Finding Text
Finding 2022-013 – Lack of Internal Controls and Noncompliance with Reporting Requirements
Over Federal Grant Coronavirus State and Local Fiscal Recovery Funds
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Reporting
QUESTIONED COSTS: $-0-
Condition: The County has not established internal controls to ensure the correct expenditure category is
used for reporting payments to the grant administrative contractor. The quarterly reports improperly
classified payments totaling $147,883 to a contractor as a Revenue Replacement expense instead of using
the Administrative expense category.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal
expenditures are made in accordance with federal compliance requirements.
Effect of Condition: This condition could result in noncompliance to grant requirements.
Recommendation: OSAI recommends the County gain an understanding of the requirements for this
program and implement internal controls to ensure compliance with these requirements.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will take
measures to ensure future compliance with all requirements of federal grants.
Criteria: Accountability and stewardship should be overall goals in management’s accounting of federal
funds. Internal controls should be designed to monitor compliance with laws and regulations pertaining to
grant contracts.
Title 2 CFR § 200.303 Internal Controls (a) reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of theUnited States or the “Internal Control Integrated Framework”, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds (10. Reporting.) reads as
follows:
All recipients of federal funds must complete financial, performance, and compliance
reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported
on a cash or accrual basis, as long as the methodology is disclosed and consistently applied.
Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1.
Your organization should appropriately maintain accounting records for compiling and
reporting accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, you organization needs to establish controls to ensure
completion and timely submission of all mandatory performance and/or compliance
reporting.
Further, 2 CFR § 200.329 Monitoring and Reporting Program Performance (c)(1) reads as follows:
The non-Federal entity must submit performance reports at the interval required by the
Federal awarding agency or pass-through entity to best inform improvements in program
outcomes and productivity. Intervals must be no less frequent than annually nor more
frequent than quarterly except in unusual circumstances, for example where more frequent
reporting is necessary for the effective monitoring of the Federal award or could
significantly affect program outcomes. Reports submitted annually by the non-Federal
entity and/or pass-through entity must be due no later than 90 calendar days after the
reporting period. Reports submitted quarterly or semiannually must be due no later than 30
calendar days after the reporting period. Alternatively, the Federal awarding agency or
pass-through entity may require annual reports before the anniversary dates of multiple
year Federal awards. The final performance report submitted by the non-Federal entity
and/or pass-through entity must be due no later than 120 calendar days after the period of
performance end date. A subrecipient must submit to the pass-through entity, no later than
90 calendar days after the period of performance end date, all final performance reports as
required by the terms and conditions of the Federal award. See also § 200.344. If a justified
request is submitted by a non-Federal entity, the Federal agency may extend the due date
for any performance report.