Finding 477914 (2023-001)

2023-001 - Revenue Loss Calculation (Earmarking) 2023-001 - Revenue Loss Calculation (Earmarking) Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Treasury COVID-19 - State and Local Fiscal Recovery Fund (CSLFRF) - American Rescue Plan Act (ALN 21.027); Direct award Criteria. In accordance with the Uniform Guidance, recipients of Coronavirus State & Local Fiscal Recovery Funds may use payments from CSLFRF to replace lost public sector revenue to provide government services. Recipients may use this funding to provide government services to the extent of the reduction in revenue experience due to the pandemic. Under the Final Rule, recipients can elect a one-time “standard allowance” or they can calculate lost revenue based on the formula provide in the Final Rule to determine the amount of funds that can be used for the provision of government services. Condition. The County calculated lost revenue for fiscal years 2020-2023; however, certain items included in the calculation are not allowed per the Final Rule. Cause. The County included accounts and account classifications that should have been excluded from the calculation. Effect. As a result, the amount of revenue loss reported on the SLFRF compliance/P&E reports was incorrect. Recommendation. Management has revised its internal revenue loss calculation. We recommend the County update the amount on the current quarterly report and ensure that any future calculations are correct. Questioned Costs. None. View of Responsible Official. The County agrees that management has already taken appropriate action and will continue to provide correct calculations of revenue loss for future quarterly reports. The amount of the County’s revenue loss far exceeds the amount of ARPA funds spent within that category, and so this item did not and will not impact the accuracy of the County’s ARPA expenditure reports. Responsible Official. Finance Director