Finding 1177663 (2024-003)

2024-003: Noncompliance and Material Weakness in Internal Controls Over the Reporting Requirement Federal Assistance Listing Number(s): 21.027, 21.032 Program Title: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) and Local Assistance and Tribal Consistency Fund Federal Award Year: 2022-2023 Name of Federal Agency: U.S. Department of Treasury Name of pass-through entity: Direct, Colorado Department of Local Affairs, and various COVID-19 Program: Yes Federal Program: Coronavirus State and Local Fiscal Recovery Funds and Local Assistance and Tribal Consistency Fund Criteria: The OMB Compliance Supplement section L (Reporting) for the grant program requires that the County submits a project and expenditure report on a quarterly and annual basis. Condition: We judgmentally selected two of four quarterly reports and the annual report for the grant program for testing compliance and internal control over the reporting requirement. However, we were notified by management that several of the required quarterly and one annual report were not filed in a timely manner by the required deadline(s), which put the County out of compliance with the grant program requirements. As result, this noncompliance has identified that the County does not have proper internal controls related to reporting based on 2 CFR 200 Section 303. Cause: County did not have proper internal controls and processes in place to make sure that the reporting is satisfied on a timely basis. The County is out of compliance with the reporting requirement and indicates a lack of internal controls over reporting. Effect: The County is out of compliance with the reporting requirement and indicates a lack of internal controls over reporting. This may be a violation of the Federal award that may cause additional requirements or additional oversight over the grant award. Repeat Finding: Yes. Recommendation: We continue to recommend that the County re-evaluate the reporting processes over Federal awards at the County to be in compliance with the Federal requirements. In addition, we recommend that the County evaluate grant requirements including reporting and related internal controls to avoid future noncompliance. County’s new administration and finance staff have made significant progress in improving these processes in 2025 and subsequent to December 31, 2024. Corrective Action Plan: Reported on page 70.