Finding Text
Finding 2024-007 – Lack of County-Wide Internal Controls Over Major Federal Program – Local Assistance and Tribal Consistency Fund PASS-THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of the Treasury ASSISTANCE LISTING: 21.032 FEDERAL PROGRAM NAME: Local Assistance and Tribal Consistency Fund FEDERAL AWARD YEAR: 2024 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles, Reporting QUESTIONED COSTS: $-0- Condition: Through the process of gaining an understanding of the County’s internal control structure for federal programs, it was noted that 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: Without an adequate system of county-wide controls, there is greater risk of a breakdown in control activities which could result in unrecorded transactions, undetected errors, misappropriation of funds, and noncompliance with federal grant requirements. Recommendation: OSAI recommends the County implement a system of internal controls to ensure compliance with grant requirements. Management Response: Chairman Board of County Commissioners: The BOCC acknowledges the finding, and I will continue efforts to establish and document county-wide internal controls for federal grant programs, including LATCF. County Clerk: The County Clerk will work with the Board of County Commissioners to adopt policies and procedures for federal awards. County Treasurer: The County Treasurer acknowledges the finding. The Treasurer's Office will continue supporting county-wide efforts to develop and implement internal controls related to federal grant administration and compliance. Financial records maintained by the Treasurer's Office will continue to be available to assist county officials in meeting grant requirements. Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Controls – OV1.01 states in part: Definition of Internal Controls 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.