Finding Text
Finding 2022-007 – Lack of County-Wide Controls Over Major Federal Programs – Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Repeat Finding – 2017-013, 2018-004, 2020- 006) PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management FEDERAL AGENCY: U.S. Department of Homeland Security ASSISTANCE LISTING: 97.036 FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters) FEDERAL AWARD NUMBER: DR-4438, DR-4315, and DR-4575 FEDERAL AWARD YEAR: 2022 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions QUESTIONED COSTS: $-0- Condition: County-wide 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 with grant requirements. Recommendation: OSAI recommends that the County design and implement a system of internal controls to ensure compliance with grant requirements. Management Response: Chairman of the Board of County Commissioners: The County will include all federal grant discussion in our Officers’ meetings so that all Elected Officials are aware. We will discuss the Control Environment, Risk Assessment, Information and Communication, and Monitoring for all federal grants. District 1 County Commissioner: Over the years, the Board of Commissioners has made multiple attempts to convene county-wide officer meetings. These efforts have met resistance due to concerns that such meetings would constitute “public meetings” and that records of the discussions would be maintained. The Commissioners do not view this as problematic. However, auditors have also suggested holding meetings with only one commissioner present in order to avoid public meeting requirements. It is my opinion that meaningful progress will remain limited until county officers are willing to meet with all three commissioners in an open, public setting. I remain open to that possibility. There are numerous external controls associated with federal funding, including oversight from both state and federal agencies. Internally, we have encountered resistance from certain county officials who are less familiar with the scope and structure of large federal projects. This included a former official who repeatedly asserted that “$400,000.00 is missing,” despite being shown conclusively that no funds were missing. That official resigned shortly thereafter. Incidents of this nature have made it more difficult to engage in productive discussions regarding internal controls. Nonetheless, I remain willing to meet openly and discuss internal controls in a transparent and constructive manner. Auditor Response: Uniform Guidance and GAO Standards outline establishing an effective system of internal controls over federal grant programs for the County to follow. Elected Officials meeting each quarter in an open meeting to discuss Control Environment, Risk Assessment, and Monitoring would constitute good governance. 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.