Finding 555235 (2024-002)

2024-002 U.S. Department of Treasury, Federal Financial Assistance Listing #21.027, COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Matching, Level of Effort and Earmarking; Reporting Significant Deficiency in Internal Control over Compliance Criteria: Recipients of CSLFRF can calculate lost revenue for the years 2020, 2021, 2022, and 2023 based on the formula provided in the 2022 Final Rule to determine the amount of CSLFRF funds that can be used for the “provision of government services”. In calculating revenue loss, recipients can choose whether to use calendar or fiscal year dates but must be consistent throughout the period of performance. If calculating revenue loss, recipients must provide auditors with evidence supporting their revenue loss calculation. Non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). Condition: During the testing over Earmarking, it was noted the County was not able to completely support the amounts used in the calculation. Further, there was no evidence of review of the calculation. Cause: The County’s controls were not sufficient to ensure someone other than the preparer of the revenue loss calculation reviewed the calculation prior to its submission on the County’s quarterly reports. Effect: The revenue loss number calculated by the County was incorrect. This incorrect number was reported to the Treasury as part of the County’s quarterly reporting requirement. Questioned Costs: None reported. Context/Sampling: Sampling was not used for the Earmarking compliance test as there was only 1 revenue loss calculation. A statistical sample of 2 reports were selected for testing out of a total population of 4. Repeat Finding from Prior Year(s): No Recommendation: Management should review the revenue loss calculation to ensure it is appropriately supported by underlying documentation. For all future reports submitted to the Treasury, the recalculated revenue loss amount should be used. Views of Responsible Officials: The County agrees with the auditor’s findings