Finding Text
Finding 2023-006 – Lack of County-Wide Internal Controls Over Major Federal Program – Coronavirus
State and Local Fiscal Recovery Funds (Repeat Finding – 2022-006)
PASS-THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of
Performance; Procurement and Suspension and Debarment; Reporting; Subrecipient Monitoring QUESTIONED COSTS: $0
Condition: Through the process of gaining an understanding of the County’s internal control
structure, it was noted that county-wide internal controls regarding Control Environment, Risk
Assessment, Information and Communication, and Monitoring have not been designed.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure the
County complies with grant requirements.
Effect of Condition: Without an adequate system of county-wide controls, there is greater risk of
a breakdown in control activities which could result in unrecorded transactions, undetected errors,
or misappropriation of funds. Further, this condition could result in noncompliance with grant
requirements and a loss of federal funds.
Recommendation: OSAI recommends that the County design and implement a system of internal control
procedures to ensure compliance with grant requirements. This documentation should outline the
importance of internal controls, the risk that the County has identified, the control activities
established to address the risk, the steps taken to properly communicate pertinent information in a
timely manner and the methodology to monitor the quality of performance over time. These procedures
should be written policies and procedures and could be included in the County’s policies and
procedures handbook.
Management Response:
Chairman of the Board of County Commissioners: The Board of County Commissioners will work toward
assessing and identifying risks to design written county-wide controls.
Criteria: The GAO Standards – Section 1 – Fundamental Concepts of Internal Control – OV1.01 states in part:
Definition of Internal Control
Internal control is a process effected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be achieved.
Additionally, GAO Standards – Section 2 – Establishing an Effective Internal Control System –
OV2.04 states in part:
Components, Principles, and Attributes
Control Environment - The foundation for an internal control system. It provides the discipline and
structure to help an entity achieve its objectives.
Risk Assessment - Assesses the risks facing the entity as it seeks to achieve its objectives. This
assessment provides the basis for developing appropriate risk responses.
Information and Communication - The quality information management and personnel
communicate and use to support the internal control system. Monitoring - Activities management establishes and operates to assess the quality of
performance over time and promptly resolve the findings of audits and other reviews.