Finding Text
Finding 2021-012 – Noncompliance Over Major Federal Program – Coronavirus Relief Fund – Activities Allowed or Unallowed and Allowable Costs/Cost Principles
PASS-THROUGH GRANTOR: Oklahoma Office of Management and Enterprise Services
FEDERAL AGENCY: U.S. Department of Treasury
ASSISTANCE LISGING: 21.019
FEDERAL PROGRAM NAME: Coronavirus Relief Fund
FEDERAL AWARD NUMBER: SA-0187
FEDERAL AWARD YEAR: 2021
CONTROL CATEGORY: Activities Allowed or Unallowed and Allowable Costs/Cost Principles
QUESTIONED COSTS: $1,089,096
Condition: During the test of 100% of federal expenditures for Coronavirus Relief Fund, program disbursement totaling $1,089,096 were not expended in accordance with the Activities Allowed or Unallowed and Allowable Costs/Cost Principles due to unsubstantiated, duplicated, and ineligible costs as detailed below:
Payroll Reimbursements
• Unallowable reimbursement in the amount of $1,900 for longevity bonus.
• Sick leave totaling $2,285 for a county official.
• Duplicate payroll reimbursements totaling $17,668 were reimbursed by another grant.
Expenditure Reimbursements
• Reimbursements totaling $1,059,350 for hazard runs on behalf of Muskogee EMS District.
• Reimbursements totaling $7,879 were not supported with adequate documentation.
• Reimbursement in the amount of $14 that exceeded the purchase order amount.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance with federal award requirements.
Effect of Condition: This condition resulted in noncompliance with federal grant requirements for this program and could result in loss of federal funds.
Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and design and implement policies and procedures to ensure compliance with these requirements.
Management Response:
Chairman of the Board of County Commissioners: Muskogee County has hired an internal grant administrator to assist in keeping the county compliant with all local, state, and federal requirements. Efforts will be made going forward to ensure that all grant funds are properly expended within the allowable period of performance. It should be noted that Oklahoma Office of Management Enterprise Services did not review any of the submitted information to determine eligibility prior to sending reimbursements for items that have now been determined questionable.
County Clerk: Documentation was scanned into the Purchase Order’s images and once the Purchase Order was paid, the images were then deleted by the Board of County Commissioners secretary. Images were later recovered by the software system and since the incident, restrictions have been implemented to no longer allow deletions.
Criteria: 2 CFR § 200.303(a) - Internal Controls reads as follows:
The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, 2 CFR § 200.403 - Factors affecting allowability costs states in part, Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
(g) Be adequately documented.
The Department of the Treasury Federal Register, Vol. 86, No. 10 states, “Fund payments may not be used for expenses that have been or will be reimbursed by another federal program.”
Additional guidance provided in the Subrecipient Agreement - Federal Funding Certification executed 6/3/20 between Muskogee County and the State of Oklahoma states in part, “4.Funds provided as direct payment from the State of Oklahoma pursuant to this certification for necessary expenditures that were or will be incurred during the period that begins on March 1, 2020, and ending on December 30, 2020, that are not expended on those necessary expenditures on or before March 31, 2021, by the political subdivision or its grantee(s), must be returned to the State of Oklahoma on or before April 1, 2021.”,
5. Funds provided as a direct payment from the State of Oklahoma pursuant to this certification must adhere to official federal guidance issued or to be issued on what constitutes a necessary expenditure. Any funds expended by a political subdivision or its grantee(s) in any manner that does not adhere to official federal guidance or in violation of this certification shall be returned to the State of Oklahoma Coronavirus Relief Fund.
6. Any local government entity receiving funds pursuant to this certification shall retain documentation of all uses of the funds…
8. Any funds provided pursuant to this certification cannot be used as a revenue replacement for lower than expected tax or other revenue collections.
10. I acknowledge and certify that Recipient has not received, and will not apply for, federal funds from any other source, to reimburse it for the expenditures for which funds are sought pursuant hereto.”