Finding 1171045 (2025-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-01-29
Audit: 384451
Organization: Karnes County (TX)

AI Summary

  • Core Issue: The County inaccurately reported CSLFRF expenditures, claiming all were completed when $587,245 remained unspent.
  • Impacted Requirements: Accurate annual reporting is essential for Treasury oversight; incorrect data can significantly affect their monitoring activities.
  • Recommended Follow-Up: Implement procedures for accurate reporting, including formal reconciliations and inter-departmental reviews before submission.

Finding Text

Finding Number: 2025-001 Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) ALN 21.027 Finding Type: Material Noncompliance with Reporting Requirements Criteria: Treasury requires accurate annual reporting of obligations and expenditures for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) to perform effective oversight. Condition and Context: The County incorrectly reported all CSLFRF expenditures as completed as of the March 31, 2025 expenditure report. However, $587,245 had not yet been spent, a material balance to the grant. The reporting was also finalized. Cause: Misunderstanding of reporting status requirements and lack of coordination with other County departments to review data submitted in the report. Effect or Potential Effect: Treasury did not receive accurate information regarding project completion status. Because of the key obligation and expenditure dates in the grant, the Treasury received information that could cause a significant difference in their oversight activities. Questioned Cost: N/A. Recommendation: We recommend that the entity implement procedures to ensure accurate expenditure reporting on grants. This may include formal reconciliation of reported amounts to accounting records and other department review before report submission. Views of Responsible Official: The Treasurer concurs with the audit finding. The Treasurer confused the concepts of obligations (which was complete as of the report date) and expenditures (which were not complete as of the report date). Future grant reports will be supplemented with information from the accounting system to support actual expenditures reported.

Corrective Action Plan

Finding Number: 2025-001 Federal Program: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) ALN 21.027 Finding Type: Material Noncompliance with Reporting Requirements The entity acknowledges that the CSLFRF report for the period ended March 31, 2025 inaccurately reported that all expenditures had been completed when a portion of the award remained unspent. Management has evaluated the circumstances and determined that the error resulted from a misunderstanding of report finalization requirements. To address this issue, management will implement enhanced review and approval procedures over grant expenditure reporting to ensure that cumulative expenditures and expenditure status are accurately reported prior to submission and finalization. These procedures will include reconciliation of reported amounts to the general ledger and interagency review to confirm that all funds have been expended before designating any report as final. Responsible Official: Treasurer Anticipated Completion Date: Implemented immediately and applicable to all future expenditure reporting.

Categories

Reporting Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $1.27M
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $130,735
16.922 EQUITABLE SHARING PROGRAM $77,272
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $25,745