Finding Text
Finding 2022-013 - Noncompliance Over Reporting – Coronavirus State and Local Fiscal Recovery Funds
PASS THROUGH GRANTOR: Direct Grant
FEDERAL AGENCY: United States Department of the Treasury
ASSISTANCE LISTING: 21.027
FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (SLFRF)
FEDERAL AWARD NUMBER: SLFRP3720
FEDERAL AWARD YEAR: 2022
CONTROL CATEGORY: Reporting
QUESTIONED COSTS: $0
Condition: During the process of documenting the County’s internal controls regarding federal reporting process, we noted that the County has not established procedures to ensure compliance with reporting requirement. Furthermore, while performing a test over the reporting requirement, we noted the following:
• Interim report was not submitted.
• Variances between expenditures reported on the quarterly reports and the County’s expenditure data:
o Quarterly reports during the period of March through December 2021 expenditure amounts were more than County’s the expenditure data by $124,984.
o Quarterly report Q1 2022 expenditure amount was more than the County’s expenditure data by $1,140,410.
o Quarterly report Q2 2022 expenditure amount was less than the County’s expenditure data by $39,146.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance of reporting compliance requirements.
Effect of Condition: This condition resulted in noncompliance with grant requirements.
Recommendation: OSAI recommends the County comply with federal laws and regulations and grant agreements by submitting required reports to the U.S. Department of the Treasury timely. In addition, OSAI recommends the County design and implement a system of internal controls to ensure the accuracy and completeness of information submitted.
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 and properly reported.
Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part:
Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements.
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).
Compliance and Reporting Guide – State and Local Fiscal Recovery Funds – Version 5.2 also states in part:
States, U.S. territories, metropolitan cities, counties, and Tribal governments were required to submit a one-time interim report with expenditures7 by Expenditure Category covering the period from March 3rd to July 31, 2021, by August 31, 2021 or sixty (60) days after first receiving funding if the recipient’s date of award was between July 15, 2021 and October 15, 2021.