Finding Text
2024-002 – IMPROPER REPORTING OF EXPENDITURES - ALN 21.027 – OTHER NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY FINDING TYPE: OTHER NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY Finding 2024-002 Federal Program: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Year(s): SLFRP5402, 2024 Federal Agency: U.S. Department of Treasury Pass Through Agency: North Dakota State Treasurer Office Questioned Cost: $0 Condition Morton County did not properly report expenditures on the March 31, 2024, Project and Expenditure Report for the Coronavirus State and Local Fiscal Recovery Funds program. The total cumulative expenditures were understated by $233,268. Context As stated in the SLFRF Compliance and Reporting Guidance for counties allocated less than $10 million with a population below 250,000 residents such as Morton County, "the initial Project and Expenditure Report covered the period from March 3, 2021 to March 31, 2022 and was required to be submitted to Treasury by April 30, 2022. The subsequent annual reports will cover one calendar year and must be submitted to Treasury by April 30 each year." Therefore, each year after March 31, 2022, Morton County must then submit an annual P&E report for the period covering April 1 202X - March 31, 202Y. Morton County did submit the 2024 (period covering April 2023 - March 31, 2024) report by April 30, 2024, but did not properly include 6 expenses that were incurred between January 2024 - March 2024, totaling $233,268 on the 2024 P&E report. Effect The amounts reported as cumulative expenditures on the March 31, 2024, Project and Expenditure Report were inaccurate. Cause Morton County did not ensure that all expenditures were included when completing reporting for the March 31, 2024 Project and Expenditure Report. The County identified the misstatement after the P&E Report had been submitted. As Treasury does not allow revisions to submitted reports, the County was unable to amend the inaccurate report. Criteria Page 19 of the Coronavirus State and Local Fiscal Recovery Funds: Project and Expenditure Report User Guide Version 12 (September 30, 2024) states: • An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). • 2 CFR 200.303 states that 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. Repeat Finding No. Recommendation We recommend Morton County develop a review process that includes reconciling SLFRF expenditures to supporting documentation prior to preparing and submitting the P&E Report. Strengthening review steps will help ensure accurate reporting in accordance with Treasury and Uniform Guidance requirements. Morton County’s Response See Corrective Action Plan.