Finding Text
Assistance Listings number and name: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Award number and year: SLFRP1826, May 1, 2021 through December 31, 2026
Federal agency: U.S. Department of the Treasury
Compliance requirements: Reporting
Questioned costs: N/A
Condition—Contrary to federal guidance, the County’s Finance Department (Department) reported inaccurate program information to the federal grantor agency in its 2023 annual project and expenditure report submitted in April 2023. Specifically, the Department reported that it incurred cumulative expenditures totaling the entirety of its $9,031,691 award amount, when it had only spent $3,170,013, resulting in an overstatement of $5,861,678 of the cumulative expenditures reported.
Effect—The Department’s reporting inaccurate program information impacts the federal agency's ability to effectively monitor the Department’s program administration and compliance with program requirements, prevent and detect fraud, and evaluate the program’s success. The County is also at risk that this finding applies to other federal programs that it administers.
Cause—The County did not have written policies and procedures requiring the Department to perform and document an independent, detailed review and approval of the program’s report before submitting it to the federal agency. Additionally, although the former County Manager initialed the report as approved, the review was not sufficient enough to detect the nearly $6 million in overstated expenditure reporting errors we identified.
Criteria—Federal agency guidance requires the County to verify and confirm that all program information that it reports is accurate and approved before submission, in addition to reporting the total dollar value of cumulative expenditures for the project.1 Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303).
Recommendations—The County should:
1. Develop and implement written policies and procedures requiring all County departments to perform and document an independent, detailed review and approval of all federal reports before submitting them to the federal agency or grantor to ensure the reports are accurate, agree to County records, and contain only allowable expenditures.
2. After developing and implementing the policies and procedures in recommendation 1, train department employees who are responsible for preparing and reviewing federal reports on the information required to be gathered and documented.
3. Adjust or resubmit reports the Department submitted to the federal agency when errors are detected, and inform the federal agency of those errors on previously submitted reports.
The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
1 U.S. Department of Education. (2023). Compliance and Reporting Guidance – State and Local Fiscal Recovery Funds. Retrieved 3/19/2024 from SLFRF-Compliance-and-Reporting-Guidance.pdf (treasury.gov).