Finding Text
GENERAL INFORMATION: Grant Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Year: 2024 Federal Agency: Department of Treasury CONDITION: We noted the Putnam County Commission did not have controls in place to detect and prevent paying amounts in excess of specific contracts. Specially, a contract was executed with a vendor delineating specific prices for goods in agreement with a federal contract established between the vendor and the General Services Administration (GSA). County officials do not have a process in place to identify charges in excess of the specified prices and to ensure payments of federal funds match the agreed upon terms within the signed contract. Proper documentation was not on hand to support charges being in agreement with the contracted amounts. CRITERIA Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.404 states, in part, that: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: ...(d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." Proper internal control dictates the adequate review and oversight of charges related to contracted amounts. Additionally, controls should be in place to review these procedures and reduce opportunities for the override of controls. QUESTIONED COSTS: Unknown CAUSE: Procedures were not in place to verify that disbursements aligned with contractually stipulated amounts. EFFECT: We were unable to determine if the payments remitted to the vendor for charges during the year matched the specific prices on the signed contract. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-004 RECOMMENDATION: Officials should establish and follow procedures mandating a review and recalculation of all invoice payments. This review process should ensure that prices align with amounts agreed to in the executed contract. In instances where discrepancies are identified, officials should engage with the vendor and relevant state and federal agencies associated with the contract to determine that payments are made only for costs charged in accordance with the associated contract. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Commission will work directly with the vendor to ensure future payment requests properly align with payment information listed on the federal contract.