Finding 547118 (2024-003)

U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027, Passed through the City of Las Vegas and Clark Country – Internal Control Systems Over Compliance, Allowable Costs Criteria: As defined in 2 CFR 200.303, the auditee is required to establish, document, and maintain a system of internal control over compliance designed to provide reasonable assurance that federal award transactions are executed in compliance with the terms and conditions of the federal award, federal statutes, and regulations. Condition: On the March 2024 request for reimbursement, the number of hours submitted for reimbursement for one employee was inconsistent with the supporting documentation included in the reporting package. The number of hours submitted for reimbursement exceed the supporting documentation by sixteen hours. Cause: Internal controls over compliance as related to the compliance requirement of allowable costs were not designed and/or operating effectively. Effect: The number of hours submitted for reimbursement exceed the supporting documentation by sixteen hours. Although the known or projected amount of this excess did not rise to the level of a questioned costs compliance finding, there is a risk that in the absence of a well-designed and consistently implemented system of internal controls that unallowable costs will be submitted for reimbursement. Recommendations: We recommend management design and implement a system of internal controls whereby expenditures submitted for federal reimbursement are in accordance with allowable cost principles. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding regarding the discrepancy in reported hours for one employee on the March 2024 reimbursement request. The 16-hour variance was an unintentional clerical error during the preparation of the reimbursement package. The discrepancy was not material, but we agree that stronger controls are necessary to prevent such occurrences. Planned Corrective Actions: • To address this finding, management will: • Establish a formal review and approval process for all reimbursement packages, including verification of hours against supporting documentation (e.g., timesheets or payroll records). • Design and implement a checklist to be used during the preparation of reimbursement requests to ensure compliance with allowable cost principles. • Conduct periodic internal audits of submitted RFRs to confirm alignment with backup documentation. • Provide training to all relevant personnel on federal allowable cost requirements under 2 CFR 200. All corrective actions will be implemented by June 30, 2025, with ongoing monitoring thereafter.