Finding 1177827 (2025-004)

2025-004: U.S. Department of Treasury COVID-19, Coronavirus State and Local Fiscal Recovery Fund (CSLFRF), 21.027 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all awards passed through U.S. Department of Treasury. Criteria: The OMB Compliance Supplement requires that reports submitted to the federal awarding agency include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Washoe County must submit quarterly Project and Expenditure Reports that contain CSLFRF costs incurred during the covered period to the Treasury Office of Inspector General. Critical information includes: • Current period obligation • Cumulative obligation • Current period expenditure • Cumulative expenditure • Revenue loss calculation validation • Capital expenditures – quantifiable objective criteria: The recipient has the required written justification in their grant file if the total of the capital expenditures costs in a project is greater than $1 million and less than $10 million; or, the recipient submitted the required justification to Treasury if (1) a project has total capital expenditures enumerated by Treasury in the Final Rule; or (2) the total of a projects capital expenditures costs is greater than $1 million for capital expenditures not enumerated by Treasury in the Final Rule. Condition: The Office of the County Manager did not have adequate internal controls to ensure reporting requirements were met. For two of the quarterly reports selected, information reported did not have underlying support that tied to the reported amounts for current period expenditures and cumulative expenditures. Cause: The Office of the County Manager did not have adequate internal controls to ensure proper documentation was maintained for reporting requirements. Effect: Amounts reported to the Department of Treasury for program expenditures may not agree to underlying support. Questioned Costs: None. Context/Sampling: A nonstatistical sample of two out of four quarterly reports were selected for testing. Repeat Finding from Prior Year(s): Yes, prior year finding 2024-005. Recommendation: We recommend the Office of the County Manager enhance internal controls to ensure appropriate documentation to support reporting is maintained. Views of Responsible Officials: Management agrees with the finding.