Finding Text
2021‐006 (2019‐006) — SF‐425 Reports (Significant Deficiency) (Repeat/Modified)
Federal program information:
Funding agency: U.S. Department Homeland Security
Title: Operation Stonegarden
Federal Assistance number: 97.067
Compliance Requirement Reporting
Award Period: July 1, 2020 to June 30, 2021
Condition: During our testwork of the Stonegarden program we noted the following:
For the 2019 and 2018 grants, there were two quarterly reports out of six that were not submitted
by the due date required.
The quarterly report’s expenditures did not match the expenditures of the general ledger in total for
a variance of $13,619.
The program’s revenues were $12,540 more than the expenditures on the trial balance.
The County made progress in filing SF-425’s during fiscal year 2021. However, will implement additional
internal controls to ensure reports are complete and accurate.
Criteria: The SF-425 quarterly reports should be submitted within the required time period after the end of
the reporting period, which is 30 days, and should agree to the general ledger. Grant accounting requires the
program revenues to equal the program’s expenditures.
Questioned Costs: None.
Effect: SF-425 reports for the Stonegarden program were not submitted by the required due dates and some
of the amounts reported were not correctly matching the general ledger amounts.
Cause: The County had turnover in the management of this program and the position wasn’t filled until the
middle of the previous fiscal year and the program manager had to go through the documents to know what
amounts needed to be reported and as the County was far behind on their reporting it took multiple months
for the County to catch up which resulted in the two late reports in the current fiscal year; one for grant 2019
and one for grant 2018. For the amounts reported not matching the general ledger and revenue not equaling
expenditures, the reason for this is both a timing issue and there not being a proper reconciliation process in
place when report amounts are submitted to the granting agency and when recording amounts in the general
ledger.
Auditor’s Recommendations: We recommend that there be a reconciliation with the Stonegarden program and
with Finance to ensure that the amounts reported in the quarterly reports match the amounts reported on
the general ledger and that the County cross-train someone to ensure that if there is turnover again for the
program, there is someone who can submit the reports until someone else has been hired to fill the position.
Agency’s Response: Luna County continues to improve grant management of these funds and in getting billing
and reporting done on a consistent and timely basis. Reporting is currently being prepared and submitted on
a quarterly basis for each grant cycle we have open. Reporting is also being prepared throughout the grant
cycle to include modifications of Ops Orders, RFA’s and grant progress and closing reports. We are also
reviewing a cross-training implementation to ensure that should we have turnover within that department
there will be someone able to pick up the grant to continue to monitor and work it without delays. The
finance department will be responsible for this issue and internal controls will be implemented in fiscal year
2022.
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