Finding Text
PASS THROUGH GRANTOR: Direct Grant; Oklahoma Department of Transportation
FEDERAL AGENCY: U.S. Department of Commerce; U.S. Department of Transportation
ASSISTANCE LISTING: 11.300 and 20.205
FEDERAL PROGRAM NAME: Investment for Public Works and Economic Development Facilities
and Highway Planning and Construction
FEDERAL AWARD NUMBER: ERSTP 262C(075), ERSTP 266C(076), ERSTP 266C(077), and
ERSTP 266C (082))
FEDERAL AWARD YEAR: 2020
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Costs Principles;
Matching; Period of Performance, Procurement and Suspension and Debarment, Reporting; and Special
Tests and Provisions.
QUESTIONED COSTS: $-0-
Condition: Through the process of gaining an understanding of the County’s internal control structure for
federal programs, it was noted that county-wide internal controls regarding Control Environment, Risk
Assessment, Information and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the
County complies with grant requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements and loss of federal
funds.
Recommendation: OSAI recommends that the County design and implement a system of internal controls
to ensure compliance with 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.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in
part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be
achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.04
states in part:
Components, Principles, and Attributes
Control Environment - The foundation for an internal control system. It provides the
discipline and structure to help an entity achieve its objectives.
Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives.
This assessment provides the basis for developing appropriate risk responses.
Information and Communication - The quality information management and personnel
communicate and use to support the internal control system.
Monitoring - Activities management establishes and operates to assess the quality of
performance over time and promptly resolve the findings of audits and other reviews.
Furthermore, 2 CFR § 200.303 Internal Controls (a) 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).