Finding 570097 (2021-002)

Internal Controls Over Reporting Federal Program Information Federal Agency: U.S. Department of Treasury Award Name(s): COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number(s): 21.027 Award Year: 2021 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement Grantees are required to file project and expenditure reports – report on financial data, projects funded, expenditures, and contracts and subawards over $50,000, and other information. Project and expenditure reports are due on a regular, recurring basis after the interim reports. The reporting frequency and deadlines vary by type of recipient and total allocation amount. Management is also responsible for establishing and maintaining effective internal controls over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There is no documented review of the interim report and project and expenditure reports by an individual that is not involved with preparing the reports. One individual is both preparing and reviewing the reports with no additional documented oversight. Additionally, key line items, specifically current period expenditures and total cumulative expenditures, included on the project and expenditure report submitted for quarters 2-4 of 2021 (March – December) did not agree to the general ledger, as required by the terms of the grant agreement. Cause Weakness in the design and implementation of internal controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, key line items on reports submitted may not be complete or accurate. No questioned costs are reported as they are not quantifiable. Recommendation The County should address the weakness in internal controls noted above by requiring two individuals to be involved in preparing and reviewing reports submitted to federal agencies to ensure the reports are complete and accurate. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.