Finding 498746 (2023-002)

Corrective Action Plan September 25, 2024 Federal Audit Clearinghouse County of Orleans respectfully submits the following corrective action plan for the year ended December 31, 2023. Name and address of independent public accounting firm: EFPR Group, CPAs, PLLC 100 South Clinton Avenue, Suite 1500 Rochester, NY 14604 Audit period: January 1, 2023 – December 31, 2023 The findings from the December 31, 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDING – FINANCIAL STATEMENT AUDIT FINDING 2023-001 - Material Weakness in Internal Control Over Financial Reporting - Material Adjustments Condition: The County is responsible for maintaining a proper system of controls to allow for all year end adjustments to be made prior to the preparation of the Annual Financial Report (AFR) and the start of the audit. Criteria: A proper system of controls would result in the County making all required year end closing adjustments prior to the preparation of the AFR and the start of the audit. Cause: Auditors were required to make material adjustments as part of the year end audit process. Effect of Condition: The County does not have the controls in place to make all required year end closing entries which resulted in material adjustments as part of the audit process. Recommendation: The County should re-evaluate the year end close process to ensure all required year end closing adjustments are completed timely. A training should be held with all employees involved with year end closing to review the process. Views of Responsible Officials and Planned Corrective Actions: The County Treasurer has created a written Year End Adjustment checklist for the County Treasurer and Deputy County Treasurer to both check and sign before the Annual Financial Report (AFR) is filed with the State Comptroller to ensure all normal year end adjustments are accounted for, justified and confirmed. FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2023-002 - CCDF Cluster - Child Care Development Block Grant - Assistance Listing No. 93.575; Grant Period - For the year ended December 31, 2023 Condition: Currently the senior social welfare examiner who handles the child care development block grant program processes the application and determines eligibility. There is no requirement for the documentation of review and approval by a secondary individual over this process. Criteria: Implementing internal controls that provide for segregation of duties over the child care development block grant would involve a secondary reviewer resulting in more than one individual being responsible for the entire process. Documenting this secondary approval process would provide for confirmation that the segregation of duties has occurred. Cause: The County does not have procedures in place to require a secondary review on the application process and eligibility determination. Effect of Condition: The County's internal control system for the child care development block grant was not designed to provide segregation of duties and the related documentation. Questioned Costs: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The County should consider revisiting the segregation of duties over application and eligibility process to provide for a documented review and approval over the process. Views of Responsible Officials and Planned Corrective Actions: Effective immediately, 100% of new, denied and closed Child Care applications and 10% of recertification applications will be reviewed by a supervisor to verify that: o All required documentation is present in the case file. o All information was correctly entered into the electronic Child Care Time and Attendance system which determines eligibility. o A correct eligibility determination was produced. Contact Person Responsible for Corrective Action: Kimberly DeFrank, Orleans County Treasurer – finding 2023-001 and Holli Nenni, DSS Commissioner – finding 2023-002. Anticipated Completion Date: The corrective action plan was completed by September 27, 2024. If the Federal Audit Clearinghouse has questions regarding this plan, please call Kimberly DeFrank at 585-589-5353. Sincerely yours, Kimberly DeFrank