Finding 1152895 (2023-003)

Finding 2023-003 AL No.: 21.027 Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Award Number/Year: 1505-0271 / 2021 Criteria: The Uniform Guidance requires that local entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with laws, regulations and program compliance requirements. The Uniform Guidance further requires auditors to obtain an understanding of the local entity's internal control over federal programs. To minimize the risk of errors, internal controls should be in place for all program compliance requirements, including the approval of expenditures by a knowledgeable individual. Condition/Context: During testing, it was noted that five of the 17 expenditures selected for testing were not reviewed by management before being processed. Our sample was not statistically valid. Cause: The County did not have procedures in place requiring the maintenance of documentation to support the review of a transaction by an independent person. Questioned Costs: None noted. Effect: Costs for activities that are specifically not allowed or are prohibited by the federal statutes, regulations, or the terms and conditions of the federal award could be processed under the grant. Recommendation: We recommend that the County implement procedures requiring the maintenance of documentation to support the review of a transaction by an independent person. Management's Response: The finance department staff will work with departmental management and fiscal staff to review current documented and/or undocumented procedures, adopting and/or updating written procedures as necessary to ensure: • All assembled reports (typically prepared by fiscal staff) are reviewed for completeness and accuracy by independent personnel (typically a department head.) • Reports be submitted on a timely basis. • Reconciliation of data on each submitted reports to the financial statements. • Reconciliation of grant period-to-date cumulative data totals to the financial statements. Additionally, the county finance team will assemble and maintain a centralized file for all county grants, requiring grant administrators (fiscal staff or department heads) to report completion dates for mandated report filings. The county finance team will also maintain a centralized data file for all county grant filings and grant documents.