PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management and Oklahoma Office and Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING NO: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; and Period of Performance
QUESTIONED COSTS: $731,856
Condition: The County submitted and received reimbursement for $4,244,344 in expenditures related to the COVID-19 Pandemic. After performing testwork on 100% of the County’s expenditures, $731,856 was not expended in accordance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance due to ineligible costs.
• The County was reimbursed $630,738 for payroll expenditures for the Northeast Oklahoma Enhanced 9-1-1 Trust Authority for the period of March 2020, through August 2020. The reimbursement of these funds was determined to be unallowable, as these costs were not expenditures of the County.
• The County was reimbursed $63,000 for the October 2020 payment to the Tulsa Port of Catoosa (the Port) for proposed project costs of the Port. The reimbursement of these funds was determined to be unallowable, as this cost was not an allowable cost of Rogers County.
• The County was reimbursed $24,620 for the September 2020 payment to the Rogers County Youth Services for estimated COVID related expenses of Rogers County Youth Services. The reimbursement of these funds was determined to be unallowable, as this cost was not an allowable cost of Rogers County.
• The County was reimbursed $7,821 for the September 2020 payment to the City of Claremore for advertising expenses of the City of Claremore. The reimbursement of these funds was determined to be unallowable, as this cost was not an allowable cost of Rogers County.
• The County was reimbursed $5,455 for duplicate expenses submitted between August 2020 and October 2020.
• The County was reimbursed $650 for office supplies and equipment purchased in August 2020 when actual cost of the supplies and equipment was $428 causing the County to be reimbursed $222 more than allowed.
• The County relied on the Oklahoma Office of Management and Enterprise Services to ensure that the County reimbursement request was for eligible expenditures.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure that the County has proper internal controls over federal grant expenditures and that the expenditures were for an allowable cost.
Effect of Condition: These conditions resulted in noncompliance with federal grant requirements. The County runs the risk of misappropriation of funds which could hinder the County from receiving future federal funding. Further, this could result in the repayment of funds.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program and design and implement policies and procedures to ensure compliance with all applicable grant requirements.
Management Response:
Board of County Commissioners: The BOCC is responsible for the overall fiscal concerns of the county. See OKLA. STAT. Title 19, § 345. The BOCC, with the cooperation and participation of all elected officials, reviews, develops and implements policies and procedures to create a strong internal control environment. The BOCC will work with all elected officials and with the state and local partners in each federal award to develop policies, procedures, and internal controls designed to accurately track grants, including the application process, verification, oversight, and reporting of grant requirements. These policies and procedures will be designed to identify requirements for recipients and sub-recipients of grants, ensure accurate equipment and real property management, procurement, recipient and subrecipient monitoring and reporting. Further, policies will ensure a proper understanding of all grant requirements and compliance of the same.
The BOCC engaged a third party to assist in program evaluation, determination of eligible costs, subrecipient oversight and tracking, and grant documentation and reporting. Based on the third party’s qualifications and experience, the BOCC relied upon the experience and expertise of the third party to oversee COVID-19 funds. Further, with respect to submissions to the Oklahoma Office of Management and Enterprise Services (OMES), the BOCC relied on OMES to ensure that expenses submitted for reimbursement were eligible expenses.
Criteria: 42 United States Code § 801 – Coronavirus relief fund Section 801(d) requires the States,
Tribal governments, or units of local government use the funds received to cover only those costs that (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the budget most recently approved as of March 27, 2020, for the State or government; and (3) were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.
Additionally, 2 CFR § 200.303(a) Internal Controls reads as follows:
The non-Federal entity must:
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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR § 200.403 - Factors affecting allowability costs states in relevant part,
Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
(f) not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.
(g) Be adequately documented.