Finding Text
Improve Internal Controls Over Reporting Federal Program(s) Information Federal Agency: U.S. Department of the Treasury Award Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2022 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement 2 CFR 200.303 requires the County to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. Per U.S. Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds: Compliance and Reporting Guidance, recipients are required to accurately report project-level information, including the breakdown of expenditures by individual project, and to avoid duplicative or misclassified reporting of expenditures across reporting periods. Condition and Context During our audit, it was determined that the County prepared and submitted its quarterly performance and evaluation reports to Treasury within the required timeline. However, there is no documented review of the project and expenditure reports by an individual that is not involved with preparing the reports. Additionally, key line items, specifically current period expenditures and total cumulative expenditures, included on the project and expenditure reports for quarters 2 and 4 of 2022 (April-June and October-December) did not agree to the general ledger, as required by the terms of the grant agreement. Cause The County’s internal controls over federal award reporting did not ensure expenditures were accurately reported. Effect or Potential Effect Inaccurate reporting of project-level and current period expenditure information increases the risk of noncompliance with federal reporting requirements and impairs the transparency and oversight expected by the Treasury. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The County should address the weakness in internal controls noted above by requiring tow individuals to be involved in preparing and reviewing reports submitted to federal agencies to ensure the reports are complete and accurate. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.