Finding Text
Finding 2021-008 – Lack of Internal Controls Over Major Federal Programs – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
PASS-THROUGH GRANTOR: Oklahoma Department of Emergency Management
FEDERAL AGENCY: U.S. Department of Homeland Security
ASSISTANCE LISTING: 97.036
FEDERAL PROGRAM NAME: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
FEDERAL AWARD NUMBER: DR-4438
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance; Reporting; Special Tests and Provisions
QUESTIONED COSTS: $-0-
Condition: During the process of documenting the County’s internal controls regarding federal disbursements, we noted that Grant County has not established procedures to ensure compliance with the following requirements: Activities Allowed or Unallowed; Allowable Costs/Costs Principles; Period of Performance; Reporting: Special Tests and Provisions.
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 resulted in noncompliance to federal compliance requirements and could lead to a loss of federal funds to the County.
Recommendation: OSAI recommends the County gain an understanding of requirements for this program and design and implement internal control procedures to ensure compliance with federal grant requirements.
Management Response:
County Commissioner District 2: I will accept the recommendations and will acquire information to research federal grant compliance requirements to ensure adherence to the requirements.
County Commissioner District 3: We need to educate ourselves as County Officials to better understand our duties over compliance requirements and research federal grant compliance requirements to ensure adherence to the requirements.
County Clerk: We have hired a new Emergency Manager who has attended FEMA classes. We will invite her to share her information in a County Officers’ meeting.
Criteria: 2 CFR § 200.303(a) Internal Controls 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 the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Further, GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part:
Objectives of an Entity – Compliance Objectives
Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.