Finding 46000 (2022-005)

2022 ? 005 Reporting Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 1505-0271 - 2021 Award Period: May 26, 2021 - December 31, 2026 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the nonfederal entity's financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Further, the financial management system of each nonfederal entity must provide accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing, it was noted that the County did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following matters related to reporting. ? For the interim report, no evidence of review and approval of the report. ? For the Project and Expenditure Report 1, total obligations reported of approximately $907,400. However, the documentation used to prepare the report has an obligated amount of approximately $3,600,000. Thus, a variance of approximately $2,700,000. ? For the Project and Expenditure Report 2, total obligations reported of approximately $3,500,000. However, the documentation used to prepare the report has an obligated amount of approximately $2,800,000. Thus, a variance of approximately $711.900. ? For the Project and Expenditure Report 1 and 2, Subaward No: SBC_01 Period of Performance Start of August 13, 2021. However, the professional services contract has a contract start date of July 13, 2021. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the County design controls to ensure review and approval of reports are maintained in the County's grant files. Also, we recommend the County design controls to ensure reports agree to the documentation used to prepare them. Views of responsible officials: There is no disagreement from responsible officials.