Finding Text
Condition: County-wide internal 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 resulted in noncompliance with grant requirements and could result in loss of federal funds to the County. Management Response: Chairman of the Board of County Commissioners: The Board acknowledges the recommendation to formalize internal control documentation consistent with GAO Green Book standards. While internal controls have been operationally in practice, documentation has not been consolidated into a single formally adopted policy reflecting the federal framework language referenced in the audit. • A comprehensive written internal control policy will be drafted aligning with GAO Green Book principles. • The policy will incorporate revenue, disbursement, purchasing, monitoring, and documentation controls. • The policy will be reviewed by legal counsel prior to formal adoption. • An annual review process will be implemented to ensure continued compliance with federal standards. • Prior to initiation of any federally funded project, relevant county personnel will be formally briefed on applicable federal requirements. • Upon completion of federally funded projects, an internal review will be conducted to verify that required documentation is complete and that applicable regulations were followed. No questioned costs were identified in connection with these findings. County Clerk: Policies and procedures for federal programs will be included in the employee handbook. Each office will communicate with the County Clerk and Treasurer when federal funds have been awarded to ensure proper procedures are followed. County Treasurer: The Treasurer will work with the other County Officials on gaining a better understanding of requirements for this program and will work on implementing policies and procedures to ensure compliance with grant requirements. Recommendation: OSAI recommends that the County design and implement a system of internal controls to ensure compliance with grant requirements 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.