation between the reporting to be submitted and the underlying accounting records. Additionally, the County should include the omitted expenditures in the next Project and Expenditure Report submission using the procedures reflected in the U.S. Department of Treasury Project and Expenditure Report Guide, as applicable to the covered period being submitted. Management's Response: The Treasurer is preparing and reporting COVID-19 funds and will work with the County Clerk to ensure correct reporting in the future. The expected implementation date will be in the next reporting cycle of April 2024.